“Evaluating Utility Procured Electric Energy Storage Resources: A Perspective for State Electric Utility Regulators,” also known as the PUC Handbook (SAND2012-9422, 806 kb, PDF), provides a perspective on issues pertaining to the deployment of utility procured electrical energy storage resources. The intended audience includes state electric utility regulatory authorities, their staffs, and the planning personnel in the utilities they regulate.
Authored by Sandia’s Dhruv Bhatnagar and Verne Loose, the purpose of the PUC Handbook is to inform the audience about the potential opportunities for energy storage technologies to play a greater role in the evolving electricity marketplace and grid.
The surge of investments in renewable energy (RE) during the last decade, particularly wind and solar energy has stimulated interest in energy storage. These technologies have the capability to balance the variability inherent in many RE technologies.
The state public utility commissions’ (PUC) responsibility for regulating utilities leads to a focus on aspects of grid operations and expansion including: voltage and frequency regulation; distributed generation; renewable energy, particularly the administration of Renewable Portfolio Standards (RPS) mandates; and grid capital investment.
Energy storage systems can contribute in each of these areas. Given the potential of energy storage technologies to perform these functions, their access to the regulatory process must be improved together with removal of barriers and appropriate and consistent cost benefit analysis methodologies so that they are routinely included in the suite of options considered for providing key grid services. The solutions that deliver the services cost effectively will likely be the solutions put forth by utilities and approved by utility commissions. Two storage system case studies are presented as a means to illustrate some of the fundamental valuation principles particularly pertinent to energy storage systems.