Pennsylvania report recommends increasing solar-plus-storage projects

by Peter Maloney
APPA News
April 25, 2021

Pennsylvania should pair grid-scale solar arrays with battery energy storage to help reduce carbon dioxide emissions and increase grid resilience, according to a report released by the state’s Department of Environmental Protection (DEP).

One way to encourage the growth of energy storage would be to set a state energy storage capacity target, the report, Pennsylvania Energy Storage Assessment: Status, Barriers, and Opportunities, said, noting that seven other states have already set energy storage targets.

The report’s aim, which was commissioned by the DEP’s Energy Programs Office and prepared by Strategen Consulting, was to determine the best path forward to increasing energy storage statewide. The report was funded by the U.S. Department of Energy’s State Energy Program.

Pennsylvania currently has about 1.5 gigawatts (GW) of energy storage capacity in the form of 22 operating or announced energy storage projects, including 1.07 GW of pumped hydro storage facilities, 18 megawatts (MW) of lithium-ion batteries, 12.5 MW of lead carbon batteries, 6 MW of ice and chilled water thermal storage, as well as smaller amounts of other technologies.

“Pennsylvania’s climate continues to get warmer, and we’ve already started seeing the impacts, with increasing swings in temperature and extreme weather,” Patrick McDonnell, DEP secretary, said in a statement. “Solar-plus-storage can help in two ways: It can help slow down climate change by incorporating more clean renewable energy into Pennsylvanians’ daily electricity use, and it can also make the grid more reliable during extreme weather events, better protecting Pennsylvanians’ health and safety as well as critical facilities.”

Strategen used two scenarios in conducting the analysis in the report. One involved utility scale solar-plus-storage systems to serve the grid, the other used stand alone behind-the-meter energy storage systems that provide electricity customers with direct savings on their bills.

The first scenario found the potential for “significant economic and environmental benefits,” particularly if solar-plus-storage projects are supported by public- or ratepayer-funded investments to buy down the incremental costs of adding storage to solar power purchase agreements. Strategen found that about $65 million of public investment in energy storage could be used to leverage private investment and yield $545 million annually in grid and environmental benefits.

In the second scenario, the report found that under current retail rate structures, energy storage provides very limited value to customers in the form of direct bill savings. Analyzing multiple configurations of energy storage sizes and durations, the report found that most resulted in negative payback.

The report also looked at barriers to energy storage development and, among other recommendations, said Pennsylvania should “establish a storage procurement goal or target.” As an example, the report said a storage target linked to 25 percent of the state’s Solar Future plan could “equate to 1,500 MW of storage by 2030 and yield an estimated benefit of about $273 million per year.

The report also said a target for behind-the-meter energy storage could build on existing energy peak reduction targets overseen by the Pennsylvania Public Utilities Commission.

Pennsylvania’s Solar Future plan calls for 10 percent, or about 11 GW, of the state’s electricity to come from solar energy by 2030.

The storage report also recommends 14 other measures to foster energy storage investment and integration, including convening a statewide storage issues forum, designating public funding to accelerate storage deployment, establishing incentive programs for storage projects, and accelerating microgrid deployment at critical facilities.