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California adopts energy storage mandate for major utilities

California today became the first state in the country to require utilities to invest in energy storage, a move that policymakers say will pave the way for increasing amounts of renewable energy and greenhouse gas reductions.

The California Public Utilities Commission unanimously voted to approve a proposal setting out biennial procurement targets for the state’s three major investor-owned utilities through 2020.

In total, the three utilities – Pacific Gas & Electric Co., Southern California Edison Co. and San Diego Gas & Electric Co. – will have to buy 1.325 gigawatts of storage by 2020, an amount that would increase energy storage capacity worldwide by 50 percent, not counting energy stored behind hydroelectric dams. The ruling has separate carve-outs for technologies that store energy from generation connected to transmission and distribution lines, as well as customer-owned generation.

Building energy storage – in the form of batteries, flywheels, pumped water and other devices – will help smooth the intermittent output of renewables like wind and solar, help manage peak demand, and reduce the need for transmission upgrades, officials said.

“Storage really is the game-changer in the electricity industry,” said CPUC Commissioner Mike Florio. “The potential rewards are enormous and can really change the way we think about the electricity industry.”

A 2010 law signed by Gov. Jerry Brown (D) directed the CPUC to develop the proposal to deal with increasing amounts of wind and solar power, as well as to reduce greenhouse gases. If utilities can store renewable and conventional power generated during the day, they can use it during hours of peak demand in the afternoon and evening, reducing the need for “peaker” plants that run on fossil fuels, as envisioned in Democratic state Assemblywoman Nancy Skinner’s A.B. 2514 (ClimateWire, Sept. 12).

Environmental groups praised the decision, pointing out that it could help fill the gap left by the permanent closure earlier this year of the San Onofre nuclear plant in Southern California.

“This decision comes at the perfect moment as the state plans for the replacement of San Onofre Nuclear Generating Station,” said Evan Gillespie, the Sierra Club’s Western region deputy director. “Today’s decision will spark new ideas and storage methods that can move us out of a destructive energy system and into a safe, healthy and efficient system of renewable energy.”