Utility-Scale Battery Storage Systems: Legal Issues and Opportunities
Federal and state government mandates and incentives, combined with technological advances, have dramatically increased renewable energy sources during the past decade. Variable renewable energy sources such as solar and wind have demonstrated great potential for meeting electric power demand but remain limited from a grid integration standpoint due to intermittency when the sun is not shining or the wind is not blowing.
As a result, state governments and independent system operators are placing increased emphasis on utility-scale energy storage systems and several states, including California, have adopted mandates and incentives for rapid deployment. While several different storage technologies exist or are in development – including pumped hydropower and thermal storage – increasing focus is on battery storage systems to meet energy storage needs. As with any energy project, however, utility-scale battery storage projects present land use, permitting and environmental and health and safety issues, and developers need to anticipate and address these issues to successfully meet project development timelines and goals.
Emerging Trends in Energy Storage Development
California led with government-mandated renewable energy goals, enacting AB 32 in 2006, which requires 33 percent of the state’s retail energy to be from renewable sources by the end 2020. Other states have followed suit. Hawaii, a state that is “off the grid” and entirely dependent on its own generating capabilities, has adopted the most ambitious goal to date, with 100 percent of its electricity to be supplied by renewable sources by 2045.
Renewable energy sources like solar and wind turbines have the potential to meet the demand for energy in many states and throughout our nation. These are variable energy sources, however, and electricity from fossil fuel combustion and other energy sources must be used to provide base load to balance the grid, as demonstrated by the California Independent System Operator’s well known “duck chart.” Last year’s massive leak at California’s Aliso Canyon natural gas storage facility underscored the need for alternatives to reliance on fossil fuel generation and led to California Public Utility Commission (CPUC) Resolution E-4791, ordering the expedited procurement and development of energy storage resources in the Los Angeles Basin.
As a result of these policy and economic forces, there is increasing emphasis on developing and implementing energy storage systems, both “behind the meter” and on a utility scale. Once again, California has led the way with enactment of AB 2514, which calls for 1.3 gigawatts of energy storage capacity from the state’s three large investor-owned utilities by 2020, and adoption of legislation earlier this year accelerating and expanding deployment of energy storage systems. Oregon and Washington have similarly enacted legislation to promote energy storage capacity and, just four months ago, Massachusetts became the first East Coast state to adopt an energy storage mandate.
Energy storage technologies are not entirely new. Pumped hydroelectric storage facilities have been used for decades to supplement generating capacity during peak energy demand, and a number of evolving mechanical, chemical, and thermal technologies are in use or development. Due to its ready availability, however, the principal focus to meet current energy storage needs is on battery energy storage systems (BESS), and lithium ion-based systems in particular. These systems offer very fast response times and high cycle efficiencies, can be used for utility-scale as well as residential and commercial applications, are relatively easy to deploy, and continue to experience a dramatic drop in costs. There is little doubt that utility-scale BESS are and will in the near-future continue to be the technology of choice to meet energy storage requirements in California and other states.
Utility-scale battery storage projects present great opportunities for developers, investor-owned utilities, and state governments to meet renewable energy goals, make better use of solar and wind resources, and reduce dependence on fossil fuels. However, as with any energy project, consideration should be given to land use, permitting, and environmental and health and safety issues in formulating effective strategies for development of utility-scale battery storage projects.
California Permitting Issues and Strategies
Development-related concerns for utility-scale BESS projects include site consistency with land use and zoning laws, worker safety, security and community safety measures, hazardous waste management and disposal, potential impacts on species and habitat, visual impacts, storm water management, and coordination with generation and transmission facilities. As with any new project-based technology, the myriad of issues relating to BESS projects are still evolving. Nonetheless, below we highlight some of the key emerging considerations.