The drama and intrigue of a long-duration storage bill in California


On the surface, California bill AB 2255 aims to develop a process to procure and deploy gigawatts of long-duration energy storage across the state. The bill proposes adopting a new regulatory approach in order to unleash long-term energy storage resources and meet California’s climate goals.

While the wording of the bill seems neutral, the bill is actually sponsored by out-of-state utility NextEra Energy in an effort to revive a pumped-hydro project and build two reservoirs near the environmentally sensitive Joshua Tree National Park, according to opponents of the bill.

AB 2255

The bill, entered by Assemblymember Susan Eggman (D-Stockton), defines “long-duration energy storage system” as “an electrolyzer or an energy storage system…interconnected to the electrical grid that has the capability to continuously discharge at its full discharge capacity for at least eight hours, including both energy storage systems designed to complete a full charge and discharge cycle within a single day and those designed to do so over multiple days.”

According to modeling by the California Public Utilities Commission (CPUC) — as much as 70 GW of energy storage will be needed to achieve the state’s goal of 100% renewable and zero-carbon electricity resources by 2045. The CPUC also determined that “all storage needed beyond 2030 will have to have discharge for durations of six to eight hours or longer.”

The bill cites numerous long-duration energy storage technologies including electrochemical, compressed air, pumped hydroelectric, flow batteries, electrolytic and renewable hydrogen, and other chemical, mechanical, gravity-based, and thermal energy storage technologies.

In 2013, the California PUC imposed a 1,325-MW energy storage procurement mandate by 2020. And while today’s electrochemical energy storage landscape is absolutely dominated by lithium-ion batteries geared for four-hour duration, the CPUC found that “the reliability capacity contribution of shorter four-hour duration storage systems declines significantly over time.”

The bill suggests, “Given the needs and barriers to development of long-duration energy storage, a different procurement approach may be required for long-duration energy storage in order to meet 2030 needs.”

As part of this new approach to procurement, the bill would have California’s Independent System Operator (CAISO) “take steps necessary to enable development of the amount of long-duration energy storage systems…and to develop, pursuant to a public process, a competitive solicitation process and operational and cost-recovery mechanisms to enable the development of long-duration energy storage systems.”

A “one-off legislative fiat”

A letter from environmental organizations, public owned utilities and farmers to representatives in the California legislature in opposition to the NextEra Energy-sponsored bill argued that this “one-off legislative fiat” is not necessary to meet California’s emissions goals, especially when regulators already included pumped-storage hydropower in their integrated resource planning. The coalition claimed that the bill would only benefit NextEra Energy’s pumped hydro project.

“For the last three years, people have unsuccessfully tried to ram a bill through the Legislature that would force California utility ratepayers to pony up billions of dollars to bail out the Eagle Crest pumped storage project, an unnecessary hydroelectric project proposed in the middle of the California Desert,” according to local news source, The Desert Sun.

A U.S.-based grid-balancing professional provided a comment: “We have a considerable amount of pumped hydro in California that’s barely being used at the moment. We also have considerable export/import opportunities with our neighbors and day-ahead planning opportunities that have yet to be fully explored. We don’t need an expensive multi-billion dollar hardware solution here. It would cost a few tens of millions to set up day-ahead markets in WECC.”

Eggman’s office told the media that the bill is a technology-agnostic appraisal of energy storage — and not intended to promote the NextEra project.

The bill remains in committee.

Community Choice Aggregators go long duration

While the fight over AB 2255 continues, eight Californian community-choice aggregators (CCAs), led by Silicon Valley Clean Energy along with Central Coast Community Energy, CleanPowerSF, Marin Clean Energy, Peninsula Clean Energy, Redwood Coast Energy Authority, San Jose Clean Energy, Silicon Valley Clean Energy, and Sonoma Clean Power have issued a request for offers (RFO).

The coalition is looking for 500 MW of long-duration storage capacity with a minimum of 8 hours of discharge duration that will be ready to be commissioned by 2026. Individual projects must furnish a minimum of 50 MW of power capacity. The eight CCAs have a combined peak load of 5.4 GW.

This an instance where load serving entities like CCAs are taking long-duration energy storage planning into their own hands and not waiting for cues from CAISO or the CPUC.

Picking winners and losers?

Long-duration storage fits in with what utilities, independent system operators, and regional transmission operators understand. “Most utilities seem to want much longer-duration storage systems, with 6 to 12 hours discharge, to do serious load-shaping over the day,” suggests an analyst at a U.S. energy think tank. Some of these expectations are being driven by the performance of pumped hydro, once the only source of grid-connected storage.

Economically viable long-duration energy storage could accelerate solar and wind penetration, grid resiliency, and serve to stabilize volatile energy prices.

But, long-duration energy storage will not become pervasive until regulators adapt to the capabilities of the technology.

The California Wind Energy Association believes it would “be counter-productive for the legislature to inject the CAISO into the planning process at this time, in a way that is inconsistent with the CPUC’s activities.”

Bernadette Del Chiaro, executive director of the California Solar & Storage Association notes, “We were neutral this past year because they did make some changes to the bill to make it a little less horrible compared to previous years. However, this was as much a political and bandwidth decision as it was policy. Generally, we think this form of policy making – picking winners and losers in something as complex as energy markets in California – is a really bad idea.”

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