Pennsylvania Combines Energy Storage Systems Favorably with Solar Power to Maintain Grid Stability

A report released recently by the Pennsylvania Department of Environmental Protection suggests that Pennsylvania should create incentives to encourage energy storage systems in conjunction with solar generation facilities and build a more resilient and cleaner grid.

In a recently released report titled "Pennsylvania Energy Storage Assessment," consulting firm Strategen Consulting recommends the deployment of more grid-scale solar+storage projects. The report also identifies several policy measures that could facilitate the development of energy storage, including setting targets for storage deployment, using public funds to invest in energy storage projects, and evaluating electricity prices associated with grid services.

"This is the first step in defining a strategy for growth in energy storage deployment, and barriers must be overcome to capture the full value of energy storage systems," said David Althoff Jr. director of the Pennsylvania Department of Environmental Protection's Office of Energy Programs. "We recognize that customer demand for energy storage deployments is growing ...... This is part of the opportunity to expand the renewable energy market in Pennsylvania and other states."

Pennsylvania is operating or deploying 22 energy storage projects with a total installed capacity of approximately 1.5 GW. According to survey data from the Pennsylvania Department of Environmental Protection, more than 1 GW of this is from conventional pumped storage facilities, while only 18 MW of installed capacity of lithium-ion battery storage systems are deployed. but PJM's interconnection queue has plans to deploy 7 GW of installed capacity of energy storage systems, including plans for 64 solar+storage projects to be deployed in Pennsylvania.

Paul Ohodnicki, associate professor of mechanical engineering and materials science at the University of Pittsburgh, said expanding storage deployment capacity will play a key role in increasing renewable energy generation while maintaining grid stability.

"The optimal combination of energy storage systems and renewable generation facilities, such as solar+storage projects, could increase the penetration of solar power in Pennsylvania, resulting in more competitive economics," he said in an e-mail. "In addition to mitigating the adverse impacts of intermittent solar generation, solar+storage projects can be used to provide additional grid services that would otherwise not be possible with solar generation facilities or storage systems alone."

Pennsylvania's Solar Future Development Plan, a separate document from the Energy Storage Assessment Report, proposes to increase the state's installed capacity of solar power facilities to 11GW by 2030 so that solar power will account for 10% of the state's total electricity generation. The report states that deploying 25 percent of its solar power facility deployment target with 1.5GW of installed capacity battery storage systems could save $273 million in electricity costs and reduce carbon emissions by 2.5 million tons per year.

Althoff said the Pennsylvania Department of Environmental Protection plans to hold a forum to specifically discuss energy storage deployment, which could inform future policy discussions. Penn EPA will also explore financing opportunities, including through infrastructure proposals issued by President Joe Biden and proceeds from an auction of allowances as the state joins the Regional Greenhouse Gas Initiative.

The report also recommends evaluating the state's retail electricity rates, asserting that its rates do not necessarily reflect the strong performance of grid cost drivers. The state's identified energy storage strategy needs to ensure that retail customers receive price signals that reflect the value that energy storage systems can provide, which will incentivize the market to expand storage deployment capacity.

Althoff said energy storage systems can provide an opportunity to accelerate economic development in Pennsylvania, noting the state has a long history of manufacturing and exporting.

"This model fits Pennsylvania's supply chain dynamics and energy industry culture," he said. "Our manufacturing base and technical energy sector have the opportunity to truly lead in this market, not only for our state but for the Mid-Atlantic region and the United States."