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An Important Greentech Bill You Need to Know: STORAGE

energystoragegenericAll eyes have been on the clean power and energy efficiency funds rolling out of the stimulus package, as well as the climate bill, and its cap-and-trade system, currently winding through the Senate. But a lesser-known bill — the Storage Technology of Renewable and Green Energy Act of 2009, or “STORAGE” (S. 1091) — that was introduced at the end of May, could offer crucial tax credits for one of the most important and overlooked aspects of building out a smarter grid: energy storage (FAQ on energy storage).

The bill is important enough that at the Infocast Storage Week conference earlier this month, Imre Gyuk, the Department of Energy’s program manager for Energy Storage Research, reportedly asked audience members to actively support the bill. The bill’s incentives, coupled with other funds for energy storage, could have massive potential to get more energy storage deployed, Gyuk said, according to John Petersen at Alt Energy Stocks.

Why is it so important? Here are the basics:

In the same way that tax credits have been an important part of boosting the installation of renewable energy generation, the storage bill would provide an investment tax credit of 20 percent for grid-connected energy storage with a size of at least 2 MWh that can deliver 500 kWh for 4 hours, and a 30 percent investment tax credit for residential energy storage gear. In addition, the bill would enable utility energy storage to be paid for by clean energy bonds.

According to a statement by Sen. Ron Wyden, who introduced the bill, tax credits could be used for “individual homeowners with plug-in hybrid vehicles,” businesses buying “thermal cooling systems,” (like Ice-Energy’s ice-powered cooling technology), and factories that want to “install biomass equipment to generate steam to power some of the machinery.”

Wyden’s purpose:

The bill will base the tax credit on the amount of energy stored, not the type of technology used. The goal is not to pick winners and losers, but to offer a broad range of incentives to foster innovation and installation. By providing tax incentives, the bill will create demand for renewable energy storage technologies.

Because energy storage has been largely neglected by federal incentives and investors, the STORAGE tax credits are receiving a warm welcome from energy storage entrepreneurs. Craig Horne, president and CEO of year-old company EnerVault, which is building flow batteries for the power grid, told us he was heartened to “see that the importance and value of distributed energy storage is being realized.”

But there are some aspects of the bill, and energy storage federal support in general, that entrepreneurs would like to see modified. Horne says he would like to see the 20 percent tax credit for grid-connected storage raised to 30 percent like the renewable energy tax credits, and the floor for the power rating of 500 kWh, be lowered to 250 kWh. Dileep Agnihotri, the CEO of energy storage device maker Graphene Energy, would like to see more energy storage incentives that would help pilot earlier stage technology like Graphene’s. “We will spend most money to go through the pilot stage…I wish I could get money to pilot the technology without going through investors,” said Agnihotri.

11 Responses to “An Important Greentech Bill You Need to Know: STORAGE”

  1. The demand for “cool” energy, which causes the electric peaks, is also the form of energy that is easiest and most cost effective to store. It turns out that air-conditioning for buildings accounts for about 30% of the peak electric demand on the grid in the summer months. By running the chillers at night and storing the cooling, approximately 30 to 40% of an office building’s on-peak electric load can be shifted “off-peak” with thermal storage cooling systems.

    While Thermal storage cooling has not typically been seen as a form of Electric Energy Storage since it does not store electrons though neither does pumped hydro or compressed air, however they are considered “electric storage”. Instead of storing potential energy (pumped hydro or compressed air) and then using it to make electrons, TES uses the plentiful and inexpensive, off-peak electrons, to very efficiently create and store “cooling”, in the form of ice or chilled water, the night before it is needed. The difference is simply when and in what form you are storing the energy. Granted you can’t run a motor with TES, however, those very large motors use for air-conditioning will no longer need those electrons during the day. Essentially you have simply committed the electrons for a designated purpose.

    The combination of thermal storage and the other types of electric storage technologies in this Storage Bill address the realities of our electric grid and customer requirements for clean consistent power.

  2. It would be helpful if the government’s efforts in storage contained provisions for developing the secondary markets for battery capacity. Specifically, if there was an incentive for utilities and others to establish a secondary market for partially depleted EV batteries, EV makers could more easily lease batteries to customers and reduce the overall costs (driving quicker adoption).

    Without a secondary market for batteries, “battery leasing” is really just “battery financing”, and doesn’t have the same benefit to consumers.

    (obviously the Better Place model enables battery leasing, because they effectively create their own secondary market, but that approach has other hurdles for manufacturers of EVs)

  3. Units count

    You need to learn your units. A system rated 2MW could deliver 500kW for four hours, not 500kWh for 4 hours. However what I think you meant to say was a system rated 2MWh which can deliver 500kW for 4 hours.