ESA Comment on Quadrennial Energy Review (QER) Phase 2

Posted: July 5, 2016 - 13:24 / DOE / ESA Filings

Since its inception 26 years ago, the ESA has promoted the development and commercialization of competitive and reliable electric storage delivery systems for use by electricity suppliers and their customers. ESA’s membership comprises a diverse group of electric sector stakeholders, including utilities, independent power producers, manufacturers of advanced technologies -- such as batteries, flywheels, thermal electric storage, compressed air electric storage, supercapacitors, and other technologies -- component suppliers, and system integrators.

ESA’s over 180 member companies have expertise in transmission- and distribution-level grid operations relevant to electric storage, as well as firsthand knowledge of the regulatory challenges to financing and operating commercial electric storage facilities to realize full system benefits. We thank the Department of Energy (DOE) for the opportunity to provide recommendations for Federal action to guide the modernization of the nation’s electric grid and ensure its continued reliability, safety, security, affordability, and environmental performance.

Fundamentally, energy storage is the key enabling technology for grid transformation. In simplest terms, energy storage enables electricity that is generated to be used at a later time, when it is most needed. Using energy storage can save businesses and households money by reducing the amount of spare capacity, in the form of excess power plants and wires, that utilities need to build to meet system peak demands. Energy storage also makes the grid more reliable by evening out fluctuations in supply and demand and serving as back-up for outages and disruptions in supply. Finally, energy storage allows integration of a larger supply of clean energy by compensating for the variability of wind and solar power, as well as integration of a larger supply of distributed energy resources (DER).

A critical barrier to greater use of energy storage in the U.S. is that the electric system was not designed with energy storage as an option. Energy storage is unlike any other resource and does not fit existing electric system rules—sometimes it acts like supply, sometimes it acts like demand, sometimes it acts like infrastructure, and it can switch between these roles at will. That multi-service capability is what make storage so valuable. But when storage has to fit the existing system rules and processes, it cannot offer its multiple capabilities and is effectively undervalued. At the same time, utilities already know how to build wires and procure power plants, and they do not today have guidance to support doing things a different way. As a result, storage is not on the menu of investment options put forward by utilities or discussed by regulators.

This is problematic if the U.S. is going to attain a more modern, more distributed, and cleaner electric system, as well as keep it reliable and affordable. Incorporating storage into planning, procurement, and operations is a non-trivial set of public policy developments, and ESA encourages DOE to consider the following points in development of the QER and subsequent Federal actions.