In December, the six major Independent Systems Operators (ISO’s) across the country filed their plans for creating new market rules and opportunities for energy storage. While the rules will take at least a year to go into effect and the plans are just an initial step, a recent study suggests that this effort may add up to 50,000 megawatts (MW) of storage nationwide in the next decade.
At the same time, many states – like California, Massachusetts, New Jersey and New York – are recognizing the potential value of energy storage and are starting to integrate it as a key component of their plans to meet climate and renewable energy goals.
Combined with falling capital costs, these trends suggest a lot of new energy storage in the pipeline. This presents both opportunities and challenges for states looking to reduce their greenhouse gas emissions.
Not all energy storage is “clean”
When designed and incentivized properly, energy storage can be charged using clean power, and that power can then be discharged to displace dirtier power later in the day. While this is the optimal outcome, a growing body of research suggests that energy storage could actually increase emissions if it’s not done carefully.
The environmental benefits of storage depend critically on how, and when, it is operated. Electricity rates, wholesale energy markets and the physical constraints of the electricity grid all combine to incentivize when storage owners charge and discharge their devices, and for what purpose – the “how” and “when” of storage utilization. Essentially, the effect that energy storage has on emissions depends on which power plants are used to charge the storage, which plants are offset when the storage discharges, and how efficiently the storage itself operates.
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