New business models make energy storage attractive.
As policymakers and business leaders assign a higher priority to efficiency goals, companies are finding that the low-hanging fruit already has been picked in many areas. Reaching the next level might require some fundamental changes in regulatory policy and market models. Increasingly, regulators are focusing on the conflict between efficiency investments and volume-based ratemaking (see “Stimulating Efficiency”). But decoupling and negawatt rates won’t remove some of the most important barriers to system-wide efficiency improvements.
For example, distributed energy storage offers a host of efficiency benefits, including deferring or eliminating T&D investments; reducing the need for fuel-hogging spinning reserve; and increasing the reliability of variable generation sources, including wind and solar. But today, most utilities aren’t investing in grid-scale storage—not necessarily because of its capital cost, but because regulatory and market structures discourage it.