Testimony Presented To House Economic Matters Committee House Bill 773 An Act Concerning Clean Energy – Energy Storage Technology Study

Posted: February 28, 2017 - 13:34 / Maryland / ESA Filings

Presented By Jason Burwen
Policy & Advocacy Director, Energy Storage Association

Position: Support

Chairman Davis, Vice-Chair Jameson, and Members of the Committee, thank you for holding this hearing today. I am the Policy & Advocacy Director at the Energy Storage Association. Our nation-wide membership comprises nearly 200 electric utilities, developers, manufacturers, and other companies directly involved in advanced energy storage.  Several of our members conduct energy storage or related business activities in Maryland.
The Energy Storage Association supports House Bill 773 creating an Energy Storage Technology Study to determine how Maryland can use energy storage to open the path to a more reliable, more affordable, and cleaner electric system.
It is important for Maryland to study energy storage soon. Maryland is making decisions about electric grid investments today that will last for the next several decades—be that investments in wires and substations, renewable power plants, or other grid modernization and resiliency efforts. Presently, those decisions largely ignore energy storage as an option in procurement or planning. At the same time, the technology landscape is changing fast. Advanced energy storage technologies—primarily lithium-ion batteries—are declining rapidly in cost: 12-15% per year over the last 6 years, and expected to continue at this rate through 2020. And next generation storage technologies—from flow batteries to advanced mechanical and thermal storage options—are already in early commercialization.
Moreover, the larger regulatory landscape for Maryland and energy storage is changing. The Federal Energy Regulatory Commission has proposed new rules to remove barriers to energy storage in regional electricity markets, such as the PJM market that Maryland is a part of. Similarly, the IRS is considering updating guidance on whether and how energy storage may access federal incentives.
This bill, directing a study of energy storage in the state’s electric system, will provide you, as well as your colleagues at the Public Service Commission, important information on how storage may lower costs and increase reliability for Maryland businesses and households. It will also determine how storage can assist the state in achieving its public policy goals, be that emissions reductions, infrastructure resiliency, or other aims. Finally, the study proposed in this bill will help identify what inadvertent barriers to storage exist in Maryland--remember, the grid was never designed contemplating cost-effective energy storage, so neither were the rules.
In 2016 the state of Massachusetts commissioned a study like the one proposed in this bill, and the results are instructive. Massachusetts policymakers discovered that system benefits to ratepayers were twice that of the direct services energy storage could be paid to provide; furthermore, the study identified specific Massachusetts barriers to realizing those ratepayer benefits. As a result, Massachusetts is now pursuing a set of programs to accelerate storage deployment on its grid; the state’s utilities have now examined and proposed storage projects; and new storage businesses are beginning to hire and invest in the state. 
Other states are already moving on energy storage. California, in addition to creating a state policy roadmap for storage and incentives for early deployments, has successfully deployed battery energy storage to avert power outages from a natural gas shortage. New York has employed energy storage as an alternative to distribution system upgrades in dense urban areas, where such investments are costly. Utilities in states like Arizona and Hawaii are proposing and building energy storage to cost-effectively integrate higher levels of rooftop solar. And a growing storage industry is hiring and investing in the states that are the early movers.
ESA supports the study described in HB 773 as a sensible step toward bringing energy storage into the Maryland electric system for the benefit of ratepayers, and I ask you to support this bill. Thank you.