Carla Peterman, a commissioner with the California Public Utilities Commission, said that among the many takeaways for regulators from California's experience with energy storage deployment is the importance of setting targets.
Peterman made her remarks at an Energy Storage Policy Forum in Washington, DC, which was hosted by the Energy Storage Association and held on Feb. 15.
She said that setting energy storage targets is important because such a move sends a signal to the market and to utilities.
"I think that's been a real measure of success, that we've seen so much procurement happen outside of the target RFOs [requests for offers]" issued by the state's investor-owned utilities, Peterman said in her remarks at the ESA event.
Another key takeaway that regulators should consider? Start early, said Peterman. "Getting buy in to the procurement framework takes time and actually getting the procurement done takes time," she said.
Peterman also said that regulators should allow for flexibility as the market develops. The CPUC commissioner said that "this is a new area," which means it is important to have regular reviews and "be willing to change course."
A tremendous amount of growth
She said that from 2000 to 2013, California developed 25 megawatts of energy storage. "Since we've adopted targets for energy storage," over the last three years, "we've now approved 630 megawatts of energy storage. That's a tremendous amount of growth," Peterman said.
"You're looking at a 200 percent increase year over year in the last three years," she said.
Peterman said that the state's 1.325 gigawatt by 2020 storage target "is the cornerstone of our energy storage work." As a part of that target, "we set up a broader procurement framework, which has been useful in terms of evaluating storage, and enabling us to procure storage even outside of that framework."
But it began with legislation, she pointed out, which "simply said, ‘PUC, look at this issue, consider setting targets, but if you do set targets, make sure that energy storage is viable and cost effective.'"
Peterman told the ESA gathering that as "you're thinking about doing this work in other states, I can't say enough how important the various stakeholder forums we had were in terms of deciding whether to develop targets."
As the commission moved forward, it eventually proposed a target that includes targets for transmission-connected storage, distribution-connected storage and customer-side storage. There are biennial storage solicitations in California.
"Some of the specific elements that were important to me in crafting a framework were to make sure that we allow for competition, that we had methods for cost containment, that we allowed opportunities for technology diversity and for utility involvement," the state utility regulator said.
Peterman noted that "we've completed one RFO round, the 2014 RFOs, we've just approved those contracts." She said that the commission approved nearly 88 MW of storage procurement from the 2014 RFOs.
"In terms of who won the 2014 RFOs, we see projects that include lithium ion batteries, zinc air batteries and flywheels," she said.
Peterman said that with respect to what is expected from the 2016 procurement cycle, "again, the utilities are interested in transmission, distribution, and customer side projects — third party and utility owned. Each utility has a different approach and we want to foster and encourage that."
Storage procurements address nuclear plant closure, gas facility going offline
Peterman also highlighted two examples of storage procurements in the state that were not motivated by the broader targets.
One example is tied to the closure of the San Onofre nuclear power plant, she noted. As part of its strategy to replace capacity lost with the closure of that plant, the commission required utilities to acquire at least 50 megawatts of storage to meet that need and the utilities wound up procuring more than 260 MW, she said.
"Ultimately, 23 energy storage contracts were signed for that procurement," she said.
More recently, storage has helped to address the grid impacts from the closure of the Aliso Canyon gas storage facility, Peterman said.
"We were able to do that procurement from beginning to end in nine months," she said, adding that this would "not have been possible without the work that had been done on the framework."
Peterman was appointed to the CPUC by California Gov. Jerry Brown in 2012. She is the PUC's assigned commissioner for a number of proceedings including energy storage.
Los Angeles Department of Water and Power General Manager David Wright on Jan. 31 outlined steps that LADWP is taking to achieve its goal of reaching 178 megawatts of energy storage by 2021.
Massachusetts pursuing storage procurement targets
Meanwhile, Massachusetts is moving forward with plans to set storage procurement targets.
Investor-owned utilities, various trade associations and the state's attorney general's office recently weighed in on plans by Massachusetts regulators to set energy storage procurement targets by this summer.
The comments were filed in late January with the Massachusetts Department of Energy Resources, and posted on the DOER's website earlier this month.
The DOER recently determined that it is prudent for the state to set targets for energy storage systems.