California will soon release an updated evaluation of greenhouse gas emissions from storage systems participating in the Self-Generation Incentive Program. Unfortunately, due to incomplete policies and methodology, the state may again reinforce the erroneous narrative that customer-sited storage drives up emissions.
There’s a better approach for customer-sited storage designs and applications to be applied to the greatest benefit of the state, and to prevent storage from being artificially constrained from helping California reach its GHG goals. As it has done with programs, tariffs and incentives to encourage customers to reduce energy consumption or peak demand, or to shift consumption to better utilize resources and reduce costs, the state should apply the same approach to enable storage to maximize GHG emissions reductions.
Customer-sited or behind-the-meter (BTM) storage, sited anywhere on the grid, can enable higher penetrations of renewables, and in doing so, reduce systemwide GHG emissions. Furthermore, when energy storage is charging during the duck belly, it absorbs and shifts power to the ramp “neck,” helping to reduce greenhouse gas emissions by avoiding fossil ramping assets. These benefits should be recognized.
California must develop an accurate methodology based on a GHG signal
The California Public Utilities Commission (CPUC) issued a Decision in 2015 on Self-Generation Incentive Program GHG evaluation approaches (D.15-11-027) that acknowledged the need to improve the storage GHG methodology. Others agree: A Carnegie Mellon December 2016 study criticized the SGIP methodology’s operating assumptions and inattention to retail tariffs and load profiles, and suggested a shift to production cost modeling.
The CPUC methodology mistakenly assumes all BTM storage charging is done “off-peak,” that 100 percent of off-peak electrons are generated from combined-cycle gas turbines, and that all discharging is “on-peak” to offset combustion turbine peaker plants. Like most related studies, these assumptions are flawed in their failure to understand the economic market signals that determine storage behavior.
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