Could energy storage be the next tax break?
On June 2, 2016 – “U.S. Rep. Mike Honda (D-Silicon Valley, Calif.) introduced H.R. 5350, the bipartisan Energy Storage for Grid Resilience and Modernization Act. Honda was joined by Reps. Chris Gibson (R-NY), Tom Reed (R-NY) and Mark Takano (D-CA).” The purpose of the legislation is to clarify that energy storage industry receives a 30% tax credit equivalent in nature to what the Renewable Energy industry gets. The 30% Solar Power Tax Credit, is credited with being one of the major drivers for the solar power installation boom in the United States.
H.R. 5350: Energy Storage Act of 2016 has been assigned to the House Ways and Means Committee for consideration. GovTrack.us gives it a 4% chance of being enacted. The full text of the bill can be reviewed here. Other energy bills are being considered by Congress right now – including, S. 2012: Energy Policy Modernization Act of 2016, the first significant national energy bill since the 1990s.
Pricing for batteries is falling quickly. Microgrids – dependent on local energy storage – are being installed by standard solar power players like SolarCity, but also equipment groups like CAT. Tony Seba thinks that the Tesla Gigafactory, all on its own, will lower the price of lithium ion batteries by 30-50%.
Just 4 days ago, The White House put out a list of organizations sponsoring programs, pilots, and projects in eight states:
- California Independent System Operator (CAISO) recently released draft study results demonstrating that a regional market would promote more renewable energy at a lower cost in the Western United States. CAISO commits to exploring the possibility of expanding its balancing authority across a larger geographic footprint to more efficiently optimize the grid and integrate renewable energy resources. CAISO also commits to developing business rules and procedures to coordinate operation of the transmission system with distribution systems operators that are experiencing a proliferation of distributed energy resources.
- California Public Utilities Commission commits to developing a regulatory framework that enables a flexible, efficient, clean and reliable power grid. To accomplish this goal, California will continue to allow customers to effectively and efficiently choose from an array of distributed energy resources and promote the collection, analysis, and, where consistent with customer privacy protections, dissemination of smart meter and grid condition data.
- The Commonwealth of Massachusetts announces, as part of its Energy Storage Initiative, an initial $10 million investment for demonstration projects and a comprehensive study in order to identify the potential benefits of incorporating advanced storage technologies into the state’s energy portfolio. Conducted by the Massachusetts Department of Energy Resources (DOER) and Massachusetts Clean Energy Center (MassCEC), the study seeks to analyze the national and Massachusetts storage industry landscape, review economic development and market opportunities for energy storage, and examine potential policies and programs that could be implemented to better support energy storage deployment. Following the release of this study in mid-2016, DOER and MassCEC will work with stakeholders to begin testing and implementing both the regulatory and the policy recommendations detailed therein, including grant opportunities to begin demonstration projects to further test the viability of energy storage technology and innovations in the Massachusetts energy market.
- Community Storage Initiative (CSI) announces that it has been joined by over 40 organizations, including utilities, manufacturers, and technology suppliers. CSI was launched in February 2016 by the American Public Power Association, Edison Electric Institute, National Rural Electric Cooperative Association, Peak Load Management Alliance and the Natural Resources Defense Council. The CSI also announces the Inaugural CSI Leadership Forum on July 20 and 21, 2016 at the University of Minnesota in Minneapolis. Over 100 leading practitioners will meet to exchange their experiences in and ideas for coordinating distributed energy storage resources that are located throughout a community.
- Con Edison announces a new partnership with Siemens to use data from Con Edison’s Advanced Metering Infrastructure rollout, which will cover 4.8 million customers, to enable consumers to benefit from cost-effective renewable energy integration. The new system will make available detailed data for use by consumers and renewable energy providers for planning and economic analysis purposes, as well as time-varying price signals for when renewable energy production is most valuable to the grid. The initiative includes implementing Green Button Connect to allow customers to share data with third parties.
- Duke Energy commits to deploy at least five megawatts of energy storage in the Asheville region of North Carolina. Energy storage, coupled with more efficient natural gas generation, solar power, and innovative customer solutions, will enable Duke Energy to maintain a high degree of energy reliability while also reducing its carbon footprint by closing all of its coal-fired power plants in the Asheville community.
- Green Button Alliance announces its commitment to explore a pilot program to provide aggregated and anonymous energy usage information for research and the public benefit. The potential energy usage data pilot would entail a database of anonymous energy-use information from participating utilities that would be collected from smart meter deployments. By customer consent, the data would be made available in the standardized Green Button format to universities and research entities to study energy use patterns which could then be used for grid reliability and forecasting, infrastructure planning, or integration of distributed energy resources. Participants considering the viability of a potential pilot include Green Button Alliance founding utilities: Pacific Gas & Electric, Southern California Edison, San Diego Gas & Electric, and London Hydro.
- Green Mountain Power (GMP), building on its eHomes program, announces its partnership with Vermont’s Energy Efficiency Utility, Efficiency Vermont, and the Vermont Energy Investment Corporation to pilot a community-scale comprehensive energy transformation in Panton, Vermont in June 2016. The year-long project is expected to decrease energy usage, energy costs and carbon pollution. It will include town buildings, local businesses, 80% of the homes in Panton, and utility-scale solar paired with battery storage to microgrid parts of the town.
- Indianapolis Power & Light Company (IPL), an AES Company, announces the commercial operation of a 20 MW energy storage array. This is the first grid-scale battery energy storage system in the 15-state Midcontinent Independent System Operator (MISO) region. It is also the first grid-scale energy storage system in the United States that will be used to provide primary frequency response, an essential reliability service. IPL’s energy storage will enhance system reliability and help reduce costs and emissions across the electric system.
- Los Angeles Department of Water and Power (LADWP) plans to procure 24 MW of energy storage by 2016 and commits to a target of 178 MW by 2021. LADWP also plans to procure 60 MW of demand response by 2016 and commits to target the procurement of 200 to 500 MW by 2026. LADWP will dedicate up to $2.9 million in funding for its Interval Data for Energy Efficiency effort in order to identify approximately 40 GWh in actionable savings at commercial and industrial customer sites. LADWP will also deploy its Sustainability Analytics Tool to premier accounts and major customers over the next year.
- NextEra Energy’s Florida Power & Light (FPL) announces a pilot project to test storage technology applications under real-life conditions. FPL will install different types of battery systems in Miami-Dade and Monroe counties to research energy storage benefits, including: improved reliability for isolated areas and microgrid foundations via a battery back-up system to be built at the southern tip of Everglades National Park; reuse of electric vehicle batteries and “peak shaving” via small-scale installations in residential areas in Miami and repurposing “second-life” batteries from more than 200 electric vehicles; and mobile storage capacity to prevent power interruptions at major economically important events via a portable system to be tested during the 2017 Miami Open at Crandon Park Tennis Center on Key Biscayne. These applications will also help with renewable integration as FPL continues to expand its use of solar energy to serve its 4.8 million customers.
- Pacific Gas & Electric (PG&E) plans to invest approximately $3 billion a year through 2020 to make the grid more resilient and facilitate its vision of a grid that will integrate distributed solar, energy storage, electric vehicles and other low-carbon technologies. To facilitate the integration of distributed energy resources (DERs), PG&E is proposing five pilot projects to demonstrate: Dynamic Integrated Capacity Analysis methodology for integrating all line sections or nodes within a specific distribution planning area (DPA); Optimal Location Benefit Analysis methodology for a DPA that has one near-term and one longer-term distribution infrastructure project that can be deferred due to DER integration; DER locational benefits; distribution operations at high penetrations of DERs; and DER dispatch to meet reliability needs.
- Portland General Electric (PGE) commits to implementing a new standard communication interface for smart water heaters that will enable customer-friendly and affordable large-scale residential demand response. PGE, Oregon’s largest electric utility company, is co-leading a market transformation effort with the Bonneville Power Administration that would replace the region’s 3.5 million water heaters with smart water heaters, creating a 10,000 MWh “battery” for less than $40/kWh, and will launch a mass-market water heater program pilot including these new technologies in 2017. PGE also commits to investing $366,000 in 2016 in energy storage research and development and early-stage technology deployment and to using smart meter data and distributed energy resources in its resource planning and investment decisions, including launching a second generation energy information system by the end of 2016. PGE is also announcing a pilot on time-variant prices for residential customers.
- San Diego Gas & Electric (SDG&E), as part of a pilot program, is planning to install 3,500 electric vehicle charging stations at businesses, in multi-family communities, and in underserved neighborhoods, all while maximizing the use of renewable energy to charge the cars. SDG&E recently signed a contract for a 20-MW energy storage facility, which would be the largest in the San Diego region, and expects to reach 165 MW of storage capacity by 2020.
- Southern California Edison (SCE) commits to procuring at least 580 MW of energy storage projects by 2020 (which must be operational by 2024) to support grid optimization, renewable energy integration, and greenhouse gas reduction. SCE is also committing to offset local load growth through an additional planned procurement in 2016 of a minimum of 100 MW of clean energy resources. SCE will launch requests for offers for energy storage projects in 2016, including projects that could help maintain grid reliability to mitigate risks of outages caused by the limited operation of the Aliso Canyon Natural Gas Facility.
- U.S. Green Building Council and its sister organization Green Business Certification Inc. (GBCI), in partnership with Urban Ingenuity, announce a public-private convening on July 11 to support the District of Columbia’s efforts to encourage microgrid development. GBCI and the National Association of State Energy Offices commit to co-sponsoring at least two regional webinars in 2016 to engage utility and state stakeholders on smart grid development using PEER – the first ever rating system for power system performance – to advance innovative, more flexible, and affordable grids.