Why the Northeast could soon rival California on energy storage
Experts say a recent FERC decision and falling prices are creating an opportunity for Northeast states to aggressively adopt energy storage.
While California and other solar-heavy states are leading on energy storage targets, experts say New York, New Jersey, Massachusetts and Maryland could quickly close the gap, with political support.
“Legislators in those states are putting everybody on notice that ‘We’re going there,’” said Mike Jacobs, a Cambridge, Mass.-based senior managing analyst with the Union of Concerned Scientists. “It might not be as lucrative as you want or as scary as you feared, but we’re going there.”
And they can “go there” because prices on storage systems have dropped as batteries and other technologies have flourished.
However, “without public policy prodding, really significant adoptions of energy storage are going to take a long time because of inherent inertia in the utility world,” Jacobs continued.
Judy Chang, a Massachusetts-based principal with the Brattle Group, agrees. In fact, she said, the Northeast could “out-megawatt” the sunnier west on energy storage if wholesale electricity marketers step up and if states unlock the benefits for customers as well as transmission and distribution providers.
States intent on maximizing energy storage at the local level received a complementary boost from the Federal Energy Regulatory Commission (FERC), which recently directed wholesale electricity market operators—Independent System Operators (ISO) and regional Transmission Organizations (RTOs)—to design energy storage rules.
Chang is one of four authors of a report predicting that FERC’s Order 841 is setting the course for 50,000 MW of storage nationwide.
With California forecasting 10,000 MW of storage longer-term, 50,000 MW across the country “is not that far of a reach,” she said.
Jacobs agreed, calling Order 841 an eye-opener at the grid level. “It says you can’t stand idle; you can’t exclude energy storage.”
‘Like peanut butter and chocolate’
While the fates of ambitious energy storage targets in New Jersey and Massachusetts are in flux, plans in both Maryland and New York are progressing.
For instance, Maryland has become the first state to offer tax credits to commercial and residential customers who design projects that can store electrical energy. This year, the Maryland Energy Administration is offering up to $750,000 in credits.
Farther north, the New York Public Service Commission (PSC) has green-lighted two initiatives to boost energy storage. One streamlines the export of electricity from private storage systems to Consolidated Edison’s distribution system. The other more than doubles the capacity—from 2 MW to 5 MW—of storage projects that qualify for New York’s clean energy program.
Both measures approved by the PSC align with Gov. Andrew Cuomo’s goal of achieving at least 1.5 GW of storage by 2025. They also garnered backing from advocacy organizations such as Vote Solar and the Solar Energy Industries Association (SEIA).
“It’s terrific that states like New York have taken that leadership to drive a cleaner economy,” said Sean Gallagher, SEIA’s vice president of state affairs.
The falling cost of solar—a 70 percent decrease in the last half-dozen or so years—combined with sound state policies have driven deployment and made installations and operations more valuable, Gallagher explained.
“Energy storage is in a similar position to where solar was six or seven years ago,” he continued. “Prices are dropping. Now is the time for states to help get it out in the marketplace.”
Gallagher says solar power and energy storage are “like peanut butter and chocolate. They’re great on their own and terrific together because they create market opportunities for one another.”
In Massachusetts, senators are attempting to add prodigious amounts of both foodstuffs to the state’s diet by accelerating a transition to renewable power and bumping energy storage up to 1,766 MW by 2025. The far-reaching proposal, which builds on the Global Warming Solutions Act of 2008, is in limbo because of a wary House and Republican Gov. Charlie Baker.
Disappointment with energy storage goals laid out by the Baker administration prompted senators to try to “out-California California,” Jacobs said.
From ‘exotic’ to mainstream
Jacobs has witnessed energy storage evolve from the “couple of science projects” it was 20 years ago to the mainstream entity it is becoming today.