California Storage Portfolio Standards May Be a Great Kickoff

The California Energy Storage Alliance just issued a press release that describes new legislation to require utilities to incorporate energy storage in their distribution networks. The rules will mandate storage equal to 2.25% of daytime peak power by 2014 and 5% of daytime peak power by 2020. The press release is available here.

A quick check of the California ISO website forecasts a peak load of approximately 29,000 MW for tomorrow. If one assumes an average peak demand of 30,000 MW, a 2.25% storage, penetration would require an annual storage build of 135 MW per year in each of the next five years.

Using the average values reported in the Energy Storage for the Electricity Grid: Benefits and Potential Market Assessment report that I introduced last week, the incremental revenue to storage manufacturers from the sale of grid-scale storage systems in California would be worth roughly $200 million per year.

If the legislation is passed by the legislature and signed into law, the new storage portfolio standards will be great kick-off for the storage sector.

Disclosure: none