California is fighting fossil fuels by forcing utilities to store green energy

California is replacing this nuclear power plant with batteries.
California is replacing this nuclear power plant with batteries.
Image: Gregory Bull/AP
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It has not been a good time to own a carbon-spewing power plant in California and today it just got worse. Regulators have approved a first-in-the-nation rule requiring the state’s three big utilities to obtain technology to store 1,325 megawatts (MW) of electricity from wind, solar and other renewable but intermittent sources of energy by 2020.

That’s more electricity than that generated by the soon-to-be-shuttered San Onofre nuclear power station in southern California and it will allow grid operators to avoid tapping fossil-fuel power plants when they need to balance supply and demand. In other words, we’re talking about some seriously big batteries.

Just as California’s mandate requiring utilities to obtain 33% of their electricity from renewable sources by 2020 sparked a green energy boom, the move today is designed to jump-start the nascent energy-storage industry. “Energy storage has the potential to be a game changer for our electric grid, and I fully support the goals of grid optimization, integration of renewable energy and reduction of greenhouse gas emissions,” Mark Ferron, a member of the California Public Utilities Commission, said at a hearing today that approved the requirement.

While some utilities have experimented with energy-storage systems, they have been far too expensive to be practical. Plus there had been relatively little need for them. That’s changing rapidly in places like California, where large amounts of wind and solar energy are coming online. If the sun stops shining and the wind ceases to blow, grid operators can face big fluctuations in the electricity supply. And much of that renewable energy is so-called distributed generation, produced by tens of thousands of rooftop solar panels installed on homes scattered around the state rather than from a big centralized power plants.

California’s big three utilities—Pacific Gas & Electric, San Diego Gas & Electric and Southern California Edison—opposed the energy storage requirement to varying degrees, arguing that it was too much too soon. But utility commissioners rejected that idea, countering that California has long set forward-looking policies to spur technological innovation.

Under the targets, the three utilities must collectively procure bids for progressively larger amounts of energy storage between 2014 and 2020 and ensure those systems are installed by 2024. Most current energy storage systems are batteries or compressed air systems, which use motors to compress air in a tank to store energy generated by wind and solar farms. When the air is heated it expands and drives pistons to generate electricity.

And so the new California mandate is good news for startups like LightSail Energy, which is developing compressed air storage technology. Another likely beneficiary: BYD, the giant Chinese battery and automaker. The company this year opened a plant near Los Angeles to assemble iron phosphate batteries to power its electric buses. BYD plans to supersize those battery packs for use as energy storage systems.