Governor’s Signature Could Help Propel Energy Storage Market to $35 Billion
In a state where the legislature is dysfunctional and often prefers to legislate through the initiative process, California lawmakers passed the California Energy Storage Bill – AB 2514.
The bill requires the Public Utilities Commission to set targets for systems that store energy. Such systems are regarded as important for the efficient operation of an electrical grid with high proportion of renewable energy sources like solar and wind. The state’s renewable portfolio standard is currently 20% by 2010, with legislation to increase that to 33% by 2020. Analogous to TIVO’s time-shifting features, energy storage allows users to consume energy generated during non-peak hours. The bill is sitting on Governor Schwarzenegger’s desk and he has until September 30 to sign or veto it. If he chooses not to act, it becomes law.
According to Pike Research, the sale of energy storage technology generates $1.5 billion in annual revenues. This market could become a $35 billion business by 2020, bolstered by more wind and solar farms coming online. Additional technological developments positively affecting the storage market includes the roll out of plug-in hybrid and electric vehicles, and the deployment of smart grid technology.
The AB 2514 roll-out schedule includes:
- March 1, 2012: CPUC to open rule-making proceeding
- October 1, 2013: Adopt energy storage system procurement target for load-serving entities
- October 1, 2014: Adopt target for publicly owned utilities
- December 31, 2015: Achieve target (load-serving)
- December 31, 2016: Achieve target (publicly owned utility)
- December 31, 2020: Achieve second target (load serving)
- December 31, 2021: Achieve second target (publicly owned utility)
Energy storage is expected to benefit many constituents. According to the California Energy Storage Alliance, it creates value for multiple stakeholders:
- Customers: reduced energy and demand costs, emergency backup, demand response, improved reliability
- Utilities: load leveling, T&D relief/deferral, improved power quality, reduced peak generation and spinning reserve needs
- System Operators: ancillary services, grid integration, improved grid reliability and security
- Society: more renewables, fewer emissions, healthier climate, more jobs
Sign the bill, Governor Schwarzenegger, and let’s get started.
