Upcoming Event: Energy Storage for the Grid: Watchful Waiting or the Perfect Storm?
I'll be moderating Energy Storage for the Grid: Watchful Waiting or the Perfect Storm? at the MIT Enterprise Forum Northwest's May 8, 2012 program at Seattle's Museum of History and Industry (MOHAI) , 2700 24th Ave East. The event, which includes a networking reception, will be held from 5:00 to 8:30 pm.
The evening's panelists will be:
- Terry Oliver, Chief Technology Innovations Officer, Bonneville Power
Administration - Alexander H. Slocum, Professor, Massachusetts Institute of Technology
- Chris Wheaton, Chief Operating & Financial Officer, EnerG2
- Nathan Adams, Manager of Development and Emerging Technologies, Puget Sound Energy
Among other topics, the panel will address:
- The most promising energy storage strategies
- How different storage methods could work together with the grid in the Northwest and nationally
- How entrepreneurs, the changing energy marketplace, grid operators, and utilities are responding to the call to build the foundation for a clean energy economy
For more information about this event, visit MITEF Northwest's web site.
I hope to see you there! In the meantime, for those who are following energy storage, I'm "tweeting" regularly on that topic as well as Department of Defense renewables procurement at @BillHolmesStoel (#energystorage).
CUB Policy Center and UO Hold Inaugural Smart Grid Conference in Portland
The CUB Policy Center, in partnership with the University of Oregon School of Law, will be holding its inaugural policy conference: Smart Grid: Today's Regulation and Tomorrow's Technology, on Friday, October 21, 2011, at the University of Oregon White Stag Block (70 NW Couch St., Portland, OR 97209). The luncheon keynote speaker will be former FERC Commissioner Nora Mead Brownell, who is the co-founder of ESPY Energy Solutions.
The conference is designed to educate utility analysts, policy analysts, attorneys, industry professionals, stakeholders and others on the current regulatory environment in Oregon and the region and to provide a forum for investigating the opportunities and challenges of integrating the Smart Grid into that environment. The CUB Policy Center notes that space for this conference, which promises to be well attended, is limited and encourages attendees to register early.
I'll be participating in the Closing Panel to recap and discuss lessons learned during the day, and I hope to see you there.
New Resources for Electric Energy Storage
For those who like to pay close attention to developments in the energy storage industry, take a look at Stationary Electricity Storage, which collects and presents articles about storage industry news, noteworthy projects, and other topics. It's well organized (with articles filtered by category, storage provider, organization and location), offers a free daily newsletter and looks like a good way to stay on top of developments in this expanding sector. (Thanks to Greg DelSesto for introducing me to this new site.)
On a related note, I'll be chairing Infocast's Developing Grid Storage Projects in Dallas from October 5 through October 6. Stoel Rives partner John Thompson will be speaking on "Intellectual Property Protection for Grid Storage," and Dave Hattery, a partner in our Seattle office, will be speaking on "Negotiating the Terms and Navigating the Risk of a Procurement Contract and Other Financial Documents." The conference features an impressive list of speakers who are very active in the energy storage industry, and I hope to see you there!
CPUC Seeks Comments in AB 2514 Electric Storage System (ESS) Docket R.10-12-007
California’s AB 2514 directs the California Public Utility Commission (CPUC) to determine appropriate targets, if any, for load-serving entities to procure viable and cost-effective energy storage systems. If the CPUC decides that targets are appropriate, it is supposed to set dates for achieving those targets.
As a follow up to an AB 2514 workshop held on June 28, 2011, Administrative Law Judge Amy C. Yip-Kikugawa issued a ruling asking for comments on the presentations made at the workshop by the California Energy Commission, the California Independent System Operator, Southern California Edison, the California Energy Storage Alliance, AES Energy Storage, Beacon Power Corporation and KS Engineers, all of which were attached to the ruling. The ruling asks the parties to comment on whether they agree or disagree with the presentations.
In addition, the ruling seeks comments from parties on the following questions:
- Which barrier(s), either identified by the presenters or the CPUC, do you believe present the greatest impediment to more widespread usage of energy storage and development of ESS in California?
- Are there other barriers that were not identified during theworkshop? Please explain how these other barriers impede theusage or development of energy storage and whether they needto be resolved at the Commission or other forums.
- To whatextent can the Commission assist in removing these barriers?In your opinion, are there certain barriers that need to beresolved first, and therefore have higher priority?
The deadline for comments is August 29, 2011, and reply comments will be due September 16, 2011. Your can find a copy of the ruling and attachments here.
EPRI Project to Develop Functional Requirements for Customer Energy Storage System (CESS) Launched - Public Webcast July 22
The Electric Power Research Institute (EPRI) is developing a new report to define functional requirements for customer energy storage systems (CESS). The project is engaging energy storage stakeholders to collaborate on the development of the functional requirements through a public process.
EPRI's effort is designed to create an understanding between electric utilities and their storage needs, the manufacturers and suppliers of customer energy storage systems, and customers of the systems.
A webcast open to all stakeholders will take place on Friday, July 22, 1:30 PM – 3 PM ET. During that webcast, attendees will be asked to help refine the draft document, and provide comments. Registration is required at https://www2.gotomeeting.com/register/855889739.
This new EPRI report will builld on last year’s efforts to develop functional requirements for utility systems that support Distributed Energy Storage Systems (DESS), substation grid support and renewable energy integration.
Questions, comments and any feedback can be directed to cess@ttcorp.com. A copy of the CESS functional requirement document will be circulated among registrants a couple of days before the webcast.
Thanks to Emanuel Wagner, EPRI's Project Coordinator at Technology Transition Corporation, for the tip about this webcast.
Coming Very Soon: CPUC Energy Storage Workshop
On Tuesday, June 28, 2011, the CPUC will hold an “Electric Energy Storage Workshop” as part of its R10-12-007 proceeding for AB 2514, which defines the process by which the CPUC will consider electric energy storage standards for California’s investor owned utilities. The workshop will be held at in the Golden Gate Room at CPUC’s headquarters from 9:30 am to 4:00 pm.
According to a draft agenda circulated by the CPUC, the theme of the workshop will be addressing barriers to entry facing Electric Energy Storage (EES). The workshops goals are to identify actions that the CPUC should consider, as well as whether and how it should participate in other forums.
The morning will feature presentations from several different perspectives, with each presentation to be followed by Q&A:
- Presentation from UC Berkeley and California Energy Commission (CEC) team on “2020 Vision Project”
- Presentation from CAISO about recent storage-related activities at the Independent System Operator, including findings from recent studies.
- Presentation from Southern California Edison (SCE) discussing a white paper entitled Moving Energy Storage from Concept to Reality.
- Presentation from California Energy Storage Alliance about developer’s perspectives
The afternoon will feature a facilitated presentation about a staff straw proposal concerning potential CPUC actions. The CPUC will allow parties to provide post-workshop comments on both the presentations and the staff straw proposal.
The CPUC is willing to accommodate short presentations (five minutes or less) or share prepared material pertinent to the workshop. Any party who wishes to do so may contact Michael Colvin at michael.colvin@cpuc.ca.gov. For reference (or inspiration), a series of energy storage presentations made to the CPUC as part of its 2011 IEPR process can be found here.
Stoel Rives attorneys Seth Hilton and Janet Jacobs will be attending the workshop.
FERC Seeks Comments on Ancillary Markets and Energy Storage
On June 16, 2011, the Federal Energy Regulatory Commission (FERC) issued a Notice of Inquiry (NOI) seeking comments on what it described as two separate but related issues, both of which apply to electric energy storage (EES).
First, because FERC is interested in facilitating the development of robust competitive markets to provide ancillary services from all resources types, it seeks comment on “existing restrictions on third-party provision of ancillary services, irrespective of the technologies used for such provision.” In soliciting these comments, FERC noted the growing interest in rate flexibility among sellers of ancillary services, and a desire from those obligated to purchase those services to increase the available supply. Although a variety of resources can provide ancillary services, FERC believes that many are discouraged from doing so by the Commission’s restrictions on market-based pricing coupled with a lack of access to information that could help satisfy the requirements of those policies. Access to information is particularly difficult outside of areas served by RTOs/ISOs, which areas are often with the greatest need for an ancillary services market.
FERC pointedly invites comments on whether it should revise or replace the restriction set forth in Avista Corp., 87 FERC ¶ 61,223, order on reh’g, 89 FERC ¶ 61,136 (1999), which prohibits, absent a study showing lack of market power, third-party market-based sales of ancillary services to transmission providers seeking to meet their ancillary services obligations under the Open Access Transmission Tariff (OATT). Assuming that FERC revises or replaces the Avista restriction to facilitate the provision of ancillary services, it also seeks input on how it should contemporaneously ensure just and reasonable rates. In a related inquiry, the Commission is seeking comments on whether the various cost-based compensation methods for frequency regulation that exist in regions outside of organized markets can be adjusted to address the speed and accuracy issues identified in FERC’s recent Frequency Regulation Notice of Proposed Rulemaking for organized wholesale energy markets. See Frequency Regulation Compensation in the Organized Wholesale Power Markets, 76 FR 11177 (March 1, 2011), Notice of Proposed Rulemaking, FERC States & Regs ¶ 32,672 (2011). The June 16 NOI, when considered in context with this year’s NOPR on Frequency Regulation and last year’s NOI on EES, could signal that a broader rulemaking regarding EES is on the horizon.
Recognizing that “the role of electric storage and other new market entrants play in competitive markets is still evolving,” the Commission seeks comments on whether it should revise “current accounting and reporting requirements as they pertain to the oversight of jurisdictional entities using electric storage technologies” other than pumped storage hydro (for which FERC has established methods of accounting, reporting and rate recovery). Current utility accounting requirements do not appropriately fit EES due to the technology’s abilities to act like generation, transmission, and distribution assets. Accordingly, FERC is soliciting “specific details regarding whether and, if so, how to amend the current accounting and reporting requirements to specifically account for and report energy storage operations and activities.”
The NOI was published in the Federal Register on June 22, 2011, and comments are due sixty (60) days from that date.
Thanks to my colleague Jason Johns for his comments on this posting!
California Public Utilities Commission Holds Prehearing Conference on Energy Storage Procurement Targets
As we’ve previously discussed, California’s AB 2514 requires the CPUC and municipal utilities in California to open proceedings by March 1, 2012 to determine appropriate targets, if any, for the procurement of viable and cost-effective energy storage systems by load-serving entities. Over a year before that deadline, the CPUC opened Rulemaking 10-12-007 in December of last year to both implement AB 2514 and “on [the CPUC’s] own motion to initiate policy for California utilities to consider the procurement of viable and cost effective storage systems.” In early March, the CPUC held an initial workshop on the scope of the rulemaking proceeding.
On April 21, the Commission held a prehearing conference to determine the scope and schedule for the proceeding. Stoel Rives partner Seth Hilton attended the conference. Among the issues discussed at the prehearing conference, led by Administrative Law Judge Yip-Kikugawa, was whether to conduct the proceeding in phases (e.g., first examining how storage might be applied, and then in a subsequent proceeding setting what the mandate will be for storage procurement), the issues to be covered in each phase , and whether evidentiary hearings would be necessary.
According to ALJ Yip-Kikugawa, a scoping memo should issue in the next two to three weeks. The scoping memo will set out the issues to be considered in the proceeding and a schedule for their resolution.
We'll be posting further information on Renewable + Law Blog when the scoping memo comes out, so stay tuned for further developments.
RFI for Substation-Size Li-ion Energy Storage System Demonstration Project
Electric Power Research Institute (EPRI) and Technology Transition Corporation recently issued a request for information (RFI) to prepare for multiple demonstrations and the market introduction of 1MW / 2MWh lithium ion battery energy storage systems (ESS) for electric utility grid management solutions. EPRI and TTC have assembled a utility team for this project, and they encourage manufacturers of Li-ion systems and energy storage system integrators to respond to the RFI. The utility team will evaluate the responses to determine which ESS suppliers should be invited to a 2-day utility-manufacturer workshop to be held in June 2011 to discuss the project’s technical specification and demonstration plans. The responses to the RFI will also influence the forthcoming Request for Proposals and the technical specification for approximately three demonstrations scheduled for 2012.
To be considered for participation in the proposed ESS project, including receipt of the resulting RFP in Q3 2011, responses must be received electronically, by 8 pm (20:00) Eastern Time, Monday, May 2, at storagespec@ttcorp.com. A detailed description of the RFI process and the RFI response form can be found on the Technology Transition Corporation's website, here.
Thanks to Emanuel Wagner, Project Coordinator for TTC, for bringing this RFI to my attention. According to Emanuel, this would be the first Li-ion storage project of this size in the US, if not the world.
Upcoming Electric Energy Storage (EES) Workshops
California’s AB 2514 requires the CPUC and municipal utilities in California to open proceedings by March 1, 2012 to determine appropriate targets, if any, for the procurement of viable and cost-effective energy storage systems by load-serving entities. By October 1, 2013, the CPUC must (1) determine whether a procurement target for energy storage is appropriate and, if so, (2) adopt a procurement target for each load-serving entity under its jurisdiction to be achieved by December 31, 2015 and a second target to be achieved by December 31, 2020. Municipal utilities have an additional year to meet these requirements.
In December of last year, the CPUC opened Rulemaking 10-12-007 both to implement AB 2514 and “on [the CPUC’s] own motion to initiate policy for California utilities to consider the procurement of viable and cost-effective energy storage systems.” Order Instituting Rulemaking (“OIR”) at 1, R.10-12-007.
On March 9, 2011, a workshop was held to address the scope of the rulemaking proceeding. The workshop included discussions of current and emerging energy storage technologies, the goals and applications of energy storage, existing barriers to storage implementation, and whether a unified storage policy would work or whether the policy should be written to address specific barriers to entry. The workshop also considered how the CPUC could and should work with other agencies addressing energy storage or related issues, including the California Energy Commission, the California Independent System Operator, and the Federal Energy Regulatory Commission. You can find Seth Hilton’s report about the March 9 workshop here.
The CPUC has scheduled a pre-hearing conference in the rulemaking proceeding for April 21, 2011. The conference will be held before ALJ Amy C. Yip-Kikugawa, beginning at 10 am, in the Commission Courtroom, State Office Building, 505 Van Ness Avenue, San Francisco, California. Stoel Rives partner Seth Hilton will attend the conference.
In addition, as part of its 2011 Integrated Energy Policy Report (IEPR) Schedule, the California Energy Commission has scheduled a committee workshop on energy storage for renewable integration, which will begin at 9:30 on April 28 in Hearing Room A, CALIFORNIA ENERGY COMMISSION, 1516 Ninth Street, First Floor, Sacramento, California. Stoel Rives attorneys are planning to attend the workshop.
A Unique RFP for Energy Storage
Santa Fe-based Chamisa Energy Corporation recently announced a request for proposals for up to 250MW of nameplate wind generation resources to be used to provide energy to a 135 MW or larger compressed air energy storage (CAES) facility under development in Swisher County in the Texas panhandle. The proposed CAES facility would compress air and store it in solution-mined underground caverns. To convert the stored potential energy back into electricity, the stored air would be released and mixed with a small amount of natural gas to drive a turbine. The RFP describes CAES as a "bulk electric storage technology used to complement wind energy generation so that wind energy becomes a fully dispatchable resource suitable for peaking, intermediate, baseload or tolling resource."
The energy would be provided to the facility pursuant to a power purchase agreement (PPA). Chamisa invites wind plants located either in the Southwest Power Power (SPP) or the Electric Reliability Council of Texas (ERCOT) to respond. Chamisa will consider proposals that supply wind energy for seven years, but prefers a minimum term of 15 years. The target date for delivering electricity to the Storage Facility is the second quarter of 2014.
Chamisa notes that it is not aware of completed or pending PPAs between WGR and CAES facilities, and thus anticipates that the successful proposal "will be creative in its approach to the RFP." Although the RFP isn't explicit on the point, Chamisa's plan may be to purchase energy from a wind generator or wind generators pursuant to the PPA, store the energy, and then sell the electricity and ancillary services from the facility to a third-party off-taker. If Chamisa can take the bulk of the energy into CAES primarily in off peak hours and then sell the stored energy during on-peak hours, might in theory be able to profit on the arbitrage between the two price points, although past efforts to get grid-scale storage to pencil out on that basis have had limited success. Alternatively, the facility may be able to profit by using the stored energy to provide ancillary services, grid congestion relief, grid stability and support for grid expansion.
In principle, the CAES facility could also be used in a tolling arrangement by which a utility or a seller of wind energy hires the CAES facility for storage, pays a reservation and storage charge to Chamisa, and then dispatches the stored energy at will--in other words, the third-party offtaker could be the same party as the generator delivering the wind energy to the facility (e.g., a utility that is buying wind energy that it wants to shift from off-peak hours to on-peak hours). Under this structure, the party tolling electricity would retain title to the electicity being stored and could arbitrage or otherwise deploy the stored energy into the market as it saw fit. However, a tolling transaction of that type isn't clearly called for by the RFP (although it doesn't appear to be precluded).
Regardless, Chamisa's RFP will be worth monitoring to see whether an independent storage developer can create a workable market structure for its storage assets in order to facilitate financing. The outcome of this effort will be of great interest to developers of solar and wind resources, as well as to developers of pumped storage and other grid-scale storage solutions.
The deadline for written or email questions is March 31, 2011, and proposals are due no later than 5pm Mountain Standard Time on May 16, 2011. If submitted by mail, proposal(s) must be postmarked May 16th. E-mail submission is preferred. You can access Chamisa's RFP by clicking here.
Come Learn What Every Renewable Energy Developer and Storage Provider Needs to Know About Integrating Variable Energy Resources
Wind & Solar Integration Summit, Scottsdale, AZ
January 24, 2011, 8 a.m. – 5 p.m., Workshop
January 25, 2011, 7 a.m. – 5:15 p.m., Conference
January 26, 2011, 9 a.m. – 11:45 a.m., Conference
As the Workshop Chair, I would like to extend you an invitation to the Wind & Solar Integration Summit, presented by Infocast. Join me and my colleagues in sunny Scottsdale, Arizona as we gather with industry experts—federal and state regulators, representatives from ISOs, independent power producers, and pioneers in energy storage—to discuss the challenges posed by renewable energy integration and the opportunities for businesses that make the necessary adjustments to prepare for the 21st century grid. We will be kicking off the conference with a keynote address by FERC Chairman, Jon Wellinghoff.
This 3-day event will include a pre-conference workshop on the fundamentals of integrating variable energy resources and electric energy storage (EES), and will feature a presentation by Stoel Rives partner and Conference Chair, Stephen Hall. The conference will address issues and recent developments in integration, including market solutions and investments to facilitate renewable energy integration, changes to the regulatory landscape, and the role of EES in enabling increased renewables integration. Stoel Rives partners Ed Einowski, Bill Holmes, and Jennifer Martin will present on managing the risks associated with curtailment and integration issues in PPAs.
In case you need another good excuse to get to Arizona in January, Stoel Rives is currently offering a discount on registration. For more event details and registration information, please see: http://www.stoel.com/showevent.aspx?Show=7277.
FERC Comments on Electric Storage Technologies Due August 9
Just a friendly reminder that the deadline to submit comments to the Federal Energy Regulatory Commission (“FERC”) on electric storage technologies is just around the corner. In its Request for Comments Regarding Rates, Accounting and Financial Reporting for New Electric Storage Technologies, FERC’s Office of Energy Policy and Innovation seeks comments on the following issues:
- The use of and rate treatment for storage facilities, including when it is appropriate to classify a storage facility as a transmission asset.
- The mechanisms by which a storage project that is used for multiple purposes may be compensated. Specifically, FERC seeks comment on whether a storage project may be compensated as transmission (e.g. for supporting unbundled transmission service by supplying reactive power) and also be compensated for providing ancillary services or for enhancing the value of merchant generation (e.g. by shifting output from an off-peak period to an on-peak period).
- The possibility of creating a stand-alone contract storage service and whether the storage provider would provide the service of electricity storage, enabling its customers to determine how to use their contracted share of the storage.
- Whether new accounting and reporting requirements should be created in order to facilitate cost of service or other rate policies for new storage technologies, such as chemical batteries and flywheels.
In addition to the issues outlined above and other specific questions posed by FERC in its Request for Comments, FERC invites comments on other related aspects of the storage issues not specifically addressed by FERC in the above-referenced document. Comments are due on Monday, August 9, 2010 and should reference Docket No. AD10-13-000.
CPUC Staff Issues White Paper on Electric Energy Storage (EES)
Energy Electricty Storage (EES) is likely to become more and more important as intermittent solar and wind energy resources penetrate the grid. EES may be a very useful and perhaps essential way to manage the variability of intermittent renewable energy resources to allow developers to continue building wind and solar projects at an accelerating pace.
On July 9, 2010, the Policy and Planning Division of the California Public Utility Commission (CPUC) issued an interesting Staff White Paper entitled "Electric Energy Storage: An Assessment of Potential Barriers and Opportunities." The report is worth reading for those who are interested in the future of renewable energy and the roll that EES can play in enhancing the deployment of intermittent renewables.
The report describes "a promising new set of Electric Energy Storage ("EES") technologies [that] appear to provide an effective means for addressing the growing problems of reliance on an increasing percentage of intermittent renewable generation resources." The report observes that EES can provide several basice services, such as (1) supplying peak electricity demand by using electricity generated during periods of lower demand (e.g., storage of wind energy generated at night for use during daily peak periods), (2) balancing electricity supply and demand fluctuations over a period of minutes, and (3) deferring expansion of electric grid capacity (including generation, transmission and distribution).
Potential storage technologies include pumped hydro, compressed air energy storage ("CAES"), batteries, thermal storage (e.g., solar thermal plants), flywheels, unltracapacitors and superconducting magnetic storage--the report provides short but helpful description of each technology. Storage presents interesting legal and policy issues, because "[r]egulators are uncertain how EES technologies should fit into the electric system, in part because EES services provide multiple services such as generation, transmission and distribution." In addition, "regulators do not yet know how EES costs and benefits should be allocated among these three main elements of the electric system."
The report makes a number of recommendations, including that the CPUC should conduct a rulemaking to develop policies to remove barriers to the deployment of EES technology in California. The report also proposes that the CPUC consider placing EES within California's energy resources loading order, require utilities to incoporate EES into their integrated resource planning processes, encourage CAISO to change ancillary service market rules to allow EES systems to more easily bid into regulation markets, and integrate EES into utility transmission planning.
The report concludes that "the major barrier for deployment of new storage facilities is not necessarily the technology, but the absence of appropriate regulations and market mechanisms that properly recognize the value of the storage resource and financially comepnsate the owners/operators for the services and benefits they provide."
You can find the report here.
CPUC Staff Issues White Paper on Electric Energy Storage (EES)
Energy Electricty Storage (EES) is likely to become more and more important as intermittent solar and wind energy resources penetrate the grid. EES may be a very useful and perhaps essential way to manage the variability of intermittent renewable energy resources to allow developers to continue building wind and solar projects at an accelerating pace.
On July 9, 2010, the Policy and Planning Division of the California Public Utility Commission (CPUC) issued an interesting Staff White Paper entitled "Electric Energy Storage: An Assessment of Potential Barriers and Opportunities." The report is worth reading for those who are interested in the future of renewable energy and the roll that EES can play in enhancing the deployment of intermittent renewables.
The report describes "a promising new set of Electric Energy Storage ("EES") technologies [that] appear to provide an effective means for addressing the growing problems of reliance on an increasing percentage of intermittent renewable generation resources." The report observes that EES can provide several basice services, such as (1) supplying peak electricity demand by using electricity generated during periods of lower demand (e.g., storage of wind energy generated at night for use during daily peak periods), (2) balancing electricity supply and demand fluctuations over a period of minutes, and (3) deferring expansion of electric grid capacity (including generation, transmission and distribution).
Potential storage technologies include pumped hydro, compressed air energy storage ("CAES"), batteries, thermal storage (e.g., solar thermal plants), flywheels, unltracapacitors and superconducting magnetic storage--the report provides short but helpful description of each technology. Storage presents interesting legal and policy issues, because "[r]egulators are uncertain how EES technologies should fit into the electric system, in part because EES services provide multiple services such as generation, transmission and distribution." In addition, "regulators do not yet know how EES costs and benefits should be allocated among these three main elements of the electric system."
The report makes a number of recommendations, including that the CPUC should conduct a rulemaking to develop policies to remove barriers to the deployment of EES technology in California. The report also proposes that the CPUC consider placing EES within California's energy resources loading order, require utilities to incoporate EES into their integrated resource planning processes, encourage CAISO to change ancillary service market rules to allow EES systems to more easily bid into regulation markets, and integrate EES into utility transmission planning.
The report concludes that "the major barrier for deployment of new storage facilities is not necessarily the technology, but the absence of appropriate regulations and market mechanisms that properly recognize the value of the storage resource and financially comepnsate the owners/operators for the services and benefits they provide."
You can find the report here.
