Track: C4. Policy Perspectives on Accelerating Carbon Emission Reduction
Background/Objectives
Current electric grid planning and procurement processes operate on short-term cycles that operate on horizons of three years or less. This complicates the ability of emerging technologies like long-duration energy storage (LDES) to compete in these processes, as their expected commercial viability is beyond the procurement horizon. As a result, the industry narrative around LDES tends to be along the lines of "It would be nice to have" or "We will invest it in it when it's ready." At the same time, however, aggressive grid decarbonization efforts are creating a growing imperative for LDES technologies to maintain a reliable, least-cost, and clean power system. Most LDES technologies, however, are in a nascent state, and will require additional investment to scale up and achieve commercialization. Current procurement cycles do not send long-term investment signals, which means that by the time a short-term procurement cycle identifies the need for LDES, technology likely will not be ready within the desired time frame. The objective of this work is to clearly illustrate the need for LDES in a decarbonized power system and identify policy and planning reforms that will send the necessary long-term investment signals to support the development of LDES technologies.
Approach/Activities
This presentation would sythesize the work done in four recent papers. In the first paper, we analyzed the operational characteristics of a decarbonized system, using California load data that are met with a hypothetical fleet of wind and solar resources. The resulting disconnects between when energy is generated and when it is used create a clear need for LDES technologies to be deployed at scale to reconcile load and generation. The second paper studies the current role that energy storage technologies play in integrating renewable resources and the planning challenges that have been overcome to identify the benefits of energy storage and integrate them into planning models. It concludes by identifying the need for LDES technologies to integrate higher levels of renewables. The third paper compares and contrasts energy storage developments in the two states with the most battery storage: California and Texas. The average duration of storage projects in California is almost three times as long as the average duration in Texas; this paper contrasts policies in the two states to tease out the specific reforms that have enabled longer-duration projects in California and what that tells us about the reforms that will be needed to enable LDES deployments. In the fourth paper, we study the structure of existing state energy storage mandates, which are almost all capacity-based, and present an analysis showing how switching to energy-based storage procuremen targets can send technology-neutral investment signals to support the deployment of cost-effective LDES technologies.
Results/Lessons Learned
This presentation will synthesize the results of all four papers. Collectively, they identify three conclusions that will be presented: 1) LDES is a critical technology to enable electric grid decarbonization; 2) current energy policy, planning, and procurement processes fail to send the long-term investment signals necessary to support the development of LDES technologies, and 3) simple reforms to those processes can send meaningful, long-term, and technology-neutral investment signals.