Power industry regulators around the world are increasingly coming to realize the multiple benefits and advantages of intelligent energy storage solutions. As Navigant highlights in the Q1 2015 edition of its Energy Storage Tracker, new regulatory mandates in the U.S., Europe and across Asia-Pacific were key factors that made 2014 “a major year for the global energy storage industry.”
Demand for both utility-side and customer-sited, “behind the meter” intelligent energy storage systems is on the rise. Falling manufacturing costs, improved performance and utilities’ drive to reduce greenhouse gas (GHG) emissions while at the same time enhancing the resilience and efficiency of power grids is adding to the momentum.
The introduction of innovative financing models — such as Green Charge Networks’ Power Efficiency Agreements (PEAs), which is a shared savings model for customer-sited energy storage — are really moving the industry forward. The PEA is a zero-down solution that still allows customers to reap demand charge savings. Under a PEA, Green Charge installs, owns, operates, and maintains the technology at the host locations. In return, Green Charge receives a share of the savings from the reduced demand charges on the customer’s energy bill. Financial mechanisms like PEAs are opening up opportunities for commercial and industrial companies, as well as schools and municipalities, to reduce peak power demand, boost energy efficiency and build clean, renewable energy-fueled microgrids.
Intelligent Energy Storage: A Fast-growing Market
Navigant estimates 696.7 megawatts (MWs) of power storage (excluding pumped storage) were announced for the 2014-2015 period. “Battery and other system component costs have been falling rapidly, allowing energy storage to become an economical alternative to traditional power generation for certain applications,” Navigant highlights in its latest Energy Storage Tracker report.
“Distributed and behind-the-meter energy storage solutions have been making a significant impact on the global market over the past year due to their flexibility and innovative financing models.”
New regulatory mandates in the U.S., such as those set out in California’s landmark AB 2514, highlight the lower emissions and infrastructure costs, as well as greater efficiency, flexibility and affordability, of today’s intelligent energy storage solutions.
Energy Storage Milestones
Southern California Edison (SCE) kicked off California investor-owned utilities’ (IOUs) drive to acquire 1.325 gigawatts (GWs) of energy storage capacity by the end of the decade. Giving preference to clean, environmentally sustainable local grid resources, SCE awarded over five times the minimum 50 MW of advanced energy storage it was required to by state regulatory authorities.
SCE’s local energy storage procurement contracts included distributed, “behind the meter” systems installed on customer sites.
A confluence of factors — state government incentives along with rising utility peak power demand charges and the ongoing drought — is sparking strong interest in advanced energy storage solutions on the part of leading California businesses, schools and municipalities. The GreenStation intelligent energy storage solution, for example, is being used by a growing number of businesses, from national retail chains and health care providers to California schools and municipalities. The GreenStation reduces the demand charges on the facility’s energy bill through a process known as “peak demand shaving.” By tracking and learning from the commercial, industrial, or municipal facility’s energy usage, it automatically charges or discharges its batteries to maximize the energy savings.
In late February, Green Charge Networks announced that Mountain View-Los Altos Union High School District (Santa Clara County), Oak Park Unified School District (Ventura County), Butte Community College (Butte County), Peralta Community College District (Alameda County), and California State University Fullerton (Orange County) will install over 1,500 kilowatt-hours (kWh) of intelligent energy storage capacity. By installing energy storage, California schools will realize energy savings of up to 50 percent in demand charge reduction. Across the schools that have signed up for energy storage via a PEA, the projected cumulative energy savings is over $1 million dollars over the contract term. This will reduce peak demand charges incurred from electric vehicle charging stations, enhance grid stability and resiliency.
The money they save on their monthly electricity bills can be put into their primary mission: educating California’s youth and adult population. That’s a win socially, environmentally, and financially.
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