The U.S. electrical grid connects over 11,000 power plants with about 158 million consumers across the nation. However, the electric grid was designed to deliver electricity to customers immediately – with very little energy actually stored.
Adding more energy storage technologies to the electric grid can provide a number of benefits, according to the Government Accountability Office (GAO), including improved grid reliability, reduced costs, and increased adoption of renewable energy sources such as solar and wind.
In a recent technology assessment, GAO explains that the U.S. electric grid already has some storage technologies in use – all offering different duration times. Some of these include pumped hydroelectric storage, batteries, compressed air, and flywheels.
“Pumped hydroelectric and compressed air energy storage can be used to store excess energy for applications requiring 10 or more hours of storage. Lithium-ion batteries and flywheels are used for shorter-duration applications such as keeping the grid stable by quickly absorbing or discharging electricity to match demand,” GAO says in its assessment.
While these energy storage technologies offer a number of benefits, they also pose a number of challenges – especially when the grid was not designed for this use.
According to GAO, these technologies face the following challenges:
- Planning. Planning is needed to incorporate energy storage technologies with the existing grid. However, it can be difficult to make accurate projections of each technology’s cost and to gather other data needed to inform the planning process.
- Regulation. Rules and regulations vary across regions and states. This makes it difficult for energy storage project developers to determine each region’s regulatory outlook and profit potential.
- Standardization. Codes and standards may need revising in order to keep pace with the new energy storage technologies.
- Valuation. Determining the potential of energy storage technologies may depend on the ability to value investments. “For example, profit potential can vary because regions and states value storage differently, reflecting local market rules and regulations,” GAO says.
The government watchdog agency offers six policy options and implementation approaches for policymakers in response to these challenges. GAO says the policymakers include Congress, Federal agencies, state and local governments, academic and research institutions, and industry.
Policy Approaches
The first approach is the status quo approach, which illustrates a situation if policymakers take no additional action beyond current efforts. GAO says policymakers could maintain the status quo through tax credits and funding, as well as research and development.
The second is the integration approach. GAO says policymakers could include clear goals and next steps in plans to help integrate storage by establishing roadmaps – based on storage costs and benefits – and assessing energy storage in the plans.
In the third approach, or the regulation approach, GAO says policymakers could revise and enact rules and requirements for energy storage by identifying market barriers, establishing targets or mandates, or updating ownership models.
As for the standardization approach, GAO says policymakers could update or create new codes and standards and educate people on energy storage safety risks.
The next approach outlined by GAO focuses on supporting the manufacturing and adoption of energy storage technologies. For example, GAO says policymakers could support enacting battery reuse and recycling policies, conducting outreach, and targeting activities to support storage deployment.
Finally, the sixth approach says that policymakers could create incentives for storage deployment, such as loan guarantees or tax credits. Additionally, GAO says they could consider policies to encourage the capture of multiple revenue streams.
GAO acknowledges that “this is not an exhaustive list of policy options,” but intends for it “to inform policymakers of potential actions to address the policy challenges identified in this technology assessment.”
