California bills to dramatically expand distributed energy storage

On Monday, California Governor Jerry Brown signed four bills that will support and mandate expanded deployment of energy storage in California. This includes adding $83 million in annual funding to the Self Generation Incentive Program (SGIP) and requiring that California utilities procure up to 500 MW of distributed energy storage.

AB 1637 increases SGIP funding by a total of $249 million over the next three years, and follows on a recent decision by the California Public Utilities Commission to assign 75% of the SGIP budget to energy storage.

AB 2868 requires California’s three investor-owned utilities to file applications for new programs that will involve procuring up to 500 MW of distributed energy storage. This is in addition to the 1.325 GW energy storage target set by AB 2514 in 2013, under which procurement has already begun.

A key consideration here is that while AB 2514 included a set-aside for distributed storage, the majority of procurements under the mandate have been from large battery systems on the bulk transmission system.

A third bill, AB 2861 takes aim at interconnection barriers, and authorizes CPUC to create an expedited resolution process for behind-the-meter energy resources including storage which are seeking interconnection.

Finally, AB 33 directs the California Public Utilities Commission and the California Energy Commission to study the potential for long-duration bulk energy storage, such as pumped hydro storage.

California Energy Storage Alliance (CESA) applauded the four bills. “CESA is proud to have played a key role in these bills, which further enable energy storage to become a valued piece of the mainstream energy toolkit, mitigate unwarranted market or interconnection barriers, and allow bulk storage technologies to be appreciated as a solution to renewables integration,” said CESA Executive Director Janice Lin.

The new bills follow on a wave of policy wins for energy storage, including Massachusetts passing a bill to mandate that utilities procure energy storage in August, and New York City announcing a 2020 goal to install 100 MWh of energy storage last Friday.