Energy Storage Remains Key Component of Clean-Energy Agenda

Controversial nuclear subsidy bill also calls for 600 megawatts of energy storage by 2021, 2,000 megawatts by 2030

energy storage
If New Jersey is going to achieve the Murphy administration’s ambitious clean-energy goals, storing the energy created by renewable power sources such as solar and wind will be crucial.

To that end, a controversial nuclear subsidy bill up for consideration today in committees and posted for a vote on Monday in the state Senate also sets goals of 600 megawatts of energy storage by 2021, and 2,000 megawatts by 2030.

Few are asking whether the energy-storage targets are achievable, even though the industry is just starting to deploy the technology, or what the costs could be, which are almost certain to be partly borne by utility customers.

But there is widespread consensus that energy storage not only makes intermittent sources of power like solar and wind more reliable — the sun doesn’t always shine and the wind doesn’t always blow — but also offers other benefits to ratepayers in the long run.

Meeting peak demand

With extensive commercial energy storage available, the power grid will no longer need large reserve margins of power ready to provide when electric needs peak, nor will there be as much need for expensive “peaker” plants, according to Paul Patterson, an energy analyst with Glenrock Associates.

That means cheaper costs to electric customers, predicted Doug O’Malley, director of Environment New Jersey, who calls energy storage the forgotten child of the clean-energy revolution. “It will benefit ratepayers in the long term.”

But only if policymakers work out kinks in the regulatory system here in New Jersey that have frustrated state efforts to move the technology, which uses batteries to store energy produced by a wide array of sources, forward.

Three years ago, the state Board of Public Utilities gave out $3 million in grants to 13 projects to build energy storage alongside renewable energy facilities. None moved forward, caught up in a regulatory barrier imposed by PJM Interconnection, the operator of the regional power grid, according to Peter Peretzman, a spokesman for the state agency.

PJM denies developers revenue

The grid operator’s decision denied the projects’ developers revenue from PJM they thought they could boost the economics of the energy storage facility. Without that revenue, the projects died.

“There are some tough regulatory burdens to knock it down,” explained Lyle Rawlings, founder of Advanced Solar Products in Flemington, a developer in some of those projects who has lost money as a result. “There are little rules that cause problems.”

Nevertheless, energy storage is a rapidly growing technology. Just last week, the Federal Energy Regulatory Commission ordered regional transmission operators such as PJM to ease their rules to allow electric storage resources to participate in their wholesale energy markets.

In simpler terms, it means energy storage facilities can compete with conventional generating plants to meet power demands on the power grid. Instead of building a costly centralized power plant, energy-storage facilities could provide the needed power, according to Thomas Leyden, a senior director at EDF Renewable Energy.

“If you can store the product, it is a real game changer,” agreed Patterson, the energy analyst. “It has the potential to disrupt the energy markets in a major way.”

It is not likely to happen, however, without a government boost, say proponents. “You need incentive programs in place to make it happen,” Rawlings said.

‘Transforming the grid’

O’Malley agreed. “We’ve got to jump start the market. Energy storage, like any new technology, but we are talking about transforming the grid.”

Just how transforming that will be depends on whether the nuclear subsidy bill, the key element in the legislation, advances today. The basic provisions of providing $300 million a year to Public Service Enterprise Group remain unchanged.

Other components in the bill to win approval of the Murphy administration were still contained in the bill early yesterday, although intensive negotiations were continuing. As currently drafted, however, the bill faces intense opposition from both the solar and offshore wind sectors, both expected to be primary drivers of the Murphy administration’s clean-energy agenda. To date, the governor’s office has remained silent on the bill.