Moving water takes a big bite out of municipal budgets, particularly in places like Southern California, which has to import so much of its water supplies. That makes water use a prime target for energy savings.

The California Energy Commission estimates that moving and treating of water, and the treatment and disposal of wastewater and the energy used to heat and consume water account for nearly 20% of the electricity consumed in the state.

In addition to existing solar and wind power, in 2010 IEUA installed the largest fuel cell system powered by renewable biogas in the world and lowered its energy consumption by nearly 25% with using energy efficiency measures. The agency also had the first public building in the nation to be awarded a LEED platinum rating.

The opportunity to reduce demand charges makes batteries especially attractive for water utilities. AMS inked a deal for 7 MW, 34 MWh of storage at the Irvine Ranch Water District last month, and in July the company secured $200 million in funding from Maquarie to construct 300 MWh of capacity resources and demand management for utilities and certain commercial, industrial water and university customers in southern California.

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Critics called 2015 a “banner year” for energy storage. 

Now after a year of unprecedented growth, energy storage could be poised to best that performance, according to Navigant Research’s third quarter energy storage tracker.

“The North American market this year definitely has the potential to surpass the deployed capacity in 2015, especially considering how quickly new projects are being built today,” Ian McClenny, a research associate at Navigant, said.

Navigant projections show the North American storage market reaching just above 300 MW by year end.

A total of 221 MW (161 MWh) of energy storage was deployed in 2015 compared with 65 MW (86 MWh) in 2014, according to the Energy Storage Association.

Among the key drivers in the storage market, according to Navigant, are the proliferation of distributed, intermittent generation sources such as solar and wind power, which require increased load balancing, and the restructuring of electricity markets that will create new value streams for energy storage.

Among the notable developments so far this year is an increase in storage projects that use flow batteries and hybrid battery systems, the authors said, citing a Duke Energy project in North Carolina that combines a hybrid Aquion battery and a Maxwell Technologies ultracapcitor that will be used to fill both short and long duration energy needs from the single site at Duke’s Rankin substation.

The report also noted that distributed energy storage, which includes both behind-the-meter residential storage and community energy storage installations, accounted for about 14.2% of new the new storage installations so far this year, the highest percentage of any year yet.

Distributed energy storage systems (DESS), which includes C&I and microgrid installations, also accounted for 45.6% of the storage installations so far this year with the remainder, 54.4%, of the market comprised of utility scale installations.

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The combination of battery storage and solar is beginning to take off, and project developers are working to position themselves for more installations. Borrego’s new division recalls Tesla’s acquisition of SolarCity, announced this summer, but on a smaller scale. 

Borrego will focus on long-duration energy storage, which officials say is necessary to integrate renewables into the grid. 

“We’re realizing that all across our customer base—from cities, school districts and public agencies to businesses, manufacturers and electric utilities—it is more frequently making economic sense to evaluate energy storage in conjunction with solar,” said Berwick. “We knew that this technology shift was around the corner.”

Borrego’s storage unit will spend the next year focusing on developing megawatt-scale projects with utilities across the United States. “It’s something that our customers, electricity regulators and policymakers are asking for,” said Borrego Solar CEO Mike Hall.”

While Tesla has many residential offerings, the deal with SolarCity may yield even greater value in the utility sector. Last summer, Tesla founder Elon Musk told the annual convention of the Edison Electric Institute that he anticipates the utility-scale Powerpack storage product will comprise between 90% and 95% of Tesla’s total stationary storage sales.

On the residential side, Navigant has forecasted the 2025 North American market for residential solar PV plus energy storage nanogrids to be over 1.8 GW, with 30% to 40% of those nanogrids aggregated into virtual power plants. The use of solar and storage together in nanogrids is expected to continue expanding, leading to “new organized markets for ancillary services and efforts by utilities and grid operators alike to manage increased DER portfolios in ways that capture value upstream.”

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If Massachusetts acts on recommendations in the recently released report from the state’s Department of Energy Resources (DOER), the state could have a mandate for 600 MW of energy storage by July of next year. 

The DOER is in the process of forming a stakeholder group to discuss the details of what a storage mandate would look like, with a year-end 2016 target date for setting out its recommendations. If a mandate is approved, it would be put in place by July 12, 2017 with a target date of 2020.

However, the State of Charge report goes beyond the possible creation of an energy storage mandate and recommends a list of programs and projects, as well as policy changes that would facilitate the integration of energy storage into every aspect of the state’s grid. 

The report used tools from Alevo Analytics to model the state’s electric system and found that the total optimal amount of advanced energy storage would be 1,766 MW. “Advanced” storage in the report does not include pumped storage, though it was included in the simulations. Massachusetts has about 1,600 MW of pumped storage capacity.

The modeling showed that adding up to 1,766 MW of advanced energy storage would maximize Massachusetts’ ratepayer benefits to the tune of $2.3 billion. That would yield a benefit-cost ratio ranging from 1.7 to 2.4 for ratepayers. In addition to benefits for ratepayers, the modeling results also shows the potential for $1.1 billion in direct benefits to resource owners from market revenue.

The report identifies benefits from a range of functions that storage can provide, including energy cost reductions, reduced peak capacity, ancillary services cost reductions, transmission and distribution cost reductions and a greater ability to integrate renewable resources into the grid.

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Over the past several years, FERC has been actively engaged in trying to integrate energy storage into the operation of wholesale power markets.

Starting in 2011 with Order 755, FERC made room for fast responding resources like batteries in wholesale markets, and followed in 2013 with Order 784, which directed wholesale market operators to find ways to compensate fast response resources.

FERC’s announcement of a technical conference to look into storage issues in regional wholesale markets follows itsnotice in April seeking inputs from grid operators on barriers that might exist in those markets for energy storage resources.

The technical conference will examine how well storage resources fit into existing categories and if changes need to be made to better accommodate storage, which can perform services that can variously appear as supply or demand, sometimes simultaneously.

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As the California legislative session wound down, lawmakers voted on four separate bills aimed at giving a boost to energy storage.

AB 33 directs the CPUC to consider large-scale storage, specifically pumped hydro. The bill comes after the California ISO identified a need for fast-ramping, flexible resources to balance the grid and mitigate the potential impacts of over-generation from renewables.

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SDG&E was already bidding out storage projects when California regulators said they wanted to pick up the pace, allowing the utility to have the AES project on the table within months. The CPUC is pushing for expedited deployment to  avoid potential blackouts in the state, related to gas losses at the Aliso Canyon natural gas storage facility.

“We were in the process of a competitive solicitation for energy storage and already had completed a pre-evaluation of respondents,” SDG&E Chief Development Officer James Avery, “As a result, we could move quickly to respond to theCPUC’s request for expedited proposals.”

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The economic viability of commercial and industrial energy storage will grow rapidly in the United States over the next five years as storage costs continue to fall, according to a new report from GTM Research.

The report estimates that the economics for commercial energy storage could be attractive in as many as 19 states by 2021, up dramatically from the handful of states where commercial storage is economically attractive today.

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New York storage advocates want the state to set storage mandates, directing utilities to acquire battery resources in an effort to bring more renewable power online. The NY-BEST group filed in June with state regulators, according to Microgrid Knowledge, calling for a ramp-up in capacity from 500 MW in 2020, to 1 GW in 2022, and 2 GW by 2025, with 4 MW by 2030. 

The state’s 50% renewables goal would require about a quarter of peak load to be sourced from storage, the group said.

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