California's unique energy storage plan could change utilities

Dana Hull / San Jose Mercury News /

Published Oct 18, 2013 at 05:00AM

SAN JOSE, Calif. — In a bold move being closely watched by utilities, environmentalists and the clean technology industry, California adopted the nation’s first energy storage mandate for utilities Thursday.

State regulators with the California Public Utilities Commission, meeting in Redding, Calif., unanimously approved Commissioner Carla Peterman’s groundbreaking proposal, requiring PG&E, Southern California Edison and San Diego Gas & Electric to begin expanding the capacity to store electricity, including renewable energy generated from solar and wind.

“The decision lays out an energy storage procurement policy guided by three principals: optimization of the grid, integration of renewable energy and reduction of greenhouse gas emissions,” said Peterman, who was appointed to the agency by Gov. Jerry Brown in 2012.

The state’s three investor-owned utilities must collectively buy 1.3 gigawatts, or 1,325 megawatts, of energy storage capacity by the end of 2020 — or roughly enough energy to supply about 1 million homes.

The ambitious 1.3 gigawatts is a capacity target, because different storage technologies have different rates at which they can accept and discharge energy, and the mandate aims to be technology neutral.

“Storage really is the game changer in the electric industry. And while this new policy is not without risk, the potential rewards are enormous,” said Commissioner Mike Florio, widely seen as the strongest consumer advocate on the five-member commission.

Florio also praised Peterman for bringing the ambitious energy storage proposal forward. “It seems like here in California, behind every groundbreaking energy policy is a visionary woman.”

California’s Renewable Portfolio Standard law, which requires utilities to get 33 percent of their electricity from renewable sources like solar and wind, is widely credited with accelerating California’s clean tech economy.

Thursday’s decision to mandate energy storage is expected to spur innovation in emerging storage technologies — from batteries to flywheels. The full impact on household utility bills, however, won’t be known until after the procurement process begins. Utilities must begin buying a combined 200 megawatts of energy storage technology by 2014.

“This decision comes at the perfect moment; as the state plans for the replacement of the San Onofre Nuclear Generating Station,” said Evan Gillespie, of the Sierra Club. “Today’s decision will spark new ideas and storage methods that can move us out of a destructive energy system and into a safe, healthy, and efficient system of renewable energy.”