Energy storage is the new frontier in renewable power. More applications for Self Generation Incentive Program funding for energy-storage projects were filed in the last three months — 9,527 kilowatts of capacity in SDG&E territory— than the last two years combined, and the industry is expected to experience huge growth in the next five years.
“This is not an April Fool’s joke; this is real,” said Vic Shao, CEO of Green Charge Networks.
“Energy storage, over the course of the next five years, is going to grow at an annual compound rate of 65 percent per year, meaning that the industry is going to grow 10 times in five years, where the solar figure is somewhere around 8.3 percent."
Why renewable energy storage is important, how it’s being accomplished and how it’s funded were the topics of a CleanTech San Diego panel Wednesday held at San Diego Gas & Electric’s double-LEED platinum Energy Innovation Center.
Storage is becoming increasingly necessary as a greater share of energy is sourced from solar, wind or thermal. In San Diego, SDG&E sources 32 percent of all power from renewables.
The problem is, renewable sources don’t match up with user demand. Solar power is generated in the middle of the day, but peak electricity use is in the morning and evening, when not much solar can be generated.
Renewable sources are also often distant from the areas needing power. For example, 80 percent of California’s load is close to the coast, while solar and wind generation are further inland.
“This has created the opportunity we’re talking about today — that’s storage,” said Jim Avery, executive vice president of power supply for SDG&E.
“The opportunity to take this energy coming in the middle of the day and hold that energy for when the system needs it at the end of the day — this is the big opportunity.”
There are several existing solutions for storing and transmitting energy, and several ideas in research. Batteries tend to get the most play — and with the cost of lithium-ion batteries in particular on the decline, their use is increasing — but there are also pumped-hydro, thermal and flywheel storage possibilities.
Rick Azer, director of development and smart integrated infrastructure at Black and Veatch, said the firm is working with the San Diego County Water Authority and the city of San Diego on the conceptual design of a pumped-hydro storage system on San Vicente Reservoir. It would act as a battery to pump water up to a reservoir when energy costs are low, and then release that water — which is turned into electricity — during demand peaks, when more generation is needed.
The University of California San Diego has several major projects in the works, including one of the world’s first energy-storage systems using second-life electric vehicle batteries, some several-megawatt ultracapacitor projects, thermal energy storage and flywheel storage capabilities in a test phase.
William Torre, program director of energy-storage systems at UCSD, said the university was just awarded a $3.5 million contract from the U.S. Department of Energy’s Advanced Research Projects Agency-Energy to establish an advanced energy-storage center for the West Coast.
“They’re going to test all their advanced energy storage,” Torre said. “New batteries, new technologies they’re building will pass through UCSD’s new center for energy-storage testing.
“We’re really happy about that. We just had the first review meeting yesterday, and we’re going to be testing all the latest and greatest methods of storage.”
Earning grants is one way to fund projects but, for private companies, developers or citizens, that isn’t always an option.
The Center for Sustainable Energy’s Self-Generation Incentive Program (SGIP) provides an additional opportunity, though the unprecedented growth in energy storage means 2015’s allotted funds have mostly been spoken for, just three months into the year.
Rebecca Feuerlicht, project manager for the SGIP program, said the program pays $1.46 per watt over two hours for energy storage projects — mostly lithium-ion batteries at the moment —ranging from small residential to large 30-kilowatt industrial systems.
“Over 95 percent of projects this year have been storage projects and are likely to be installed in the next couple of years,” Feuerlicht said.
“This is really an unprecedented shift. … We opened up our program three months ago with an incentive budget of $95 million. In the last three months, most of that money has been spoken for.”
She said this is reminiscent of the early 2000s, when solar programs dominated SGIP funding requests, eventually getting their own incentive program within the Center for Sustainable Energy.
“Ten years later we’re seeing the same trend happen for energy storage,” she said. “It shows how SGIP helped to jumpstart the solar industry, and now solar, in many ways, is helping to accelerate the growth of energy storage.”
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