Dive Brief:
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Energy storage will be an important part of Duke Energy and Southern California Edison's broader shift toward their clean energy goals, utility executives said at the ESA Energy Storage Annual Conference & Expo on Wednesday. But driving down the cost curve on technology, particularly long-duration storage technologies, will be key.
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"That comes with continued R&D, continued investment, continued commercial applications, learning and putting it to good use," said Douglas Esamann, executive vice president of energy solutions at Duke Energy.
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At the same time, more players are turning to storage as a resiliency play, but they face challenges on this front, including a lack of standardization in the industry around monetizing and putting a value on resiliency, experts said at the conference.
Dive Insight:
Last year, Duke Energy committed to achieving net-zero carbon emissions from electric generation by 2050, as well as halving its emissions by the end of this decade. And California is working towards a 100% zero-carbon electricity system by 2045.
SCE's analysis indicates a need for over 50 GW of front-of-meter storage by 2045, said Carla Peterman, the utility's senior vice president of strategy and regulatory affairs and former commissioner at the California Public Utilities Commission, as well as 10 GW of behind-the-meter storage.
"Long-duration storage from other chemistries beside lithium-ion will become especially important to replace natural gas plants as they exit the system," Peterman added.
Earlier this year, SCE announced its intention to procure a 770 MW/3,080 MWh package of battery resources to support grid reliability and address potential energy shortfalls in the state. Those projects will assist in integrating renewables onto the grid, as well as allow California to transition its energy profile as several large coastal once-through-cooling plants are scheduled to retire in the next three years, Peterman said.
Duke, meanwhile, has so far mostly incorporated storage through demonstration projects, according to Esamann, although it does have a history with pumped hydro storage.
"The cost of batteries and storage coming down continue to make it more and more of an option within our resource plans and more and more of an opportunity for us to incorporate storage into our planning system," Esamann said.
One of the scenarios that Duke ran while planning for its carbon goals, that did not include any investment in future gas assets, indicated that the utility would need to invest in 40,000 MW of wind and solar assets by 2050, as well as 15,000 MW of storage, Esamann said.
"To put that in perspective, that's 17 times what's installed in the US today, and that will be on our system alone," Esamann added.
From a developer standpoint, expediting utility storage deployments really comes down to building an economic case for storage for regulators and others, according to Esamann.
"Obviously as the cost of storage technologies continues to come down and the uses continue to get more prevalent, I think what you'll see is the economic analysis favors it much, much more going forward," Esamann added.
California, however, faces a different situation. Around 2,700 MW of natural gas has come off the state's system since 2017, Peterman said, and so utilities are focusing on adding storage quickly to help support grid reliability. Last summer, the CPUC ordered 3,300 MW of new procurement, and "we're meeting a significant share of that with energy storage," Peterman said.
"I think for us … the issue would be can you meet these deadlines, can you build these projects on a quick expedited timeframe? It's going to be important for our state to provide as much lead time as possible in terms of the procurement needs," Peterman added.
Storage for resilience: industry dogged by question of quantifying value
SCE — like other utilities — is also turning to storage for resiliency benefits, including in areas of California prone to wildfires, Peterman said.
But here, too, the industry faces challenges. These boil down to three buckets — quantifying the value of resilience, creating incentives and encouraging transparency, Andrew Foukal, CEO of East Point Energy, said at the conference on Tuesday.
"[T]he challenge of actually quantifying the value of resilience has been one that has dogged this industry for a while," Foukal said.
Duke Energy has also been utilizing storage resources to bolster resiliency. Last year, the utility helped build a storage project at a South Carolina facility used as a hurricane evacuation shelter and during other emergency situations. And this week it announced plans to build a 3.5 MW solar-plus-storage microgrid at a Florida school, which also serves as a hurricane evacuation center.
But projects like these aren't just for backup, Zachary Kuznar, managing director, CHP, Energy Storage and Microgrid Development, Duke Energy, said. They also provide some sort of bulk system benefit.
"I think that's the key, is how we balance the bulk system value with the backup power. And that really lets us maximize the use of the facility so they're not sitting there waiting for a grid outage," Kuznar added.
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Duke, SCE eye more storage, but continued cost declines, resilience valuation are key, executives say - Utility Dive
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