The “Storage Week 2015″ summit held in San Diego, CA this week brought together policymakers, regulators, electric utility executives, system vendors, consultants, and other stakeholders to discuss the remarkable progress made in the last few years to deploy and integrate energy storage technologies.  The 8th annual event provided insights and practical advice regarding applications ranging from large-scale, grid-connected energy storage projects, to distribution level and behind-the-meter storage opportunities.  Noteworthy from the beginning of the conference was the fact that a significant percentage of the attendees were project developers and financiers which suggests that the energy storage sector is finally moving away from conceptual discussions and into actual deployment.

Much of the discussion at the conference focused on the efforts to integrate energy storage in organized electricity markets from New York to Texas to California.  Representatives from ISOs, RTOs, utilities, and project developers provided an overview of the progress that has been made in these parts of the country, lessons learned to date, and insights into the continuing evolution and deployment of energy storage.

Given both the location of the conference and recent regulatory and industry developments, energy storage in California figured prominently in the discussion.  California PUC (CPUC) Commissioner Carla Peterman provided the keynote address and discussed the progress made since passage of AB 2514 in 2010 which required the CPUC to adopt energy storage system procurement targets for certain California electric utilities.  Comr. Peterman and many other speakers discussed the market dynamics and industry response associated with the CPUC’s 2013 decision requiring the state’s utilities to work toward acquiring 1.325 GW of transmission-connected, distribution-connected, and behind-the-meter energy storage resources.  These policy-driven changes have enabled California and its utilities and consumers to begin to develop valuable experience with energy storage technologies, contractual arrangements, and regulatory approaches.  Representatives from the CPUC, the California independent system operator (CAISO), utilities, and project developers all emphasized that flexibility is the key at this early stage.  Further developments in California will be guided by this experience as well as CAISO’s Energy Storage Roadmap which focuses on increasing revenue opportunities for energy storage, reducing interconnection costs, and streamlining regulatory processes to improve certainty for energy storage providers and users.

Two key themes emerged throughout the various conference presentations and discussions.

First, the success of energy storage will depend largely on the development of regulatory and market approaches that recognize and reward the multiple benefits that energy storage technologies can provide.  Energy storage can be both a generation asset and a transmission asset.  It can provide grid balancing and stability through power supply management, frequency regulation, and voltage stability.  It can provide demand response and load reduction benefits.  Regulations should accommodate the multi-purpose nature of energy storage.  As one speaker commented, “Regulation should not stand in the way of innovation.”

Second, technology and industry developments will continue to create new opportunities for energy storage.  Declining prices for both renewable energy and energy storage technologies, a changing generation mix due to coal plant retirements and natural gas-fired replacements, and fundamental changes that are driving the utility-customer relationship from the provision of a commodity (i.e., kWh) to the complex, interactive “internet of energy” — these and numerous other factors align well with the multiple roles energy storage can play.

With few exceptions, there was little discussion of the role of and opportunities for energy storage outside of organized markets, particularly in the western United States outside of CAISO.  While the dynamics of organized markets don’t exist in many western states, many of the same operational realities do.  For example, western utilities struggle with the same challenges associated with integrating renewable resources and the now famous (or infamous) “duck curve” – two challenges well-suited for energy storage solutions.

This raises the question, “What is the future of energy storage in the western U.S.  outside of organized markets?”  Will the traditionally fiercely independent West chart its own, unique course for energy storage on a state-by-state basis?  Will western states pursue some form of regional cooperation that facilitates deployment of energy storage?  Or will energy storage continue to evolve in these states on a voluntary, utility-by-utility basis as it essentially has to date?  Whichever course is followed, western states and utilities can take advantage of the learning curve and experiences gained by their colleagues in the organized markets to determine what approach to energy storage will work best for the west and its wide-open spaces.