It’s been a long time coming, but it looks like energy storage is finally ready for the big time. After years of waiting for price declines, technology breakthroughs, and policy and regulatory actions, Southern California Edison (SCE) set a precedent for California and the U.S. last month by awarding local capacity procurement contracts for 2.221 gigawatts of energy resources across greater Los Angeles. This marks the first time in U.S. history that a utility will make strategic use of advanced energy storage systems (on both sides of the meter) to meet local long-term electricity needs.
As Renewable Energy World describes:
SCE’s contract awards marked at least a few industry firsts. It was the first time a U.S. electric utility evaluated a diverse range of conventional and preferred “green” energy resources — natural gas-fired power plants, solar PV, advanced energy storage, energy efficiency and demand response — in “head-to-head competition.” It was also the first time a U.S. utility solicited proposals from advanced energy storage solution providers to meet projected long-term electric power needs.
SCE awarded more than five-times the 50-megawatts (MW) of energy storage capacity it was required to by state power authorities, California Energy Storage Association (CESA) co-founder and Executive Director Janice Lin pointed out. Contracts to deploy 260.6 MW of advanced energy storage capacity were awarded to AES (100 MW), Stem (85 MW), Advanced Microgrid Solutions (50 MW) and Ice Energy Holdings (25.6 MW).
I’m particularly intrigued by the range of energy storage technologies that SCE plans to deploy. Advanced Microgrid Solutions is a fast-growing company, headed by industry veterans, that aggregates distributed energy storage resources among various large customers to create combined storage and demand response resources for grid operators to use to balance the grid. Ice Energy, meanwhile, freezes water at night when rates are low to deploy and offset expensive daytime rates during the heat of the day.
Overall, it’s a nice range of technologies represented, and symbolizes exactly the kind of innovation, diversity of approaches, and economics that California hoped would happen when the legislature passed the landmark energy storage law AB 2514 (Skinner) in 2010. We’ll need much more of these resources if we have any hope of decarbonizing our electricity system and achieving long-term greenhouse gas reduction goals. But this is a great start and hopefully the beginning of much more to come.
