FERC rule could spur 50K MW of energy storage — study

Source: Sam Mintz, E&E News reporter • Posted: Friday, February 23, 2018

A consulting firm released a study yesterday predicting a new federal rule could spur development of about 50,000 megawatts of energy storage.

At issue is the Federal Energy Regulatory Commission’s Order 841, which aims to remove barriers to energy storage technology in electricity markets (Greenwire, Feb. 15).

The Brattle Group study says the rule could clear the way initially for 7,000 MW of energy storage, with the potential for more growth depending on state policies.

Grid operators have nine months to file tariffs in line with the order and an additional year to implement them.

Energy storage in the United States could increase to 50,000 MW if costs of the technology continue to decline as projected and states improve their regulatory frameworks, the Brattle report found.

But the report also says regulations need to make use of storage’s value to customers, utilities and markets.

“There are important, but narrow, applications in which storage is already cost effective today,” said Judy Chang, one of the study’s authors, in a statement. “We are not quite there yet, but as costs decline further, storage will be transformative for the power industry.”

Some states have already made moves. California, for example, has a mandate for utilities to add 1,300 MW of storage to the grid by 2020. Nevada and Massachusetts have smaller mandates, and other states in all regions of the country are exploring similar laws.

But challenges remain, the report says.

“Despite the significant potential benefits, storage still faces economic, regulatory, and market barriers that limit its overall market potential,” it says.

According to the report, the challenges include unclear limitations on a utility’s owning and operating storage, and the fact that storage is not often considered as part of transmission planning.

And despite projections of future decreasing costs, storage remains expensive, especially at larger scales.