US RENEWABLE ENERGY STORAGE der 755, increased the payment structure that utilities had to pay for fastresponding sources including batteries and flywheels in the frequency regulation service markets. The push towards renewable integration of the energy mix was later expanded by Order 784, which put fast response solutions against traditional gas or coal-fired plants in the ancillary services market. The accounting and reporting rules introduced in Order 784 aimed to help utilities achieve rate recovery for energy storage equipment. In January 2016 the US Supreme Court ruled that demand response be allowed in wholesale markets, as FERC had previously implemented. Roberts said: “This also is a big gateway for storage (and of course, storage performing demand response, as well as other applications). Energy markets are definitely open to renewables, as it is a least-cost market, so if the price fits they are allowed.”
Risk adverse in changing market
So the drive towards a decarbonized future in the US is being determined by customers and grid-scale suppliers. Both will be heavily influenced by price. Lithium-ion, arguably the most popular choice of chemistry for the residential to grid-scale energy storage world, is seeing costs fall due to economy of scale. This is due in large part because of gigafactories such as Tesla’s in the US, and the host of others planned for Sweden, Hungary, Germany and Australia as capacity is forecast to reach 278GWh by 2021. But the US’s decarbonization goals rely on more than cheap batteries. “The way utilities operate is they are very risk averse and focused on longterm planning. However, nowadays they see the writing on the wall,” says Anderson. “Most see coal as becoming the dinosaur in our energy system because our market place has access to cheaper natural gas and renewables.” In 2001 the US Environment Protection Agency launched the Green Power Partnership program to increase the use of renewable electricity. The GPP set out the process to reduce emissions so that utilities, at least in the regulated states, were able to see what the energy resource mix would, or at least should, be in the next 15 years. “In states not as politically supportive of coal energy, such as Minnesota, which can see where the future is heading, they will have to make sig-
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nificant investments to upgrade their coal plants,” says Anderson. “In our state we have a goal of 80% reduction of carbon across the economy by 2050, and that’s parallel with other states’ goals and some are more aggressive than that.” One of the most progressive states is California, whose governor, Jerry Brown, wants the state to be reliant on 50% renewable energy by 2030. Its transition to a renewable energy future is highlighted by two events. The first happened on July 12, 2016, when the state generated a record 8GW of utility-scale solar and 4GW of behind-the-meter (residential or commercial) solar. The second happened earlier this year, when 77.5MW of storage was speedily added to the state’s grid — in systems delivered by the Tesla-Edison project, San Diego Gas & Electric with AES Energy Storage and Greensmith Energy Partners with AltaGas — following a California Public Utilities Commission mandated procurement order. This was after a rupture in the Aliso Canyon natural gas reservoir caused 197,000 tonnes of methane to spill into the atmosphere in October 2016. Lohr said that with strong renewable energy goals and state incentives for clean energy products, California is on a trajectory to dominate the clean energy adoption race. “Based on declarations from California and several other states, we think state leaders have made it quite clear to both state residents and innovative, energyfocused businesses like Sonnen that these commitments will not waiver despite the national Paris Agreement withdrawal.” So it seems the US is getting close to a tipping point where de-carbonization is not going to be preventable. “I think it’s not stoppable,” says Anderson. “But the big question is how fast, who will lead on this and who will lag behind?”
Tipping point within reach for energy industry
How much and how fast the transition to a fossil-fuel free future will happen is debatable, but the drive towards integrating renewables in the energy mix is a given in many states. “What we are looking at is a question of knowing coal use is already cut in half and then it’s a question of, ‘will that be replaced with a renewables infrastructure?’ That could be the tipping point, if markets and policy
“Hundreds of mayors and companies have pledged to abide with agreements and they will meet those obligations. I even know of a former Exxon CEO that supports the Paris Agreement.” — Ellen Anderson, University of Minnesota
“We don’t believe Trump’s push for fossil fuels will have a significant impact on the continuing adoption of US energy storage. Innovation in the renewable energy sector and the economics of falling prices will only bring more jobs into the market. The solar industry has demonstrated this.” — Olaf Lohr, Sonnen Batteries International • Autumn 2017 • 69