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Energy storage policy issues

Addressing barriers to adoption of storage by the electric energy industry

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In the US, DNV GL has been actively engaged in the grid-scale energy storage policy dialog. We are providing insight into specific storage application cases and methodologies for determining their cost-benefits. We have identified policy issues that improve the case and overall cost-benefit. And we have identified how related trends in energy—RPS standards, smart grid, micro grids—all link to, and benefit from, the inclusion of storage in grid design and operation.

Energy storage offers benefits by “time shifting” electricity – allowing it to be produced at one time for consumption at another. Emerging energy storage technologies can have different applications within the electric grid system, delivering a number of different benefits in combination.

Policy questions arise in various forms depending on the context of where and how storage is being used -- T&D owner / operator, wind farm operator, merchant storage provider and community storage.

Energy storage policy questions
Beyond the technical and economic hurdles that a new technology in a new application has to overcome, there are a number of policy issues and potential policy actions worth considering.

The nature of storage blurs the separation between one value chain position from another for purposes of regulatory treatment, market participation, and allowed business application. Most incentive, cost recovery, market regulation, and tariff decisions classify assets narrowly into the familiar spaces of generation, transmission, distribution, and consumer.

Addressing electricity storage policy questions hinges, in part, on defining a new asset class. Possible solutions to the storage policy questions include investment tax credits, new cost recovery models and creating a favorable environment to bring distributed / community applications of storage to market.

DNV GL Congressional testimony, briefings and reports on storage
In 2010, DNV GL analyzed and prepared a report for the Energy Storage Association on the benefits associated with energy storage legislation currently pending consideration in Congress. In 2009, DNV GL testified on grid-scale energy storage before the full US Senate Committee on Energy and Natural Resources, and participated along with MIT in an IEEE and ASME sponsored briefing at the US Congress on electricity storage policy issues.

  • Assessment of Jobs Benefits from Storage Legislation (April 2010): DNV GL analysis investigated the incentives from the STORAGE Act of 2009 (S. 1091), which includes a 20 percent energy investment credit for grid-connected energy storage and a 30 percent energy investment credit for onsite energy storage through 2020. The analysis predicted only the number of direct jobs created by the incentive and not the number of jobs created in the supply chain. The report also identified additional benefits of increasing penetration of advanced energy storage including helping to mitigate climate change and acting as a tool for demand response.
    Download the executive summary at right.
  • Testimony before the full U.S. Senate Energy and Natural resources Committee (December 10, 2009): DNV GL provided an overview of what storage is and how it relates to the electricity industry, including potential benefits of storage and current barriers; discussed storage’s role in the electricity system; offered an overview of storage technologies and applications; and discussed policy issues to consider regarding storage. View the Senate Energy Committee webcast.
  • Briefing of the US Congress (July 16, 2009): DNV GL briefed the US Congress on policy issues impacting the development and adoption of electricity storage technologies and applications. DNV GL was one of two speakers presenting at the “Road to the New Energy Economy” congressional briefing series sponsored by the National Science Foundation (NSF), Discover Magazine, the Institute of Electrical and Electronics Engineers (IEEE), and the American Society of Mechanical Engineers (ASME). View Discover Magazine's blog.

DNV GL’s testimony before the US Senate Energy Committee and the “Electricity storage policy issues” Congressional briefing paper are available for download on the right.