Sierra Club praises decision that could pave the way for large-scale clean energy projects
March 7, 2012
The three-member Public Utility Commission of Texas approved groundbreaking new rules today that could pave the way for large-scale deployment of energy storage technology in the Texas market.
“These are exactly the types of policies that Texas must adopt so that our competitive energy market will drive the use of new technologies,” stated Cyrus Reed, Conservation Director of the Lone Star Chapter of the Sierra Club. “While this is just one of the barriers faced by energy storage technologies to compete in the market, it is one of the most important.”
Under the rules approved by the Commission today, large-scale energy storage technologies would only be required to pay wholesale prices for energy it uses to charge up, and those wholesale prices would be settled “at the node” without incurring additional ancillary charges that many “regular” energy users face.
By making the rules clear to investors, the rules should open up the Texas market to new technologies like CAES – Compressed Air Energy Storage – which utilizes electricity to compress air and store it underground in salt domes, where it is later released to turn turbines and produce electricity when it is needed. Thus, as an example, when wind energy in West Texas is cheap and plentiful at night, CAES could store that energy, and then release it during the day when energy is needed. Texas produced nearly 10% of its energy from wind in 2011, much of it at night and in the early morning when winds are strong. By combining this valuable wind resource with energy storage, the wind power can continue to be used in the afternoons, when winds generally die down.
Determining what CAES would have to pay for its electrical use was one of the major barriers to its development. Since the rule adopted today is technology-neutral, other technologies like large-scale batteries and fly-wheels will also benefit from these market clarifications.
Reed said the Commission has several opportunities to enact other policies that will help keep the lights on, including implementation of energy efficiency legislation (SB 1125), third-party ownership for solar (SB 981), implementation of a law from 2005 that requires Texas to produce at least 500 MW of renewable energy like solar and geothermal energy and moving ahead with pilot programs for energy storage and demand response.
“At a time when the Commission, ERCOT and stakeholders are spending hours debating whether to adjust the market prices and signals that are paid to traditional generators to incentivize putting more steel on the ground, it is actually these types of policies that clarify the rules for new technologies which will ultimately help us move toward new, clean and abundant forms of energy.”