Press Release
Lumen Completes its Second Energy Storage Study for the CPUC
OAKLAND, California, August 5, 2024 – Lumen Energy Strategy, LLC has completed its second energy storage study for the California Public Utilities Commission (CPUC), required by CPUC Decision 13-10-040 and pursuant to California Assembly Bill 2514 (Skinner, 2010). The study report, Scaling Up and Crossing Bounds: Energy Storage in California, continues the CPUC’s examination of energy storage growth, performance in electricity markets, use cases, and policy pathways to unlock full value from this flexible and modular resource. The report concludes with a set of policy recommendations to the CPUC, which aim to address barriers to the realization of the benefits of energy storage, apparent in today’s market for energy storage.
Building from Lumen’s inaugural evaluation in 2023, Scaling Up and Crossing Bounds inspects the actual performance and benefits of grid-scale energy storage as it scales up from 1,100 MW in mid-2021 to about 7,500 MW by the end of 2023. The study also explores a set of “multiple use application” (MUA) case studies to better understand the unique attributes and benefits of community-level energy storage, connected to the distribution system, and its ability to serve both local and broader grid needs. Findings are detailed in the main report and supported by a set of technical appendices.
“The rapid growth of energy storage in California is in the context of incredible pressure to decarbonize and modernize the entire grid, to do so equitably, and to somehow address the increasingly palpable affordability crisis on ratepayers,” says Mariko Geronimo Aydin, the report’s co-author, “While transmission-connected batteries are doing much of the heavy lifting to integrate renewable generation in bulk, energy storage has so much more to offer in terms of tailored local, community-level, and customer-level services.”
The study finds continued significant growth in system benefits as large battery energy storage resources scale up to unprecedented levels on the CAISO system, but a lack of transparency in hybrid and customer-sited resources, and a need to adjust policies to actual operating performance. The study also finds that financial barriers to distribution-connected resources can be reduced with better integration in grid planning efforts and in the wholesale marketplace, and with full utilization of these resources’ value-stacking capabilities. These cross-domain multiple-use applications serve both local and broader system-level needs, and by doing so they provide a set of additional grid benefits that are beyond the capabilities of transmission-connected resources alone.
“We can’t afford to meet the demands of grid reliability, resilience, decarbonization, electrification, and modernization through siloed investment strategies,” says Cevat Onur Aydin, the report’s co-author, “Energy storage helps us better utilize renewable generation and the capacity of our existing wires. As the electricity system transforms, energy storage also gives us a way to surgically—and flexibly—build new resources with the right attributes, and in the right places, to reduce customer outage risks and to serve local grid needs. While we observe tremendous progress, we still have work to do to unlock the full potential of energy storage in California.”
Lumen Energy Strategy, LLC advises clients on investment and product strategy to meet business needs in a rapidly changing energy landscape. Lumen’s work is supported by market and policy intelligence, risk assessment, customized analytical tools, and deep industry expertise.
Building from Lumen’s inaugural evaluation in 2023, Scaling Up and Crossing Bounds inspects the actual performance and benefits of grid-scale energy storage as it scales up from 1,100 MW in mid-2021 to about 7,500 MW by the end of 2023. The study also explores a set of “multiple use application” (MUA) case studies to better understand the unique attributes and benefits of community-level energy storage, connected to the distribution system, and its ability to serve both local and broader grid needs. Findings are detailed in the main report and supported by a set of technical appendices.
“The rapid growth of energy storage in California is in the context of incredible pressure to decarbonize and modernize the entire grid, to do so equitably, and to somehow address the increasingly palpable affordability crisis on ratepayers,” says Mariko Geronimo Aydin, the report’s co-author, “While transmission-connected batteries are doing much of the heavy lifting to integrate renewable generation in bulk, energy storage has so much more to offer in terms of tailored local, community-level, and customer-level services.”
The study finds continued significant growth in system benefits as large battery energy storage resources scale up to unprecedented levels on the CAISO system, but a lack of transparency in hybrid and customer-sited resources, and a need to adjust policies to actual operating performance. The study also finds that financial barriers to distribution-connected resources can be reduced with better integration in grid planning efforts and in the wholesale marketplace, and with full utilization of these resources’ value-stacking capabilities. These cross-domain multiple-use applications serve both local and broader system-level needs, and by doing so they provide a set of additional grid benefits that are beyond the capabilities of transmission-connected resources alone.
“We can’t afford to meet the demands of grid reliability, resilience, decarbonization, electrification, and modernization through siloed investment strategies,” says Cevat Onur Aydin, the report’s co-author, “Energy storage helps us better utilize renewable generation and the capacity of our existing wires. As the electricity system transforms, energy storage also gives us a way to surgically—and flexibly—build new resources with the right attributes, and in the right places, to reduce customer outage risks and to serve local grid needs. While we observe tremendous progress, we still have work to do to unlock the full potential of energy storage in California.”
Lumen Energy Strategy, LLC advises clients on investment and product strategy to meet business needs in a rapidly changing energy landscape. Lumen’s work is supported by market and policy intelligence, risk assessment, customized analytical tools, and deep industry expertise.
To access the study report, stakeholder presentations, and other information please visit
www.lumenenergystrategy.com/energystorage.
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www.lumenenergystrategy.com/energystorage.
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