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Pumped hydro storage currently represents the largest share of storage in the United States, with 42 pumped hydro<br />

storage plants totaling about 22 gigawatts of installed capacity, which is equivalent to about 2 percent of U.S. electricity<br />

generation capacity. 25 There are currently an additional 37 gigawatts of projects that are in some stage of licensing at<br />

the Federal Energy Regulatory Commission (FERC). 26 The original pumped hydro storage plants were built to store<br />

power to release at peak demand. New technology (such as variable speed pumps) enable pumped hydro storage to<br />

provide ancillary services (i.e., functions that maintain the reliability of the grid); integrate variable renewables; and<br />

provide other services, such as restarting down generators during an outage. Under current market structures, options<br />

such as dispatchable natural gas are cheaper and faster to permit than pumped hydro storage. FERC has a pilot project<br />

underway to test a shorter 2-year licensing process for pumped hydro storage.<br />

Federal and State Activities to Promote Storage<br />

Department of Energy (DOE) support for valuation, early deployment, and education has contributed to storage adoption. For<br />

example, Federal Energy Regulatory Commission Order 755 cited a DOE lab study showing that “energy storage resources (such<br />

as flywheels and batteries) could be as much as 17 times more effective than conventional ramp-limited regulation resources”<br />

for providing frequency regulation. h The order requires payment for frequency regulation resources based on a resource’s speed<br />

and accuracy, i resulting in significant growth of storage installations in markets such as PJM. j The recent DOE Energy Storage<br />

Safety Strategic Plan addresses institutional barriers to enhance the safety and reliability of storage. k<br />

States have built on these advances to bring storage benefits to closer to the mainstream. California, home to multiple<br />

DOE-funded storage demonstrations, l, m, n has been aggressive with policies to promote storage, first with a program to<br />

incentivize behind-the-meter storage, and then with its storage mandate, which will require the state’s three utilities to deploy<br />

1,325 megawatts of storage by 2020. o In Hawaii, recent wind installations in Maui and Oahu have been paired with energy<br />

storage, p and Hawaiian Electric Company opened a solicitation for up to 200 MW of storage “to meet its goal of adding<br />

more renewable generation to the O‘ahu grid.” q Other states, including Arizona r and New York, s have approved or are actively<br />

encouraging their utilities to consider storage.<br />

h<br />

Makarov, Y.V. et al. “Assessing the Value of Regulation Resources Based on Their Time Response Characteristics.” Pacific<br />

Northwest National Laboratory. June 2008. In: 137 FERC 61,064. p. 35. 2011.<br />

i<br />

Federal Energy Regulatory Commission. “Frequency Regulation Compensation in the Organized Wholesale Power Markets.” 137<br />

FERC 61,064. 2011.<br />

j<br />

PJM Independent Market Monitor. “2013 State of the Market Report for PJM.” p. 305. 2013.<br />

k<br />

Department of Energy. “Energy Storage Safety Strategic Plan.” December 2014. http://energy.gov/sites/prod/files/2014/12/f19/<br />

OE%20Safety%20Strategic%20Plan%20December%202014.pdf.<br />

l<br />

Department of Energy. “Fact Sheet: Borrego Springs MicroGrid.” September 2013. http://www.sgiclearinghouse.org/sites/<br />

default/files/projdocs/1650.pdf.<br />

m<br />

Department of Energy. “Fact Sheet: Wind Firming EnergyFarm.” August 2013. http://energy.gov/sites/prod/files/Primus.pdf.<br />

n<br />

Department of Energy. “Fact Sheet: Tehachapi Wind Energy Storage Project.” May 2014. http://energy.gov/sites/prod/files/<br />

Tehachapi.pdf.<br />

o<br />

Maui Electric Company. “Contract with Auwahi Wind Energy LLC.” 2011.<br />

p<br />

Hawaiian Electric Company. “Request for Proposal (RFP# 072114-01) for 60 to 200 MW of Energy Storage for Oahu.” April 30, 2014.<br />

http://www.hawiianelectric.com/portal/site/heco/menuitem.508576f78baa14340b4c0610c510blca/?vgnextoid=03ebf2<br />

19fe9a5410VgnVCM10000005041aacRCD&vgnextchannel=a595ec523c4ae010Vgn VCM1000005c011bacRCRD&appI<br />

nstanceName=default.<br />

q<br />

California Public Utilities Commission. “Order Instituting Rulemaking Pursuant to Assembly Bill 2514 to Consider the Adoption<br />

of Procurement Targets for Viable and Cost-Effective Energy Storage Systems.” Decision 13-10-040. October 17, 2013.<br />

r<br />

Arizona Public Service Company and Residential Utility Consumer Office. “APS AND RUCO JOINT REQUEST FOR REVIEW.”<br />

DOCKET NO. L-00000D-14-0292-00169, Case No. 169. 9 26, 2014.<br />

s<br />

Consolidated Edison Company of New York. “Petition for Approval of Brooklyn Queens Demand Management Program.” 14-E-<br />

0302. 2014.<br />

QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 3-11

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