Checking in on Storage: Economics and Current Developments

There is hardly ever a dull moment when working at start up, but I do try to keep my ear to the ground to one of my favorite topics in the energy space: storage. I love it. The space is developing so quickly and addressing renewables’ intermittency. Equally exciting, it can address gaps left by aging “peaker”-plants and decommissioned nuclear facilities. As a California native I lived through the rolling black out days after Enron and most recently the massive methane leak north of Los Angeles, and hold high hopes for what renewables + storage can do to prevent such disasters.

​A recent paper published by AutoGrid took a look at the economics of battery storage, and pointed to the co-benefits both to ratepayers and utilities of the technology. During graduate school in San Diego, I worked with team analyzing the economics of battery storage for one of the large investor owned utilities. Our results aligned well with the Autogrid paper, noting that the economics are already make sense for C&I customers through demand charge reduction. Demand charges can make up 40-60 percent of a C&I customer’s bill, and even modest reductions can lead to significant savings.

Adoption will only increase as the price of storage continues to drop (or as demand charges rise), and with this comes a reduction in utility revenue. I certainly hope that utilities will see the benefits of DERs and embrace them, rather than resort to the rather draconian policy changes that have inhibited renewables in places like Nevada. Southern California utilities are beginning to deploy storage themselves, as a recent Times piece noted, though the acceptance and utilization of behind the meter DERs will likely still take time. While reduced revenues, especially if storage scales, could present a challenge to utilities, the benefits to grid stability, reduced dependence on costly peaker plants, and contributions to the state’s ambitious climate goals truly begin to show the net benefits of encouraging and embracing storage.
           
We are excited to be part of the clean energy revolution, and look forward to what is next for storage!