Significant efforts are underway in developing and promoting electricity storage. But there are a number of broad policy issues that are barriers to adoption of storage by the electric energy industry. And these policy questions arise in various forms depending on the context of where and how storage is being used.

On July 16, 2009, KEMA briefed the US Congress on policy issues impacting the development and adoption of electricity storage technologies and applications. KEMA was one of two speakers presenting at the “Road to the New Energy Economy” congressional briefing series sponsored by the National Science Foundation (NSF), Discover Magazine, the Instituteof Electricaland Electronics Engineers (IEEE), and the American Society of Mechanical Engineers (ASME).

“The nature of storage blurs the separation of one value chain position from another for purposes of regulatory treatment, market participation, and allowed business application,” said Dr. Ralph Masiello, KEMA senior vice president and global innovation manager. “Most incentive, cost recovery, market regulation and tariff decisions classify assets narrowly into the familiar spaces of generation, transmission, distribution, and consumer.”

Addressing electricity storage policy questions hinges, in part, on defining a new asset class. Possible solutions to the storage policy questions include investment tax credits, new cost recovery models and creating a favorable environment to bring distributed and community applications of storage to market.

National policy efforts in developing and promoting electricity storage currently underway include ARRA stimulus funding for large scale storage demonstration projects, loans and other funding for storage manufacturing, and expanded R&D in storage technologies, as well as extending tax credits to electricity storage under US Senator Ron Wyden’s Storage Technology of Renewable and Green Energy (STORAGE) Act of 2009 (S.1091).

The KEMA briefing paper summary, “Electricity Storage: Policy Issues,” is available for download at www.kema.com/storage-policy.