Category: Energy Storage

1
Powering America: The Role of Energy Storage in the Nation’s Electricity System
2
Loose Lips Sink Ships: Public Statements and the Contractual Rights to Renewable Energy Credits in Solar Power Purchase Agreements
3
Balancing the Interconnect: FERC Reforms Large Generator Interconnection Process in a Manner That Could Benefit Energy Storage
4
Join Us for LSI’s Energy Storage Conference on June 11 & 12 in Seattle, WA
5
California Energy Storage Update – What’s In the Latest Procurement Plans?
6
K&L Gates Energy Storage Handbook Volume 2 is Now Available!
7
Join K&L Gates at #ESACon18
8
Energy Storage: 2017 Year in Review
9
New York Signals Continued Support for Energy Storage as Governor Signs Procurement Target Legislation
10
K&L Gates is Pleased to Introduce the Energy Storage Handbook

Powering America: The Role of Energy Storage in the Nation’s Electricity System

By Kathleen Nicholas and Tim Peckinpaugh

Today, the House Energy and Commerce Committee convened its eleventh hearing in its “Powering America” series.  The series goal is to examine all aspects of the U.S. electricity sector, and today the focus was on energy storage.  Members on both sides of the political divide agreed utilization of battery and other storage systems presents an opportunity to better optimize the country’s electricity system, and help bolster vulnerable places like Puerto Rico and rural areas.

The witnesses today were:

  • Dr. Keith E. Casey, Vice President, Market and Infrastructure Development, California ISO (Opening Statement)
  • Mr. Mark Frigo, Vice President and Head of Energy Storage, E.ON North America (Opening Statement)
  • Mr. Kiran Kumaraswamy, Market Applications Director, Fluence (Opening Statement)
  • Dr. Zachary Kuznar, Director, CHP Microgrid and Energy Storage Development, Duke Energy Corporation (Opening Statement)
  • Mr. Kushal Patel, Partner, Energy and Environmental Economics, Incorporated (Opening Statement)

A variety of topics were broached during the hearing, including ways the federal government can be helpful to the storage industry and how large-scale storage can be applied to the grid in ways that increase resiliency and reliability, and are beneficial to ratepayers.

You can view an archived video of the webcast here.

Loose Lips Sink Ships: Public Statements and the Contractual Rights to Renewable Energy Credits in Solar Power Purchase Agreements

By William H. Holmes and Kristen A. Berry

This post is one of a series of “practice tip” articles about renewable energy power purchase agreements.

There is a well-known Chinese proverb: “All problems derive from your big mouth.” These are words of wisdom for parties who are negotiating renewable energy PPAs.

In due diligence, we regularly come across on-site solar power purchase agreements (PPAs) that state that the seller is reserving all environmental attributes and selling only the project’s electricity to the buyer. This type of reservation is common in states like Maryland and Massachusetts, where environmental attributes may have a fairly high market value and may be monetized by the seller to make the project more marketable by effectively reducing the delivered price of electricity.  However, despite this environmental attribute reservation, these PPAs too often go on to say, quite expressly, that the buyer has the right to announce that it is using “solar energy” or “renewable energy” produced by the project.  This seemingly innocuous provision, intended to enable the buyer to brag about its renewable energy purchase, can create problems in PPAs where the seller also reserves environmental attributes.

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Balancing the Interconnect: FERC Reforms Large Generator Interconnection Process in a Manner That Could Benefit Energy Storage

By William M. Keyser, Buck B. Endemann, Benjamin L. Tejblum, Kristen A. Berry, and Toks A. Arowojolu

On April 19, 2018, the Federal Energy Regulatory Commission (“FERC”) issued its much anticipated Final Rule to amend the pro forma Large Generator Interconnection Procedures (“LGIP”) and Large Generator Interconnection Agreement (“LGIA”) (“Order No. 845” or the “Order”). Order No. 845 aims to eliminate inefficiencies and to provide a more streamlined and transparent interconnection process by adopting several reforms. The Order’s objectives are three-pronged: (1) to improve reliability, (2) to promote more informed interconnections, and (3) to enhance generators’ interconnection processes by eliminating inefficiencies and bottlenecks.

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Join Us for LSI’s Energy Storage Conference on June 11 & 12 in Seattle, WA

K&L Gates is pleased to participate in Law Seminars International’s upcoming Energy Storage Conference.  The conference is scheduled to be held at our office in Seattle.  K&L Gates’ Portland partner William Holmes hosts this event as Co-Chair.  Washington DC partner William Keyser will present on “FEROrder 841: Electric Storage Participation in Markets Operated by Regional Transmission Organizations and Independent System Operators” and Seattle partner David Hattery will join a panel on “Business and Transactional Issues.”

About the Conference

Many experts view 2017 as the year in which energy storage turned the corner from nascent technology to full-fledged energy market participant. Major milestones included the construction of a large-scale energy storage facility to replace a natural gas plant in California, completed in less than six months; a large-scale solar-plus-storage PPA in Arizona priced substantially below prior market floors; and Tesla’s announcement of the successful powering of a 100MW mega battery in South Australia.Evolving market rules are expanding revenue opportunities for energy storage, including from deferred transmission and distribution upgrades, reduced peak demand charges, integration of intermittent resources, and provision of ancillary services. With FERC’s Order 841 and state policy initiatives to facilitate energy storage and distributed energy resources, energy storage projects may soon receive additional regulatory support.LSI’s first Energy Storage conference will explore in detail all of the facets for energy storage project development with the goal of better positioning you to take advantage of the opportunities.
For more information and to register, click here.

California Energy Storage Update – What’s In the Latest Procurement Plans?

By Buck B. Endemann and  Kristen A. Berry

Just as Prometheus hid fire in a fennel stalk to gift it to the unaware ancients, the pioneers of energy storage technology seek to harness and store energy in increasingly novel ways. Transforming captured energy into storable and consumable power stands at the forefront of this century’s revolution in green energy technology. In 2017, the United States deployed 431 MWh of energy storage capability, largely spurred by state-specific energy storage mandates.[1] California’s state legislature has continued to lead the nation and spread Prometheus’s “secret spring of fire.”

While the concept of storing energy is centuries-old, new battery technologies promise to mitigate California’s infamous duck curve and provide the low carbon, flexible ramping resources necessary to accommodate the state’s increasing penetration of solar power. The Union of Concerned Scientists estimates the United States’ total current storage capacity at 23 gigawatts (GW), which approximates the capacity of 28 coal plants.[2] Ninety-six percent of this capacity, however, derives from pumped hydroelectric storage, most of which was built in the 1960s and 1970s and is increasingly vulnerable to drought and other environmental risks. More recently, energy storage developers have focused their efforts on battery technologies, with lithium-ion batteries in particular making great strides in terms of duration and cost-effectiveness. Market watchers have projected that by 2020 the price of battery storage could decline to $200 kWh, compared to today’s market price of approximately $340/kWh.[3]

As detailed in the K&L Gates Energy Storage Handbook (Version 2.0), California’s two landmark energy storage bills require California’s Investor-Owned Utilities (IOUs) to procure and install nearly 2 GW of storage by 2024.[4]  Under AB 2514, the California Public Utility Commission (CPUC) required California’s IOUs to procure by 2020 1,325 MW of storage capacity split among the transmission, distribution, and customer domains.  In AB 2868, the legislature set an additional procurement target of 500 MW for distributed-connected energy storage systems, with individual 166 MW goals established for Southern California Edison (SCE), Pacific Gas & Electric (PG&E), and San Diego Gas & Electric (SD&E). Under both laws, California’s IOUs must submit periodic procurement plans to show progress toward each law’s targets.  In February and March 2018, SCE, PG&E, and SDG&E submitted their 2018 energy storage procurement plans, which lay out each IOU’s strategy to meet its energy storage goals in its respective service territory.

SCE proposes to procure a total of 60 MW of energy storage by 2018 in two separate procurements of 20 MW and 40 MW.  The 20 MW of procurement would respond to an additional legislative directive, SB 801, under which SCE is required to deploy energy storage in response to the natural gas shortages caused by the Aliso Canyon gas storage facility’s well failure.  For the remaining 40 MW, SCE plans to launch programs and investments to solicit utility-owned storage, as mandated under AB 2868. SCE’s procurement plan also seeks CPUC approval to allocate $9.8 million to install energy storage at low-income, multi-family dwellings.

PG&E’s procurement plan focuses on the 166 MW of energy storage under AB 2514 that it is required to procure in the 2018-2019 procurement period.  To meet that target, PG&E proposes an energy storage request-for-offers framework. To achieve its AB 2868 target, PG&E outlined its four categories of distribution-connected storage investments: (1) researching the role of distributed energy storage in wildfire safety, particularly within the context of the North Bay Wildfire rebuilding efforts, (2) launching a behind-the-meter storage program for up to 5 MW of thermal storage, (3) identifying and seeking immediate CPUC approval (via a Tier 3 advice letter) for storage investments up to 166 MW, and (4) requesting authorization for additional investments beyond the categories identified in the 2018 application.

SDG&E’s filing proposes seven utility-owned micro-grid projects, all of which would exist at the distribution circuit level. These projects would provide services to entities that contribute to public safety, like police stations and firehouses, by providing storage capabilities separate from the main grid.  SDG&E argues that these distributed storage systems will provide a wide-range of benefits, including grid resiliency, wholesale market revenues, and reduced dependency on non-renewable energy sources by minimizing the need for back-up generators.  SDG&E also plans to contribute $2 million toward a pilot energy storage incentive program for non-profit facilities, such as nursing homes.

Each of these utilities will roll out its initiatives over the remainder of 2018 and beyond.  K&L Gates will continue to monitor energy storage developments and provide updates.

[1] GTM Research / ESA, U.S. Energy Storage Monitor, https://www.greentechmedia.com/research/subscription/u-s-energy-storage-monitor#gs.KZIlnzQ (2017).

[2] Union of Concerned Scientists, How Energy Storage Works, https://www.ucsusa.org/clean-energy/how-energy-storage-works#.WtAsTq2otD8 (2013).

[3] McKinsey & Company, The New Economics of Energy Storage, https://www.mckinsey.com/business-functions/sustainability-and-resource-productivity/our-insights/the-new-economics-of-energy-storage (August 2016). Energy Storage Report, Study: Flow Batteries Beat Lithium Ion, http://energystoragereport.info/study-flow-batteries-beat-lithium-ion/#sthash.c07jCAVv.gXdjY17t.dpbs (July 2017).

[4] K&L Gates, Energy Storage Handbook, http://www.klgates.com/epubs/Energy-Storage-Handbook-Vol2/ (April 2018).

K&L Gates Energy Storage Handbook Volume 2 is Now Available!

 

 

As a courtesy to our clients and friends, the K&L Gates Power practice has updated the popular resource for you – the Energy Storage Handbook.

Designed as a basic primer on what energy storage is, how it is regulated and what sorts of issues are encountered when such projects are financed and developed, the Handbook is intended to highlight the most common regulatory and developmental issues faced by our clients and the industries we serve.

New In Version 2

To view Version 2 of the Energy Storage Handbook, please click here.

Join K&L Gates at #ESACon18

K&L Gates is proud to sponsor the Energy Storage Association’s 28th Annual Conference and Expo

K&L Gates welcomes you to join us at #ESACon18.  As the ESA News Desk Host, we are excited to have the opportunity to meet with you at this renowned conference and expo.  The conference will be held on April 18-20 at the Hynes Convention Center in Boston, MA.

K&L GATES HIGHLIGHTS

DISCOUNT CODE
As a member of the ESA Board of Directors, Portland Partner Bill Holmes is pleased to offer a 10% discount on registration.  Enter code BILLAC18 to receive the discount.

Energy Storage: 2017 Year in Review

This issue of EDGE Advisory: Energy Finance Report reviews energy storage developments in 2017, focusing on the key factors that will impact the sector going forward. This issues covers the following topics:

To view the full newsletter, please click here.

Highlights in this issue include:

Heading into 2018, we look forward to the industry’s accelerating growth, and to continuing to work closely with companies, investors, trade associations, and policy makers in addressing changes in market rules and maximizing the opportunities for energy storage across the electric power sector.

To download a printable PDF of the publication, open the link above and click on the fifth icon from the left in the magazine toolbar at the top of the page.

New York Signals Continued Support for Energy Storage as Governor Signs Procurement Target Legislation

By Buck Endemann, Bill Holmes, and Mike O’Neill

On November 29, 2017, New York Gov. Andrew Cuomo (D) signed Assembly Bill A6571.  Passed by the New York legislature in June 2017, this legislation directs the New York Public Service Commission (PSC) to undertake two efforts: (1) institute a proceeding to establish the Energy Storage Deployment Program within 90 days; and (2) set a target by January 1, 2018, for the installation of qualified energy storage systems across the state by 2030.

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K&L Gates is Pleased to Introduce the Energy Storage Handbook

As a courtesy to our clients and friends, the K&L Gates Power practice has prepared a new resource for you – the Energy Storage Handbook.

Designed as a basic primer on what energy storage is, how it is regulated and what sorts of issues are encountered when such projects are financed and developed, the Handbook is intended to highlight the most common regulatory and developmental issues faced by our clients and the industries we serve.

We hope you find this inaugural edition of the Energy Storage Handbook of interest, and we welcome any feedback and suggestions for future editions.

To view the Energy Storage Handbook, please click here.

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