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Golden State to give energy storage another jolt

Amid an unprecedented surge of installed battery storage capacity in California, the state's top energy regulator and lawmakers are eyeing an increase in energy storage procurement targets for investor-owned utilities to help integrate growing volumes of intermittent renewable energy into the grid and to support electric reliability.

The California Public Utilities Commission this year plans to build on the breakneck pace of energy storage adoption it set in motion in 2016 when it ordered Edison International subsidiary Southern California Edison Co. and Sempra Energy subsidiary San Diego Gas & Electric Co. to expedite installations under the state's existing storage mandate, CPUC President Michael Picker told members of the Senate's energy and utilities committee during a Jan. 31 hearing.

The agency directed the utilities to accelerate their energy storage purchases in the Los Angeles region after the state last year placed a moratorium on natural gas injections at Southern California Gas Co.'s Aliso Canyon reservoir, which is the largest gas storage facility in the West, following a four-month methane leak at the site.

"When Aliso Canyon happened, we made the determination we were [going to] push the utilities to get 100 MW of battery storage in the area that would be affected electrically by the loss of Aliso Canyon. And in six months that 100 MW has been built and is connected to the grid," Picker said. "Even I got whiplash from the speed at which we moved."

That rapid response jump-started the state's battery storage market, boosting capacity on the wholesale electric grid to about 100 MW in January 2017, from about 3 MW one year ago, according to California ISO spokesman Steven Greenlee. "We expect to have five more projects of about 40 MW total ready to interconnect early this year," he said in an email.

SNL Image

AES is completing 30-MW and 7.5-MW battery projects for SDG&E. It plans to build its own 300-MW facility in Long Beach.

Source: AES Corp.

Among California's new energy storage assets are two 20-MW systems — SCE's Mira Loma Substation Battery Storage Project and AltaGas Ltd.'s Pomona Battery Storage 1 battery storage project. Tesla Motors Inc. provided the technology for SCE's system, while privately held Greensmith Energy Management Systems supplied and integrated equipment for AltaGas. Both projects went online at the end of 2016, but their completions were only disclosed in the past week.

In addition, SDG&E recently completed its 30-MW Escondido Battery Storage Project and its 7.5-MW El Cajon Battery Storage Project. The technology supplier for the SDG&E projects, AES Energy Storage LLC, a subsidiary of AES Corp., is in the final stages of commissioning both facilities.

"They will be online in a few days," a utility spokeswoman confirmed.

"Our latest efforts focus on energy storage as a way to help meet peak energy demand while incorporating renewables onto the grid," said SDG&E President Scott Drury on Jan. 31 in his keynote speech at the DistribuTech conference in San Diego.

After utilities and technology suppliers demonstrated their ability to ramp-up large battery-based storage installations in 2016, state energy regulators and many lawmakers intend to help them keep the momentum rolling.

Expanding the state's energy storage programs is among the CPUC's top initiatives in 2017, Picker told lawmakers at the Jan. 31 hearing in Sacramento. This includes increasing utilities' energy storage targets by up to 500 MW collectively, in accordance with a new law passed last session, Assembly Bill 2868. That amount is in addition to the 1,325 MW utilities in the state already must procure by 2020.

The commission plans to issue a decision in the first half of the year revising utility procurement targets and program rules. A separate 2017 initiative at the CPUC will explore how small-scale storage systems and other distributed energy resources installed on the customer side of the electric meter can be better incorporated into demand-side management.

Picker also pointed to a proceeding the CPUC plans to open before July 2017 that will explore the feasibility of entirely eliminating, or minimizing, the use of Aliso Canyon. Senate Bill 380, which codified the moratorium and a safety review at the facility, called for the CPUC to investigate options to provide regional grid reliability by other means, such as energy storage.

"I think we need to move forward aggressively and do everything in our power to support efforts to allow for increased storage," Sen. Scott Wiener, D-San Francisco, told colleagues at the hearing. The freshman state senator said battery storage was a solution to the operational challenges associated with expanding intermittent renewable energy, particularly solar power.

"We all know it's solvable with battery storage, so that seems to me to be an extremely high priority," he said.

California law requires utilities to source 50% of their retail electric sales from renewable energy by 2030, and 33% by 2020.

Another committee member, however, cautioned against moving too boldly on batteries for stationary storage. Batteries are "the dirtiest technology on the planet" because of manufacturing byproducts and the energy required to produce them, charged Sen. Bob Hertzberg, a Democrat representing California's San Fernando Valley. While the lawmaker cited the use of lead as an environmental concern, the vast majority of California's new energy storage capacity relies on lithium ion-based batteries.

Hertzberg also said he was worried that emerging technologies soon could make current state-of-the-art batteries obsolete, saddling utilities and their customers with "sunk costs."

But Harry Stern, a Democrat from Los Angeles, disagreed. "I don't see as much risk in the battery storage response as I do in the other way we've been storing energy, in natural gas formations," he said. "I think we saw that all too well with Aliso Canyon."

Regulated utilities are not the only power companies turning to large-scale battery storage to support grid reliability and renewable energy in the wake of the disaster.

The Los Angeles Department of Water and Power, the West's largest municipal utility, plans to procure 178 MW of energy storage by 2021 and 404 MW by 2025, starting with an initial 20-MW phase of its planned 50-MW Beacon Battery Energy Storage Project. The LADWP will begin building the first phase of the project in the Mojave Desert this summer, it said in a Jan. 31 press release.

AES also has pitched its 300-MW Alamitos Generating Station Battery Energy Storage System in Long Beach, to be combined with a new gas peaker plant also proposed. The independent power producer seeks to energize the first 100-MW phase in 2020, according to 2016 filings with the city.

Despite the recent progress, California's energy storage remains in the early stages, said the ISO's Greenlee.

"The long-term promise of energy storage is very positive, but in the absence of large amounts of energy storage for the short and medium term, we must continue to develop the additional operational innovations and solutions that will help us reliably and efficiently use renewable resources."