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DISTRIBUTED GENERATION
5. Instant recharge. Wrapping up a fast-track procurement process that began less than
a year ago, California utility San Diego Gas & Electric (SDG&E) on February 24 officially put into
service the 30-MW/120-MWh system supplied by AES Energy Storage in Escondido, Calif.-a
project that is currently the largest lithium-ion storage battery in the world. Courtesy: SDG&E
The company will receive fixed monthly
resource adequacy payments under the ESA
and retain rights to earn additional revenue
from energy and ancillary services provided
by the batteries.
On January 30, SCE opened the
20-MW/80-MWh Mira Loma Battery Storage
Facility, constructed by Tesla in just 88
days. The installation features two 10-MW
systems comprising 198 Tesla Powerpacks
and 24 inverters that were manufactured at
the Tesla Gigafactory in Nevada (see sidebar:
" A Gigafactory Race " ).
And on February 24, Sempra Energy
subsidiary SDG&E unveiled a 30-MW/120MWh
lithium-ion battery energy storage
system in Escondido, Calif. (Figure 5), just
days after it put another 7.5-MW/30-MWh
system online in El Cajon. AES Energy
Storage built the two projects, fast-tracked
under " expedited ongoing negotiations. "
At the facility's unveiling, Josh Gerber,
SDG&E's manager of advanced technology
integration, told POWER it would serve
mainly in a time-shifting role, charging during
the day and discharging during the evening
as a " bulk resource for the grid. " AES
Energy Storage President John Zahurancik
noted that the quick evolution of battery
May 2017 | POWER
storage technology had made this new role
possible. Battery storage system costs have
plunged 85% since AES's first project in
Huntington Beach, Calif., in 2009, he said.
" If we had faced these challenges just a few
years ago, we would be looking at a new gas
power plant. "
Charging Forward
According to GTM Research, the momentum
from the Aliso Canyon response will
continue, enabling California to further its
dominance as the biggest battery storage
market over the next five years. Hawaii,
Massachusetts, New York, and Texas will
vie for the second spot, buoyed by promising
policy developments. Generally, the
U.S. market will see a nearly 12-fold expansion
from 221 MW in 2016 to roughly 2.6
GW in 2022, GTM Research forecasts.
Among recent crucial front-of-the-meter
policy developments, Oregon's Public Utility
Commission earlier this year issued
guidelines under the 2015-enacted HB
2193, a law that requires Oregon utilities
Portland General Electric and PacifiCorp to
have a minimum of 5 MWh of energy storage
in service by January 2020. Massachusetts,
in August 2016, meanwhile, became
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the third U.S. state to enact an energy storage
mandate, though the exact volume that
must be procured by January 2020 won't be
decided by the state Department of Energy
Resources until this summer. California,
which enacted a mandate in 2014, requires
utilities to procure 1,325 MW of energy
storage by 2020.
As significantly, New York City in September
2016 unveiled the first citywide
mandate, aiming for an energy storage goal
of 100 MWh by 2020. Hawaii, which recently
passed a 100% by 2045 renewable
energy mandate, saw its state legislature introduce
bills on energy storage tax credits
and infrastructure loans.
On a federal level, FERC issued a notice
of proposed rulemaking calling for broad
changes in organized wholesale markets to
encourage energy storage participation. In
Congress, a bipartisan group of lawmakers
introduced a bill to establish a 30% investment
tax credit for storage, though industry
observers are skeptical this will come to
fruition any time soon.
Around the world, a number of countries
also implemented policy measures
that should help battery storage thrive in
commercial markets. In late 2016, the
UK's Electricity Storage Network awarded
15-year contracts to projects with storage
components. In the European Union, where
a market design initiative already seeks to
provide a level playing field for all electric
grid flexibility solutions, a proposed recast
of the Renewable Energy Directive seeks to
support energy storage for integration of renewables
on the grid.
According to the International Finance
Corp. (IFC), China-which has already
widely been deploying storage throughout
its grid-is in the process of reforming its
energy markets, opening opportunities for
independent power producers to provide
ancillary services and capacity with battery
storage systems. Similar measures are underway
in Chile, Brazil, and Mexico.
In India, a July 2016 tender for several
hundred megawatts of solar PV capacity
includes the requirement for every 50 MW
of PV capacity to have 5 MW/2.5 MWh
of associated storage. And in sub-Saharan
Africa, where remote power systems are
expected to provide roughly 70% of energy
services over the next few decades given the
lack of grid connectivity, " It is expected that
the majority of these remote power systems
will include energy storage as the technology
continues to decrease in price, and many
power systems will begin to rely more heavily
on variable renewables, " said the IFC.■
-Sonal Patel is a POWER
associate editor.
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