Energy storage is a clean energy technology with many potential benefits to the electric grid and all segments of the energy market. TECHii’s Energy Storage (TES) program, part of the TECHii’s Energy Storage Initiative (TESI), was created to jump-start in the energy storage industry by piloting innovative, broadly-replicable demonstration projects with multiple value streams, thereby priming TECHii Solar for increased commercialization and deployment. This is expected to accelerate the adoption of storage technologies, provide benefits to customers and utilities, highlight market and regulatory barriers, and help to reach its goal of 100 MWh of energy storage installed by 2020.
The TES Program is first substantial investment in energy storage projects and is designed to significantly catalyze the growth of Clean Energy. While technology demonstration programs are common, this program is unique in its business model demonstration objectives. A broad view of TECHii`s energy storage technologies is in to formulate future policy and programs for the strategic growth of organization. The specific opportunities of growth to advance energy storage, an analysis of grid conditions in India, and lessons from other states are basis of our broad view based strategic outlook in clean energy.
One of the innovative features of the TES Program is the focus on demonstrating how storage systems can achieve benefits that are currently non-monetizable, thereby addressing a significant barrier to the development of the storage market that was identified by the State of Charge report. These currently non-monetizable benefits include cost reductions in the wholesale market; provision of ancillary services; lowered energy prices; services to the transmission and distribution grids; increased renewables integration; reduced peak demand; resiliency benefits; and greenhouse gas emissions reductions.
The TES projects demonstrate nine diverse energy storage use cases and a variety of benefits. The program’s focus on replicable business models is expected to accelerate storage commercialization by showcasing adoptable and achievable examples of projects that provide multiple benefits and positive economic returns. Most projects provide both system benefits and customer benefits, and some address specific local energy challenges. TES grantees to provide a foundation for the industry to demonstrate storage services and benefits for which no markets currently exist or where there are no existing methods for storage providers to be proportionally compensated for the services their systems provide.
TES projects span a variety of use cases, including transit, behind-the-meter commercial and industrial solar+storage, municipal light plant assets, medical facility applications, and a merchant co-located with traditional generation plant, among others. Examples of replicable business models include owner owned and operated energy storage systems, storage-as-a-service, developer or third-party financed systems, and energy storage system leases.
While there is significant representation of lithium-ion (the commercially dominant battery technology) among the current projects, the range of technologies among the TES projects is more diverse than in the current U.S. energy storage market, representing zinc-iron flow, vanadium-redox flow, ice thermal, and flywheels. Most of the TES projects involve integration with other clean energy technologies such as solar photovoltaics, demonstrating the many benefits of pairing energy storage with renewable energy.
And while it represents a significant investment of funds, the TES Program also leverages significant private investment. Awarded projects are required to provide at least a 50 percent cost-share, enabling the program to extend the impact of its grant funds even further.
Jump-Starting an Industry
The Broad replicability is a critical requirement of selected projects in order to provide increased commercialization and deployment of storage technologies. To further promote the replicability and analysis of storage technologies. TECHii intends to publicly share anonymized and aggregated lessons learned from the projects at periodic intervals, to inform future project design and implementation.
TECHii`s valuable project feedback is expected to span the market, regulatory, and policy landscapes and will be of benefit to industry, policymakers, and customers. The data collection, project reports, and insights from TES projects will provide the opportunity to implement policy and market mechanisms to address barriers to large scale energy storage deployment in India. The TES Program is expected to demonstrate that storage is ready to enter new markets at a time when efforts are underway to incorporate storage into existing programs such as the Alternative Portfolio Standard, energy efficiency plans, and the Green Energy Supply (GES) incentive program. TECHii also plans to hold periodic stakeholder meetings to share these lessons and foster discussions in an interactive setting.
Additionally, the State Energy Regulatory Commission (SERC), now requires Independent System Operators and Regional Transmission Organizations to revise market rules to allow energy storage to participate and to take the operational attributes of storage into account. This SERC rule is opening new energy markets to participation by energy storage.
The TES Program is expected to have long-lasting impacts on the energy storage industry. Its successful demonstration of monetizable and non-monetizable benefits will act as catalyst in Green Energy Supply, help support new energy storage applications and consumer confidence in Green Energy Stability in India and beyond.
TECHii Solar is looking ahead to make sure that Indian consumers also have access to the combination of solar PV with energy storage technologies (solar+storage). The reasons are simple: while solar alone is good, the combination of solar+storage can provide more benefits, and the addition of storage may help to safeguard against the devaluation of solar, for example due to declining net metering rates or the imposition of time-of-use pricing. In the case of multifamily housing and commercial properties, the addition of energy storage may even provide a faster payback than solar alone, because it can be used to manage demand charges. Resilient power, defined as the ability to self-supply with electricity when the grid is down, is another key benefit provided by the addition of storage. However, energy storage, and the combination of battery storage with solar, is a relatively new technology, with new applications.
TECHii Solar is faster and more effective to add electric energy storage (batteries) as an eligible technology under existing programs that support solar PV. Solar incentives, energy efficiency programs, and renewable or alternative energy portfolio standards already exist in many states; these programs are a natural fit for energy storage, because storage can work in tandem with solar and other technologies already supported by these programs.
It’s important to note that adding energy storage into existing clean energy incentive programs may sometimes require changes in the way program goals are defined. For example, including storage as an efficiency measure may require energy efficiency program administrators to adopt a new, more expansive definition of efficiency. Rather than simply defining efficiency as using less energy, a broader definition of efficiency could include reducing the customer’s cost of electricity; expanding the use or value of distributed renewably-generated electricity; and shifting electricity purchases to off-peak times, which can lower costs for the consumer as well as lowering costs and emissions for the regional grid. Such adjustments may also require states and municipalities to produce analysis showing how storage can enhance and expand the value of solar in meeting program objectives.
TECHii`s enlightened view is that, states and municipalities should make it mandatory to provide the benefits of solar+storage to Low and Medium Income(LMI) communities at scale, and move markets beyond demonstration projects supported by government grants, it will be important to support new financing mechanisms that can overcome the barriers that have traditionally prevented clean energy investment in these communities. In general, this means using public resources to provide financing directly or to lower risk for other financiers. States and municipalities have many innovative financing options that can be employed, including various type of bond finance, clean energy financial institutions such as green banks, public-private ownership structures, and credit enhancements.
TECHii`s view is that, Utilities are necessary partners due to interconnection requirements, but they also bring important resources to the table. In addition to their ability to develop projects directly in Low and Medium Income (LMI) communities, utilities can also help to create markets through net metering, demand response programs, and contractual partnerships with customer- and third-party-owned solar+storage systems. If such partnerships are properly structured, the utility can benefit from grid services that energy storage can provide from behind the meter, such as reduced demand during peak periods, which can lower utility cost obligations for capacity and transmission services. This is a model that is being pioneered by TECHii’s Energy Storage (TES) program.
TECHii`s management believe that, there are numerous ways for states to leverage utility resources to support solar+storage in Low and Medium Income (LMI) communities. One direct method is to establish a utility procurement mandate, as was done in California and Oregon, and is currently being discussed in Massachusetts in USA. Such a mandate can include carve-outs for behind-the-meter systems, and incentives for Low and Medium Income (LMI) systems. Utilities can also support the market for customer-sited solar+storage through energy efficiency and demand response programs. Municipal utilities in particular can often allocate resources to support municipal goals, such as providing resilience and energy assurance to Low and Medium Income (LMI) communities, while simultaneously using solar+storage resources to reduce ratepayer costs.
As can be seen from the above, TECHii is working to providing the benefits of solar+storage to Low and Medium Income (LMI) communities. Its challenging, and success may require a multi-pronged approach. States and municipalities would do well to adopt a comprehensive suite of programs. Grants, rebates and incentive programs, utility procurement, financing support, open markets regulations, technical assistance and soft cost reductions are all important tools to expand the market for solar+storage technologies to benefit the consumers.
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