By Sergio Dueñas and Lily Backer
This week, the Department of Energy (DOE) announced the Long Duration Storage Shot, the latest under the organization’s umbrella of Energy Earthshot Initiatives. Long Duration Storage Shot aims to accelerate technology and commercialization to to reduce the cost of grid-scale energy storage that can deliver 10+ hours of duration by 90%. At its core, this program recognizes that greater penetrations of variable renewable energy will require increasing durations of storage to balance load and supply, and that through scale, significant cost reductions can be achieved.
Today, the vast majority of grid-scale energy storage installed in the US can be classified as long duration energy storage (LDES). So why would LDES need support from the Long Duration Storage Shot to deploy at scale throughout the country?
Currently, most long duration energy storage comes from one technology type: pumped hydro storage (PHS), which accounts for over 90% of the installed storage capacity in the nation. PHS is a crucial LDES resource, which requires specific geographic conditions to be successful (large canyons with reservoirs of water, abundant water supply). With the growing need for LDES in diverse geographies nationwide, there is a demand and opportunity for a variety of storage technologies that can be easily sited and deployed anywhere that the grid requires support.
The Long Duration Storage Shot addresses this by considering all types of technologies for development of a diverse national portfolio – whether electrochemical, mechanical, thermal, chemical carriers, or any combination that has the potential to meet the necessary duration and cost targets for grid flexibility. This momentous opportunity highlights the key role energy storage will play in our nation’s path to a carbon-free future.
As a global leader in the energy transition, California has already taken substantial steps to develop and diversify its storage portfolio. California is home to over 3 GW of PHS, a figure that includes Los Angeles Department of Water and Power’s (LADWP) Castaic Power Plant. These resources, paired with the growing deployment of battery energy storage, have propelled California to the leading position on storage capacity within the US. By 2020, California counted 4.2 GW of energy storage capacity in total, according to the DOE’s Global Energy Storage Database. For reference, the other leading energy storage states, New York, Hawaii, and Texas, collectively have 1.98 GW of storage.
California leads in long duration energy storage according to a variety of other indicators:
At the transmission level, the California Independent System Operator (CAISO) estimates that over 1.4 GW of incremental battery storage will be operational by September 2021, relative to June 2020.
California Community Choice Aggregators (CCAs) led a first-ever RFP solicitation in 2020 for 500 MW of 8-hour energy storage, set to be online by 2026.
Finally, as a result of CESA’s advocacy, the California Public Utilities Commission recently set a historic procurement target for 1 GW LDES by 2026 – the largest procurement directive of its kind to date in the United States.
But the work is far from over. Given recent planning models, the state will need 92.5 GW of additional solar PV and wind generation and significantly more energy storage to reach 100% decarbonized electric sales by 2045.
As the definitive voice of storage in California, CESA plays a leading role by modeling and determining how much storage the State will need to achieve its ambitious climate goals and evaluating the optimal operational characteristics of that storage portfolio.
In 2020, CESA partnered with Strategen Consulting to conduct analysis on the future need for LDES given California’s ambitious climate goals and resource mix. This study, Long Duration Energy Storage for California’s Clean, Reliable Grid (2020), leveraged first-class capacity expansion modeling capable of identifying the value of inter-day energy shifting. The study concludes that California will need between 45 and 55 GW of LDES by 2045 to achieve its decarbonization goals while retaining reliability.
CESA effectively leveraged these findings in its regulatory activities, contributing significantly to the successful and historic CPUC procurement directive and CCA RFPs mentioned above. California’s first-mover approach is already having an accelerating effect on the development of these resources throughout the nation. In Texas, CPS Energy has commenced procurement for 500 MW of firming capacity, seeking storage with durations of 4, 6, and over 12 hours. In Virginia, Dominion Energy initiated a request for proposals (RFP) seeking up to 100 MW of storage with 4- and 10-hour durations. These economies of scale will contribute significantly to the DOE’s effort to bring down the costs of LDES.
Additionally, CESA’s advocacy efforts are setting out a roadmap of best practices that will help guide market development in other states. These contributions include:
Advocating for better capacity counting methodologies
Providing technical input at the energy commission and public utilities commission on how to model emerging technologies
Advocating for expedited approvals of LDES projects with de minimis environmental impacts to ensure reliability
Promoting durable compliance frameworks that work within a decarbonized future
Thanks to the diligent work of state regulators, advocacy groups, and the storage industry, California is already ahead on the curve of LDES, and it is well-positioned to contribute to these federal targets. CESA celebrates the DOE’s investment in LDES, showing the nation that energy storage is an essential component of our collective decarbonized energy future.
The California Independent System Operator (CAISO) is making history this summer by integrating thousands of megawatts of new energy storage resources. In the midst of this exciting milestone, storage and grid operators are preparing for the challenges of a potentially very hot and dry season.
Of the new resource capacity coming online, 1,493 MW is from battery energy storage systems (BESS) and will coming online by September 1, 2021.
To best understand the upcoming challenges and determine how storage providers can support reliability under challenging conditions in California, CESA Executive Director Alex Morris sat down with Mark Rothleder, Senior Vice President and Chief Operating Officer at CAISO for a conversation titled, Getting Summer-Ready with CAISO.
Summer 2020 was historically difficult for California’s electric sector. In mid-August, extreme heat caused spikes in electricity demand on the grid, and California struggled to meet these needs due to a confluence of resource outages and scheduling issues. This resulted in the CAISO initiating rolling outages for the first time in 20 years in the state on August 14 and 15, 2020.
While the outlook for 2021 grid conditions is better than last year, the anticipated hot and dry weather ahead could pose risks for a second consecutive summer of rotating outages for some or all of the following reasons:
The CAISO anticipates that weather events such as extreme heat or subpar solar conditions will cause a 2.5 GW (or 5%) increase in demand on the grid, relative to 2020. These demand conditions and weather forecasts may place continued and reliable operation of the grid at risk. Moreover, increased heat could increase the likelihood of wildfires across California, augmenting the chance of outages.
California had its second consecutive year of below normal precipitation. As a result, statewide snow water content is lower than 2020. This has resulted in California’s major reservoir storage levels being at 70% of average by April 2021 (compared to 101% of average in April 2020), significantly reducing hydroelectric power resources due to low water flow.
While California is a net exporter of energy across the year, the state benefits greatly from imports during hours with the tightest supply. The CAISO performed a study to evaluate the grid’s vulnerability under various peak conditions, particularly when energy imports are limited. Their analysis revealed that California’s grid could be at risk in the event of a widespread heat wave if neighboring states are also experiencing extreme weather and peak demands, limiting their ability to support.
The challenges mentioned above have pushed agencies and stakeholders to consider reforms to the planning and reliability process of the state, particularly within the realms of interconnection and resource adequacy. While these reforms will be essential in the future, the CAISO has highlighted several high-impact, near-term actions the storage community can take on to help maintain reliability on California’s clean grid this summer:
2021 will be the biggest year for energy storage deployment to date, placing California’s energy storage industry in the spotlight. The CAISO is expecting 3,961 MW of additional capacity to become readily accessible by September 1 – of this total, 1,493 MW will come from battery energy storage resources. Meeting commercial operation dates is critical to supporting reliability for Californians this summer. Showing up is the first step to demonstrating the viability of storage as a mainstream solution!
Responsiveness of the storage community to CAISO alerts and directives is essential. Exceptional dispatches and requirements to maintain a state-of-charge can pop up on days with insufficient supply; the storage industry should pay close attention and work to keep the lights on!
Ultimately, each individual has the power to help mitigate systemwide risks. Being a conscious consumer of electricity and planning activities mindfully to support the grid can lower the likelihood of insufficiency in particularly tight periods.