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Calif. Senate advances 10-year 'energy storage initiative'

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Calif. Senate advances 10-year 'energy storage initiative'

A decade ago, California lawmakers launched a 10-year, $2.1 billion program to energize demand for solar electric systems at homes and businesses across the state. The phased-out California Solar Initiative is widely considered to have been a smashing success, having supported the lion's share of the 5,337 MW of photovoltaics distributed across roughly 673,000 sites, according to the latest official count, in addition to fueling a 100,000-job-strong solar industry.

Some lawmakers now want to give distributed energy storage a similar jolt. Ahead of a June 2 deadline for bills to pass out of their house of origin, the Senate on May 31 advanced Sen. Scott Wiener's proposed 10-year, approximately $1 billion "energy storage initiative" on a 23-13 vote. Senate Bill 700 would offer declining rebates to customers installing energy storage systems, with an annual budget of $62 million to $141 million. At least 30% of the funds would be reserved for projects in poor and polluted parts of the state.

"This bill will absolutely transform the market," Wiener said in an interview. The program would build on the California Public Utilities Commission's recently revamped self-generation incentive program, which has sparked a run on rebates for energy storage as homeowners and business owners respond to falling battery costs.

But the program, which also funds wind energy, waste energy recovery, fuel cells, and combined heat and power technologies, "is constantly on the verge of insolvency," Wiener said. Current law authorizes investor-owned utilities to collect $166 million annually from their customers through 2019 to run the program through 2020. Wiener's proposal would peel energy storage from that program, along with funds already dedicated for storage, to create the new initiative and extend incentives through 2027.

"We are creating a 10-year runway for the industry and consumers to rely on, so energy storage can become a realistic option for reducing greenhouse gas emissions," the senator said.

Addressing the 'duck chart'

Wiener is pitching the program as a solution to California's increasingly frequent midday oversupply, when many solar-powered homes and businesses produce more energy than they consume and solar farm production peaks on the wholesale grid, followed by steep ramp-ups of natural gas-fired resources as demand for power spikes toward sunset. The California ISO's famous net load "duck chart" depicts the operational challenges associated with intermittent solar. The grid operator has touted storage as one of several tools to address the state's supply and demand imbalance, especially in the spring.

More distributed energy storage also will be necessary to meet the ambitious targets of Senate President pro tempore Kevin de León's S.B. 100, Wiener said. The bill, which the Senate also passed May 31, by a 25-13 vote, would boost the state's renewables portfolio standard to 60% by 2030, from the current 50%, and set a goal of reaching 100% by 2045.

"If we are serious about 100%, we need more distributed energy, more distributed storage," Wiener said. "Energy storage is the missing link. If we are able to foster innovation, we will solve the problem of over-generation during the day and under-generation in the evening."

More than 60 environmental groups, solar and storage companies back the bill. All three of the state's large investor-owned utilities — Edison International's Southern California Edison Co., PG&E Corp.'s Pacific Gas and Electric Co. and Sempra Energy's San Diego Gas & Electric Co. — have opposed the measure, as has the Sacramento Municipal Utility District.