Progress on Energy Storage Can Expedite Minnesota’s Shift to Clean Energy

Environment Minnesota Research and Policy Center

People have known for decades that virtually unlimited energy resources like solar and wind energy are cleaner and healthier than energy produced by dirty fuels. But, utilities and consumers occasionally express concern about the variability and dependability of those renewable sources. Those concerns are fading with the emergence of game-changing energy storage technologies.  According to a new white paper released today by the Environment Minnesota Research and Policy Center, the rapid growth of less expensive wind and solar energy and the plummeting costs of energy storage have led to a six-fold increase in energy storage capacity (excluding pumped hydropower) over the past decade. 

“As renewable energy production rises, energy storage is increasingly becoming a ‘go-to’ option for utilities, businesses and homeowners.  But many people are still unaware that it’s ready for prime time,” said Tim Schaefer, Director of Environment Minnesota. “We need to educate our policy makers about how the smart use of energy storage can make Minnesota’s transition to clean, renewable energy possible”

The report, Making Sense of Energy Storage: How Storage Technologies Can Support a Renewable Energy Future, provides an overview of energy storage technologies, including batteries, thermal storage and others.  It also illustrates how energy storage measures have benefited consumers and the electric system by preventing expensive construction of new transmission lines, improving resilience after storms and maintaining reliability in California after the largest gas leak in U.S. history. St. Paul’s own All Energy Solar has already installed a dozen Tesla Powerwall batteries and has orders to install 50 more by the end of the year.

“Environment Minnesota Research and Policy Center’s report shows that economical energy storage solves the last remaining technical hurdle to a high-renewables grid, but it also shakes loose utilities’ monopoly control and puts power in the hands of grid users who, for the first time, can be as self-reliant as they wish,” said John Farrell, Director of the Energy Democracy Initiative at the Institute for Local Self-Reliance. 

Declining costs, combined with a growing recognition of the multiple benefits storage can offer has led more policy makers to consider storage into energy planning and regulation.  As of last March, 140 state-level policies and regulations related to the utility side of energy storage were pending or in place across the country.[1] A number of states, including CA, MA, and NY, have established energy storage targets. Minnesota is among the growing number of states where utility regulators are considering storage. Minnesota’s largest co-op, Connexus Energy, is planning what would be the state’s largest energy solar project, with a collective output of around 10 mW.

“Policy makers across the country are beginning to realize that deploying energy storage can enhance the electricity system while facilitating the growth of clean, renewable energy options,” said Ellen Anderson, Energy Transition Lab, at the University of Minnesota.  “Batteries paired with solar can already compete with new gas plants on cost to meet peak energy demand.  At the same time, energy storage can also help states like Minnesota maximize and expand the use of our tremendous wind energy resource.”

“More than 300 new storage projects were added to the grid over the last decade, and at least 300 more are already being planned or built,” said Elizabeth Berg, a Frontier Group analyst, and co-author of the white paper.  “Our report shows that these technologies cannot only aid our transition to a renewable energy system, but can provide many other benefits to the electric grid as well.”

The report also makes a number of recommendations to policy makers, including:

• Removing barriers to energy storage by clarifying and improving grid connection and permitting policies;
• Designing rates and energy markets to capture the full value of energy storage, including grid reliance, avoided transmission and distribution costs and avoided peak demand costs;
• Adopting programs and incentivizing homes and businesses to adopt storage; and
• Establishing storage targets and benchmarks that encourage utilities to build and utilize energy storage throughout their system.

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[1] Mike Munsell, “21 US States Have Energy Storage Pipelines of 20MW or More”, GTM Research, 28 March 2017.