AB2514 Opens Door for Energy Storage

The California Energy Storage Alliance (CESA) scored a big win with Governor Schwarzenegger’s approval of AB2514.  The members of CESA include: A123 Systems, Altair Nanotechnologies, Beacon Power, Chevron Energy Solutions, Debenham Energy, Deeya Energy, EnerSys, EnerVault, Fluidic Energy, Ice Energy, PowerGetics, Prudent Energy, PVT Solar, Suntech, SustainX, and XtremePower.

Solving the energy storage technology issue is the functional equivalent of the Holy Grail for opening possibilities that truly are transformative.  We should cheer on each of the companies involved in CESA for their pioneering work.

The real-time physical properties of electricity have made its use as difficult as it is essential.  Our limited ability to store electrical energy means we must build power generation and transmission and energy delivery infrastructure for peak demand even when that peak is only occasionally reached.  Solving the energy storage problem is a game changer not just for the electric power industry, but for transportation and many other energy uses.

These CESA members are all great companies with promising ideas for transforming the energy business using energy storage to time shift energy use potential—and they have also shown themselves to be good lobbyists too.  AB2514 got a friendly legislative reception by being introduced by Chair Nancy Skinner (D‐14), Assembly Rules Committee, with support from California AG Jerry Brown who is running for Governor on a platform that includes support for clean and renewable energy.

They claim:  “AB2514 will create thousands of new green‐collar jobs; create a smarter, cleaner electric grid; increase the use of renewable energy; provide significant savings by reducing the need for new power plants and transmission lines; and, reduce air pollution from greenhouse gases and smog‐forming nitrogen oxides (NOx).”

But California has no money to spend on energy storage R&D.  An earlier version of the bill set specific targets for utilities to meet, but the final version approved by the Governor only requires that the CPUC and publicly owned utilities (public power) set targets, if determined to be appropriate.  Here is the final language of the bill:

This bill would require the CPUC, by March 1, 2012, to open a proceeding

to determine appropriate targets, if any, for each load-serving entity to

procure viable and cost-effective energy storage systems and, by October

1, 2013, to adopt an energy storage system procurement target, if determined

to be appropriate, to be achieved by each load-serving entity by December

31, 2015, and a 2nd target to be achieved by December 31, 2020. The bill

would require the governing board of a local publicly owned electric utility,

by March 1, 2012, to open a proceeding to determine appropriate targets,

if any, for the utility to procure viable and cost-effective energy storage

systems and, by October 1, 2014, to adopt an energy storage system

procurement target, if determined to be appropriate, to be achieved by the

utility by December 31, 2016, and a 2nd target to be achieved by December

31, 2021.”

So what?

You see where this is going don’t you?  Energy storage is a great idea and we should encourage cleantech investors to put their R&D dollars where it makes sense.  But forcing yet another mandate on utilities would have only one impact on rates—UP!

The principle of integrated resource planning widely used by state public utility regulatory agencies meant that the utility must bring together the supply side and demand side options that provided the least cost, best fit solution for prudently meeting the energy requirements of its customers.  If energy storage is a least cost, best fit resource for the utility portfolio the utility should buy it, if not then the State should prudently not mandate it.

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2 thoughts on “AB2514 Opens Door for Energy Storage

  1. All the energy players agree that energy storage is a good thing. But, the utilities, commissions, grid operators, can’t figure how to fit it into the current models. We know how to pay for generators, transmission/distribution, etc., but not how to value energy storage as an alternative. This proceeding will allow all the key participants – the CPUC, the utilities, the grid operators, the consumers – to determine those applications where energy storage makes more sense than peaking generators or curtailments.

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