By Alex Morris, Executive Director
There is something deeply gratifying about getting a bill to the finish line. I’m not talking about the federal Inflation Reduction Act, which will materially advance aspects of the energy storage, clean energy, and transportation sectors – a phenomenally important bill that would establish lasting important policies like the standalone energy storage investment tax credit. (Congratulations to everyone involved who helped bring meaningful climate, storage, and clean energy legislation to the cusp of passage!)
The legislation I’m talking about is AB 2625, a California bill sponsored by CESA and authored by Assemblymember Phil Ting, which is heading to the governor’s desk for signing.
AB 2625 is an example of the material policy steps CESA takes to build and strengthen workable and viable energy storage markets. The bill helps address the need for developers to reserve land for energy storage developments by more easily allowing leasing of only a portion of a parcel, without needing to subdivide it. Subdividing parcels is a local government topic that is complicated and interplays with zoning, environmental impacts, labor, local community, and other constituencies. When a parcel is formally subdivided, a map with the new subdivision typically needs to be approved via vote by the City Council or County Board of Supervisors, adding months and cost to the development timeline, alongside additional cumbersome work for local governments.
Solar and wind projects already have exemptions that help with leasing portions of parcels for clean energy development, and AB 2625 puts energy storage on more equal footing. This type of on-the-ground policy development is what will be needed for energy storage to be developed at the scale required for the modernization of our electric system. Even as California added nearly 2 gigawatts of storage last year, a record amount, tens of thousands of megawatts of energy storage will be needed in the coming years to meet California’s ambitious decarbonization goal – requiring hundreds of new developments, both in front of and behind the meter.
Making policy improvements can be tedious. With legislative approaches to policymaking, even a great idea can get watered down, opposed by parties, distorted, or blocked. The legislative process exposes policy ideas to influence or blockage from parties with lots of political power, making this process uncertain and fraught. Navigating the twists and turns of a legislative session requires vigilance, care, luck, tactics, (typically) a good idea, and more. While CESA is likely the largest energy storage-focused trade association in the world and works in the largest U.S. storage market, we are not a major political power in Sacramento on the level of constituencies like labor or other long-established groups. Getting a bill to the finish line with strong bipartisan support is thus even more meaningful – and encouraging as CESA expands its work into new jurisdictions across the U.S. West.
Still, at the end of the day, policy can be transformative and critical for establishing, balancing, and improving markets. Policies, big and small, build and shape the fundamental landscape for businesses and can create more opportunities for new entrants. While AB 2625 is not the fanciest bill and may not be discussed at all by the media if, or when, it is signed by the governor, it is another material step to growing the energy storage market, reducing customer costs, decarbonizing California's energy supply, and strengthening grid resilience and reliability. So, let’s take a moment to appreciate what we have achieved with AB 2625.
To all the CESA members out there, please let us know what to pursue next – our 2023 planning will start soon.