Clean Energy Group Proposes 20 Federal Strategies to Advance Battery Storage Markets

Author: Lewis Milford, Clean Energy Group | Projects: Energy Storage Policy, Resilient Power Project, Phase Out Peakers

Clean Energy Group has proposed a comprehensive series of new policy actions the federal government could take to accelerate the battery storage market. These policy recommendations are contained in comments CEG filed in response to the Energy Storage Grand Challenge Draft Roadmap (Storage Roadmap) and an accompanying Request for Information (RFI) the U.S. Department of Energy (DOE) released in late July 2020.

The Draft Roadmap proposes that the federal government pursue a long-term federal strategy to expand the storage market along the lines of the successful federal SunShot Initiative. The SunShot program adopted hard cost reduction targets for solar adoption, and provided grants to communities, states and NGOs to support new policies and actions at the state and local level to drive down solar costs through market activity.

A well funded, comprehensive and long-term federal program to support the scale-up of energy storage in the US could revolutionize the battery storage market. The Roadmap is a promising first step in the right direction. If strengthened with commitments to real cost reduction targets, with dedicated long-term funding, with strategies to provide more customer resilience, with serious efforts  to reach low-income populations and people of color and with new creative financing tools, the Roadmap could set the stage for an aggressive, next generation federal storage policy over the next several years.

In comments filed with DOE, CEG makes 21 recommendations to strengthen the draft Roadmap. Among the suggested strategic improvements to the Roadmap are the following:

  • It should articulate a clear path forward to specific, time-bound, targeted cost reductions for battery storage technologies.
  • It should call for committed federal funding for the initiative over the next 10 years, like the successful SunShot Initiative.
  • It should develop specific strategies to support behind-the-meter (BTM) battery storage markets, as that is where the greatest innovations can produce the most immediate benefits to energy consumers. Focus there should be on an emerging “virtual power plant” model of aggregated, distributed storage systems that serve the needs of both individual battery owners and regional electric grids. Bringing this model to scale will require both federal- and state-level support for resilient solar and storage efforts, to provide more protection for customers suffering from power outages and to offer greater support for challenging markets like affordable housing and critical public facilities.
  • It should adopt a host of new federal policy roles for DOE and other federal agencies, including the national laboratories. This multi-agency federal effort should address the need for greater market analysis, support for federal-state partnerships, and other policies to coordinate and support advances in battery storage policy, regulation and programs throughout all levels of government (federal, regional, state and local).
  • It should especially address a noteworthy omission in the current draft, which does not materially focus on the need to get these new cost-saving and resilient energy technologies into the hands of low- and moderate-income (LMI) customers and environmental justice communities. In various equity sectors, LMI customers and environmental justice communities are most in need of the many economic, public health, and environmental benefits the pairing of solar and battery storage can provide.
  • It should develop new financing platforms that help reduce the financing risk of early stage battery storage technologies, such as “risk reduction” financing gap programs and new ways for utilities to provide incentives for customer-sited storage, again especially in hard to reach LMI markets.

These strategies are now more needed than ever. As the CEG comments note, “the negative effects of COVID-19 and climate change have come together to make these technologies even more important than ever. That is, there are new market uses of battery storage technologies in making homes, which are now serving triple duty as offices, schools, and housing, more resilient. Energy resilience provides a safety net for people with electricity-dependent, home health care equipment, making them less at risk from power outages due to storms or other causes. Resilient power systems can make entire communities more secure from extreme weather, wildfires, and the accompanying power outages. Our disaster-prone ‘new normal’ means that battery storage technologies are now essential tools to save lives, reduce physical and economic harm, and preserve communities from disruptions due to power outages.”

Storage technologies unquestionably are critical to facilitate and accelerate the clean energy transition and to enable greater energy democracy for all communities. However, this transition can and should be accelerated by smart federal, state, and community-level storage policies.

Links to the US DOE Draft Roadmap and Request for Information are here and here. A copy of the CEG comments is here. A list of the specific recommendations CEG proposed is here.