LegiStorm

Summary:

Electricity, as it is currently produced, is largely a commodity resource that is interchangeable with electricity from any other source. Since opportunities for the large-scale storage of electricity are few, it is essentially a just-in-time resource, produced as needed to meet the demand of electricity-consuming customers. Climate change mitigation has increased the focus on the use of renewable electricity. While energy storage is seen as an enabling technology with the potential to reduce the intermittency and variability of wind and solar resources, energy storage resources would have to be charged by low- or zero-emission or renewable sources of electricity to ensure a reduction of greenhouse gases. Energy storage is being increasingly investigated for its potential to provide significant benefits to the interstate transmission grid, and perhaps to local distribution systems and thus to retail electric customers. The ability to store energy presents an opportunity to add flexibility in how electricity is produced and used, and provides an alternative to address peak loads on the system using renewable electricity stored at low-demand times. In addition to providing power on demand, energy storage technologies have the potential to provide ancillary services to the electricity grid to ensure the reliability and stability of the power system, and better match generation to demand for electricity. Hydropower pumped storage (HPS), compressed air energy storage, and cryogenic energy storage are examples of technologies that store potential (or kinetic) energy. These are examples of the mostly large, monolithic systems used for energy storage today do not store electricity directly, but provide a means of producing electricity by use of a stored medium (e.g., water or air). According to the Federal Energy Regulatory Commission (FERC), approximately 24 HPS systems are currently operating with a total installed capacity of over 16.5 Gigawatts. HPS is approximately 94% of existing U.S. energy storage capacity. Since the storage of potential energy systems is well established on the grid, this report focuses on the relatively new use of modular batteries for grid level storage. Modular battery technologies generally store electrical energy in chemical media that can be converted to electricity, and consist of standardized individual cells with relatively small power and voltage capacities that are typically aggregated to serve larger power loads. Lead-acid batteries and lithium ion (Li Ion) cells are the most used modular battery technologies for utility scale (i.e., projects of one megawatt or greater in capacity) applications on the electric grid. Li Ion cells are being used for a variety of applications, due largely to their high energy density and ability to undergo a number of full power charging cycles. However, battery technologies, in general, can provide energy for only a few hours, and vary with regard to the time required to recharge battery systems. Procurement of cobalt for Li Ion batteries has also been controversial due to child labor and safety concerns in many Congolese artisanal mines. While Li Ion battery systems are currently the most prevalent form of modular storage, and a key technology for electric vehicles, several issues exist with system cost, materials used, and the safety of these systems. Congress may want to direct further research into modular battery system materials and charging technologies to reduce the cost, improve the safety of systems, increase system performance and cycle efficiency, and to assure the sustainable development of modular battery systems. Congress may also want to look at providing guidance for policy regimes or incentives that promote energy storage in a manner that can decrease greenhouse gas emissions. FERC acknowledged that existing market rules for traditional resources can create barriers to entry for emerging technologies, and energy storage in particular. FERC designed its Order No. 841 to require "each regional grid operator to revise its tariff to establish a participation model for electric storage resources that consist of market rules that properly recognize the physical and operational characteristics of electric storage resources."