Smart Grid in California: The Value of Energy Storage and Permanent Load Shifting

Smart grid has become linked with topics of energy efficiency, renewables integration and climate policy. A smarter grid is one that utilizes communications and information systems to achieve more flexible grid operations. Energy storage and more broadly, load shifting, is one mechanism for achieving flexible grid operations. Unlike demand response, permanent load shifting moves energy on a regular basis, from peak to off-peak. Technologies that can deliver load shifting include thermal storage, electrical and mechanical storage and process shifting. This paper highlights findings from a recent study, mandated by a California Public Utilities Commission order, of permanent load shifting (PLS) opportunities located at customer sites in California. We developed a cost-effectiveness framework to estimate the costs and benefits of PLS technologies, demonstrated the framework with an analysis of PLS systems, and evaluated the market for PLS, including an assessment of challenges to expanding PLS. The cost-effectiveness analysis included a technology-neutral scenario analysis and an evaluation of technology-specific cases. Grid-level benefits of load shifting range from approximately $500–$2500/peak kW. Among the case studies, some approaches, such as refrigerated warehouse precooling, are cost-effective for both the utility and the consumer, while others, such as flow batteries, are not yet cost-effective and can be viewed as emerging technologies. Due to the wide range of technology costs and performance, these results are unsurprising. Still, PLS technologies can be one tool that can help set the stage for integrating large amounts of renewables in the future, a road California is paving.