U.S. GOVERNMENT PUBLISHING OFFICE

27–431 WASHINGTON : 2019

S. HRG. 115–487 

EXAMINING THE STATUS OF ENERGY STORAGE 

TECHNOLOGIES, REVIEWING TODAY’S TECHNOLOGIES AND UNDERSTANDING INNOVATION 

IN TOMORROW’S TECHNOLOGIES 

HEARING 

BEFORE THE 

COMMITTEE ON 

ENERGY AND NATURAL RESOURCES 

UNITED STATES SENATE 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

OCTOBER 3, 2017 

( 

Printed for the use of the 

Committee on Energy and Natural Resources 

Available via the World Wide Web: http://www.govinfo.gov 
(II) 

COMMITTEE ON ENERGY AND NATURAL RESOURCES 

LISA MURKOWSKI, Alaska, Chairman 

JOHN BARRASSO, Wyoming 

JAMES E. RISCH, Idaho 

MIKE LEE, Utah 

JEFF FLAKE, Arizona 

STEVE DAINES, Montana 

CORY GARDNER, Colorado 

LAMAR ALEXANDER, Tennessee 

JOHN HOEVEN, North Dakota 

BILL CASSIDY, Louisiana 

ROB PORTMAN, Ohio 

LUTHER STRANGE, Alabama 

MARIA CANTWELL, Washington 

RON WYDEN, Oregon 

BERNARD SANDERS, Vermont 

DEBBIE STABENOW, Michigan 

AL FRANKEN, Minnesota 

JOE MANCHIN III, West Virginia 

MARTIN HEINRICH, New Mexico 

MAZIE K. HIRONO, Hawaii 

ANGUS S. KING, JR., Maine 

TAMMY DUCKWORTH, Illinois 

CATHERINE CORTEZ MASTO, Nevada 

BRIAN HUGHES, Staff Director 

PATRICK J. MCCORMICK III, Chief Counsel 

DR. BENJAMIN REINKE, Professional Staff Member 

ANGELA BECKER-DIPPMANN, Democratic Staff Director 

SAM E. FOWLER, Democratic Chief Counsel 

SPENCER GRAY, Democratic Professional Staff Member 
(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Murkowski, Hon. Lisa, Chairman and a U.S. Senator from Alaska .................. 1 

Cantwell, Hon. Maria, Ranking Member and a U.S. Senator from Washington .................................................................................................................... 3 

WITNESSES 

Sprenkle, Dr. Vincent, Manager, Electrochemical Materials and Systems 

Group, Pacific Northwest National Laboratory ................................................. 5 

Kathpal, Praveen, Vice President of Global Market Development, AES Energy 

Storage, and Chair of the Board of Directors, Energy Storage Association .... 14 

Moores, Simon, Managing Director, Benchmark Mineral Intelligence ............... 24 

Seifarth, John, Head of Engineering, Voith Hydro, Inc. ...................................... 33 

ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED 

Abraham, David S.: 

Statement for the Record ................................................................................. 115 

Cantwell, Hon. Maria: 

Opening Statement ........................................................................................... 3 

Kathpal, Praveen: 

Opening Statement ........................................................................................... 14 

Written Testimony ............................................................................................ 16 

Responses to Questions for the Record ........................................................... 100 

Moores, Simon: 

Opening Statement ........................................................................................... 24 

Written Testimony ............................................................................................ 26 

Responses to Questions for the Record ........................................................... 105 

Murkowski, Hon. Lisa: 

Opening Statement ........................................................................................... 1 

Seifarth, John: 

Opening Statement ........................................................................................... 33 

Written Testimony ............................................................................................ 35 

Responses to Questions for the Record ........................................................... 111 

Sprenkle, Dr. Vincent: 

Opening Statement ........................................................................................... 5 

Written Testimony ............................................................................................ 7 

Responses to Questions for the Record ........................................................... 92 

Williams, Jasmine: 

Letter for the Record ........................................................................................ 119 

Zeigler, Colin: 

Statement for the Record ................................................................................. 120 

(1) 

EXAMINING THE STATUS OF ENERGY STORAGE TECHNOLOGIES, REVIEWING TODAY’S 

TECHNOLOGIES AND UNDERSTANDING INNOVATION IN TOMORROW’S TECHNOLOGIES 

TUESDAY, OCTOBER 3, 2017 

U.S. SENATE, 

COMMITTEE ON ENERGY AND NATURAL RESOURCES, 

Washington, DC. 

The Committee met, pursuant to notice, at 10:32 a.m. in Room 

SD–366, Dirksen Senate Office Building, Hon. Lisa Murkowski, 

Chairman of the Committee, presiding. 

OPENING STATEMENT OF HON. LISA MURKOWSKI, 

U.S. SENATOR FROM ALASKA 

The CHAIRMAN. Good morning. The Committee will come to 

order. 

We had originally scheduled a business meeting of the Energy 

Committee to consider two nominees for the Department of Energy 

(DOE), but we have not been able to arrange for a sufficient number of members to advance them, so we will alert members to when 

we will take that up, likely after the next scheduled vote. It is my 

understanding there are no votes scheduled for today, so I do not 

anticipate that we will have this today. It is my intention, again, 

to try to advance not only these nominees out of Committee but 

those that have been moved to the Floor so that hopefully we can 

get some of the teams filled up. 

Today we are here to conduct an oversight hearing to consider 

the status and the future of energy storage technologies. We have 

all heard about the benefits that can be associated with the deployment of energy storage, including increased grid reliability and resilience. As we think about ‘‘reliability and resilience,’’ we recognize 

they really have taken on even greater meaning in the wake of several recent natural disasters. 

Of course, our prayers continue to go out to all those who have 

been impacted, whether they be in Texas, Louisiana, or Florida 

and, of course, those who are facing the most desperate situation 

right now and those are the Americans that live in our island territories. Puerto Rico and the U.S. Virgin Islands are in a state of 

emergency right now. Our top priority is to make sure that local 

residents have food, water, medicine, and shelter. 

I have notified all members of this Committee as well as the Appropriations Committee that we are looking to travel to the area 

as soon as the situation has stabilized enough for us to do so. I 
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would also anticipate that we will be holding a hearing about the 

status of the recovery and our options for rebuilding. 

There are some quick steps we can take, like the confirmation of 

well-qualified nominees with expertise that can be put to use in the 

response effort. Bruce Walker, who was before the Committee last 

week as the nominee to lead the Department of Energy’s Office of 

Electricity, I think, is a pretty good example of that. But there are 

also some longer-term steps that we can take and that we should 

already be thinking about. 

At the top of that list is how we can help rebuild the grids of 

Puerto Rico and the Virgin Islands. While the Virgin Islands’ grid 

is not in as difficult of shape as Puerto Rico, I think we recognize 

that the situation on the ground is something that needs to be addressed. We urgently need to restore electric power, but we also 

need to be looking for ways to make those grids more reliable and 

more resilient than ever before. Energy storage really has to be 

considered in that conversation, just as it has been part of our policy conversations here in the Committee throughout this year. 

In June, we held a hearing on cost trends in emerging energy 

technologies that included energy storage. We learned a little bit 

about how costs are decreasing while opportunities are increasing. 

Shortly after that, we had a field hearing in Cordova, Alaska, to 

learn how hybrid microgrids can facilitate the integration of various renewable resources while reducing costs and increasing reliability. I tell my colleagues here on the Committee all the time, so 

many of our remote communities in my state are completely disconnected from a traditional grid. We truly are islanded in that sense. 

We are innovating in some unique ways, bringing local resources 

together to decrease dependence on expensive diesel generation. So 

whether it is 60 below in Alaska and you are trying to stay warm, 

or 100 above somewhere in the South and trying to stay cool, we 

need reliable and resilient systems, and storage technologies like 

flywheels and batteries are vital to making them work. 

Today’s energy storage technologies are finding market applications for a host of different value streams that they provide such 

as frequency regulation, spinning reserve, load leveling, peak shaving, power quality, and capacity firming. 

We have a lot to gain by advancing energy storage technologies, 

but that will also require innovative solutions to some very real 

challenges. Each type of energy storage technology has its own specific physical attributes, based on the physics that enables it. These 

can be well-suited for certain applications, but perhaps not so wellsuited for others. 

Today’s burgeoning lithium-ion battery markets, and other future 

energy storage technologies, will also provide serious challenges to 

our minerals supply chains. We already import at least 50 percent 

of 50 different mineral commodities. We cannot allow that to worsen as these technologies grow in use. 

Once energy storage technologies are designed and manufactured, they also have to carve out market applications that match 

the value streams that they can provide. So we need to ensure that 

federal policies do not unintentionally hinder the evolution of markets for this sector. 
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Energy storage offers great opportunities and I think we need 

technologies, resource supply chains, and markets that are prepared to take full advantage of them. 

I look forward to hearing about the successes of today’s technologies and learning more about what we expect to see in the future. 

I thank the gentlemen who have agreed to join us here this 

morning on our panel. With that, I turn to Senator Cantwell for 

her comments this morning. 

STATEMENT OF HON. MARIA CANTWELL, 

U.S. SENATOR FROM WASHINGTON 

Senator CANTWELL. Thank you, Madam Chair, and I look forward to hearing from our witnesses today. 

I, too, want to mention that we need to keep vigilant on the situation in Puerto Rico, as a Committee that has jurisdiction over that 

as a territory. I am hoping today that with the President’s visit he 

will make a full declaration of emergency for the entire island. I 

know that there are some municipalities for which the declaration 

has not been formally made, but I hope it isn’t because we don’t 

have communication lines between those municipalities to make 

that. 

As somebody who has seen a lot of natural disasters in my state, 

I am telling you that getting the declaration done as soon as possible is key. And we just need to flatten that issue as quickly as 

possible. 

I still think we need a coordinator at the White House level for 

all the various agencies that are going to have to work on the recovery of Puerto Rico, and so I hope that the White House will still 

continue that. And I hope that one of the large shipping employers 

in both of our states, who has offered to get large-scale generators 

to Puerto Rico that could help provide much of the necessary power 

grid opportunities, will be taken advantage of very shortly. So, lots 

of work to do there, and thank you for your attention to that. 

Today’s hearing about storage as a new platform is an incredible 

machine opportunity with what we call ‘‘the grid.’’ The grid was 

named one of the greatest inventions of the 21st century by the National Academy of Engineering, and it was a platform that had so 

many advances to it. Just like roads or waterways or communication networks, it is a great enabler. 

We can think of storage like we think of the grid itself. Just as 

the grid has become a platform for innovation, storage can be part 

of a platform for the new innovative grid. Deployed across the grid 

with new battery storage technologies, the whole grid and its delivery system, if you will, can be turned upside down. 

We in the Northwest dream of that, as it relates to probably 

more electric cars per capita than anybody in the nation. Why? Because we also have the cheapest electricity, and people dream of 

the fact that those could become storage vehicles, in and of themselves, and sell back onto the grid with the right enabling technology and thereby become a whole platform unto itself. 

So, like a Swiss Army knife, storage can perform more functions 

as a single element than any other part of the grid and that scale, 
4 

this flexibility, will create a new kind of system. It will open the 

possibilities of things we can’t even see today. 

We are starting to see growth in storage that we’ve already seen 

in renewables. Last year, 100 percent year-over-year growth in 

storage; today, prices for lithium-ion vehicle batteries have dropped 

80 percent from six years ago; and in five years, GTM Research 

forecasts seven gigawatts of new storage, or 20 times higher than 

last year. 

So, storage is here, and I’m sure that’s what our panelists will 

tell us. And it’s going to get even better and cheaper. 

Federal funding will accelerate this innovation, and federal support can bridge the gap between basic research and commercial 

sales. 

Now is not the time to be slashing our research budget. For example, the President has proposed cutting DOE’s Office of Electricity storage program by 61 percent. 

Meanwhile, Secretary Perry has embraced an obsolete view of 

the grid. On Friday, he asked FERC to adopt a radical proposal. 

This proposal would bail out coal and nuclear power plants at the 

expense of everyone else, raising electricity rates for other consumers. Natural gas, renewables, efficiency, storage, and most importantly, consumers, would all lose out in this proposal. I hope 

FERC rejects his unsolicited, backward proposal. Instead, FERC 

can accelerate removing policy barriers to new technologies, such 

as how to work with storage in the marketplace. 

So I look forward to hearing from our witnesses today about this 

particular opportunity that’s in front of us, and I hope that we can 

also draw lessons from the tragedy that we are seeing in Puerto 

Rico as it relates to what we can do to move forward to give us 

more opportunities to be more resilient and to build stronger efficiencies into our system. 

Thank you, Madam Chair. 

Senator STABENOW. Madam Chair, if I might? 

The CHAIRMAN. Senator Stabenow. 

Senator STABENOW. Thank you very much. 

I will be going back and forth between the Finance and Energy 

Committees this morning, and if I am not able to get back I would 

like very much to enter questions into the record. I just would ask 

consent to do that, if I am not able to get back. Hopefully, I am 

going to be able to do that, but I am attempting my spot of ‘‘beam 

me up Scotty’’ and trying to be two places at once, as we always 

do. 

So, thank you. 

The CHAIRMAN. We understand that and appreciate your interest. Of course, your questions for the record will be included. 

Thank you for your interest in the importance of storage. 

We are joined this morning by four individuals, all experts in 

their respective areas. 

We will lead off the panel this morning with Dr. Vincent 

Sprenkle, who is the Technical Group Manager for the Electrochemical Materials and Systems Group at one of our national laboratories, Pacific Northwest National Laboratory (PNNL). Welcome. 
5 

He will be followed by Mr. Praveen Kathpal, who is the Vice 

President for AES Energy Storage. He is also the Chair for the 

Board of Directors for the Energy Storage Association. Welcome. 

Mr. Simon Moores is with us. He is the Managing Director for 

Benchmark Mineral Intelligence. We will hear about the intersection between critical minerals and energy storage. 

Our last panelist this morning is Mr. John Seifarth, who is the 

Director of Engineering at Voith. 

Welcome to all of you. 

Dr. Sprenkle, if you would like to lead off the panel this morning? 

STATEMENT OF DR. VINCENT SPRENKLE, MANAGER, ELECTROCHEMICAL MATERIALS AND SYSTEMS GROUP, PACIFIC 

NORTHWEST NATIONAL LABORATORY 

Dr. SPRENKLE. Thank you, Chairman Murkowski, Ranking Member Cantwell and members of the Committee. I appreciate this opportunity to testify today. 

My name is Dr. Vincent Sprenkle, and I manage the Electrochemical Materials and Systems Group at Pacific Northwest National Laboratory in Washington State. 

The research being conducted at PNNL is at the forefront of energy storage R&D and our scientists have been critical to innovations developed under several DOE programs, including the Office 

of Science’s Joint Center for Energy Storage Research and the Office of Electricity’s Energy Storage Program. In addition, PNNL is 

leading the vehicle technologies program Battery500 consortium, 

targeting a two to three times increase in the range of electric vehicles for the same weight of batteries we have today. 

Across these programs, PNNL scientists leverage a unique suite 

of tools and facilities to develop prototypes and validate the performance of next generation battery systems. Since 2009, our staff 

have issued 375 peer-reviewed publications and been awarded 45 

U.S. patents that have been licensed to 20 companies. 

For the past eight years, my focus has been on grid-scale energy 

storage and that will be what I have in my testimony today. 

As you had indicated, the past decade has seen tremendous 

growth in the energy storage market for both transportation and 

grid-scale batteries. Even with this growth, battery deployments 

still make up less than 0.1 percent of the U.S. electrical capacity 

and significant R&D challenges remain across the technical readiness spectrum that can lower the cost and improve the value proposition of energy storage. 

Under the DOE Office of Electricity program, PNNL researchers 

have been instrumental in accelerating the development of technologies that will enable storage to have a greater role in improving the reliability, the efficiency, and resiliency of the electrical 

grid. 

The program is closely aligned with the 2013 DOE Grid Energy 

Storage report, which identified four major challenges: cost competitive technologies, improved safety and reliability, standardized 

valuation methods, and industrial acceptance. 

While the falling cost of lithium-ion batteries have enabled energy storage to be deployed on the grid for high value applications, 
6 

other technologies like redox flow battery systems may ultimately 

prove to be lower cost and longer life solutions. 

In 2010, PNNL researchers developed an improved vanadium 

redox flow battery electrolyte. Variations of this work have been licensed now to eight companies, including UniEnergy Technologies, 

or UET, who now employs over 60 people. To date they have installed 18 megawatt hours of commercial systems in the U.S. and 

abroad with another 365 awarded or under contract. 

What’s exciting about this is this technology has managed to 

achieve or come close to the cost parity with lithium-ion in about 

five years of commercial development compared with the 25 years 

it took for lithium-ion to achieve that same area. 

The new chemistries we are developing today have the opportunity to even further reduce that cost structure. The U.S. R&D pioneered the innovation between most modern battery technologies, 

including the widely-used lithium-ion. We believe future R&D leadership in energy storage will require continued commitment across 

the following areas: one, integrated science and technology investments from advanced characterization and design tools of those 

next generation systems to experimental testing and validation can 

deliver technologies that meet the cost and technical requirements 

of a majority of grid applications; accelerating the commercialization of breakthrough technologies requires new manufacturing 

paradigms that can be developed that quickly move these ideas 

from the innovation to systems level that are cost-effective and can 

be validated; regional technology demonstrations with federal and 

state support are needed to build user confidence; and the technology can enable utilities across the country to more effectively 

and efficiently deploy the technology. 

Finally, standardized valuation methods that accurately capture 

the value of energy storage for utilities and regulators are needed 

along with advanced controls that seamlessly integrate with different technologies and enable more autonomous operation. 

In conclusion, we have seen energy storage make a significant 

impact in the market, but there is a continuing need across the entire innovation spectrum to reduce the cost and increase the performance to realize the full potential of the benefits energy storage 

can provide. 

Unlocking the full potential of U.S. researchers to address the 

fundamentals of energy storage, discover new materials, and rapidly translate these discoveries into practical applications is necessary to ensure the U.S. remains a leader in this technology. 

Thank you and I look forward to any questions you may have. 

[The prepared statement of Dr. Sprenkle follows:] 
7 

Written Statement of 

Vincent Sprenkle, Ph.D. 

Manager 

Electrochemical Materials and Systems Group 

Pacific Northwest National Laboratory 

Before the 

United States Senate 

Committee on Energy and Natural Resources 

October 3, 2017 

Chairman Murkowski, Ranking Member Cantwell, and Members of the Committee, thank you 

for the opportunity to testify in today' s hearing on energy storage technologies. 

My name is Dr. Vincent Sprenkle, and I manage the Electrochemical Materials and Systems 

Group at Pacific Northwest National Laboratory (PNNL) in Washington State. PNNL is a U.S. 

Department of Energy (DOE) multi-program national laboratory stewarded by the Office of 

Science. At PNNL, my group is focused on developing the next generation of battery 

technologies for energy storage applications and this will be the focus of my testimony. 

My comments today will focus on three main areas: 

1. Key technology breakthroughs achieved through PNJ'<'L's work on grid energy storage 

and how we have transferred those breakthroughs to the private sector. 

2. Energy storage materials research being conducted at PNNL for next-generation electric 

vehicles. 

3. Future research and development (R&D) directions for energy storage. 

Background 

The past decade has seen tremendous growth in the energy storage market, with significant 

increases in the number of energy storage systems sold for both the electric vehicle and 

stationary energy storage markets. Even with this growth, battery energy storage for 

transportation and grid-scale storage is still an early-stage application market. For example, in 

2016, 160,000 electric vehicles were sold in the U.S.-accounting for roughly 1 percent of the 

17 million vehicles sold. After a year of record growth, battery solutions for the stationary 

energy storage market are projected to reach 395 megawatts by the end of2017 but will still only 

account for less than 0.1 percent of U.S. generation capacity. While additional robust growth in 

both battery storage markets is anticipated, significant R&D needs and opportunities remain for 

innovations across the technology-readiness spectrum that can lower the cost of energy storage 

while increasing performance, safety, and reliability. 

The research being conducted at PNNL is at the forefront of energy storage R&D. It includes 

fundamental characterization of battery materials, development of next-generation materials to 

improve the desired performance of the battery, and creation of analytical models that can 

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accurately represent the technical and economic impacts of real-world applications on battery 

performance. 

DOE's Office of Electricity Delivery and Energy Reliability (OE) and Office of Science are the 

primary sponsors of grid energy storage research at PNNL. OE funds R&D of next-generation, 

cost-competitive energy storage technologies and works with industry stakeholders to ensure 

these systems are safe, reliable, and can meet the technical and economic needs of industry-all 

of which are essential to moving energy storage technologies to market. The Office of Science 

supports fundamental research in cutting-edge in situ characterization tools and first-principle 

materials design efforts, which are foundational to the development of the next generation of 

energy storage systems. These systems can ultimately cost less and perform better than the 

technology that is deployed today. 

Energy storage R&D for next-generation electric vehicle batteries is supported at PNNL 

primarily by the DOE Energy Efficiency and Renewable Energy's Vehicle Technologies Office 

and is focused on developing and demonstrating new battery chemistries that can deliver two to 

three times greater energy density-resulting in longer driving range and lower cost compared to 

today' s lithium-ion batteries. 

Scientists at PNNL are able to leverage a unique suite of tools and facilities-from the advanced 

materials characterization instruments at the Environmental Molecular Sciences Laboratory (a 

DOE user facility) to PNNL's Advanced Battery Facility-to develop, prototype, and validate 

the performance of next-generation battery systems. For example, using the Environmental 

Molecular Sciences Laboratory's capabilities, PNNL is pioneering in situ characterization 

techniques that enable real-time evaluation of functioning electrochemical couples under 

transmission electron microscopy imaging and Nuclear Magnetic Resonance spectroscopy. 

These tools allow scientists to see the atomic and molecular processes that influence battery 

performance and lifetime, and they help us understand how battery materials are changing under 

actual charging and discharging conditions. These techniques are being applied today to several 

new hattery materials being developed for DOE and industry clients and will provide the world 

with unparalleled insight into how various battery chemistries change during operation. 

This research already is benefiting the nation. Since 2009, PNNL energy storage researchers 

have issued 375 peer-reviewed scientific publications and have been awarded 45 U.S. patents, 

which have been licensed to more than 20 companies. This research has been instrumental in 

accelerating the development of technologies that will enable storage to play a greater role in 

improving the reliability, efficiency, and resiliency of the electric grid and increase the driving 

range of electric vehicles. 

Grid Energy Storage Research 

Electric energy storage has long been a "holy grail" for grid operators-technology that can cost 

effectively improve the resiliency, reliability, security, and robustness of the power grid. Gridscale energy storage presents a distinct set of opportunities and technical challenges. OE's 

Energy Storage Program supports a wide range of R&D and has identified four development 

priorities in its 2013 DOE Grid Energy Storage report. 

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Those priorities, which guide OE' s investments in this area, are: 

• The development of cost-competitive technologies through targeted scientific 

investigations of key materials and systems. 

• Validated reliability and safety by independent testing of prototypic devices and 

understanding of degradation. 

• Enabling standardization of energy storage valuation through industry, utility, and 

developer collaborations to quantify benefits and provide input to regulators. 

• Industrial acceptance by facilitating highly leveraged, early-stage field demonstrations 

and development of storage system design tools. 

Cost-Competitive Technologies: Falling costs oflithium-ion batteries and redefinition of market 

rules have enabled a significant increase in the amount of energy storage deployed for grid 

applications, such as short-duration frequency regulation. While lithium-ion chemistries were not 

designed specifically for grid services-and we don't fully understand the impacts of these 

services on their lifetime-they have proven the technical and economic viability of energy 

storage on the grid. Other battery technologies, like redox flow systems, may ultimately be a 

lower-cost alternative and contain sufficient energy capacity to enable these systems to meet 

multiple grid applications. 

PNNL' s pioneering work in vanadium redox flow batteries, which enabled a 70 percent increase 

in energy density and an 83 percent increase in temperature stability, overcame several of the 

barriers limiting flow battery commercialization, including cost competitiveness. Variations of 

this successful technology already have been licensed to eight companies. One such company, 

UniEnergy Technologies (UET), was started by two former PNNL scientists in 2012 and 

currently employs more than 60 workers at its facility, north of Seattle, Washington. To date, 

UET has installed 18.5 megawatt hours of commercial systems in the U.S. and abroad, and has 

an additional 365 megawatt hours under contract or award. This technology is starting to achieve 

cost parity with lithium-ion at a systems level after only five years of development-compared 

with the more than 25 years that lithium-ion cells have been in production. PNNL is currently 

developing the next generation of redox flow batteries, focused on replacing the vanadium 

species with engineered aqueous-soluble organic molecules that could further decrease the cost 

of flow battery systems by another 50 percent. 

Validated Safety and Reliability: For energy storage systems to be ubiquitously accepted, the 

technology must be demonstrated to be safe and reliable. A scientifically-derived knowledge 

base must be developed and disseminated to industry that improves our understanding of the 

predictability of storage systems under a wide variety of conditions and enables the engineering 

of safer and more reliable systems. These efforts form the basis of new protocols, codes, and 

standards that ensure large-scale grid storage can be deployed safely and reliability. 

At PNNL, researchers are evaluating the impact of grid services on battery performance and 

understanding how changes in the materials and interfaces are impacting the expected lifetime 

and safety of the systems. Along with Sandia National Laboratories, PNNL leads an Energy 

Storage Safety Working Group with stakeholders in the storage industry to focus R&D activity 

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related to safety and to facilitate the development and deployment of codes, standards, and 

regulations affecting energy storage system safety. These efforts are critical to building 

consistency and uniformity in evaluating and ultimately deploying new battery technologies. 

Enabling standardization of energy storage valuation: Science and technology efforts are 

critical to the deployment of energy storage, but alone cannot achieve the end state goal. Utilities 

at all levels-consumer-owned, investor-owned, municipalities-must have the capacity to 

understand the value of energy storage. State regulators need the same tools and data sets with 

which to evaluate energy storage, so they can provide the type of policy environment that leads 

to deployment. 

Value propositions for grid storage often depend on identifying the institutional and regulatory 

hurdles to deployment and understanding how storage benefits can be evaluated when compared 

to other grid resources. At PNNL, staff are working with public service commissions across the 

country to provide the technical information needed to accurately evaluate the net benefits 

storage can provide to the system. In Washington and Oregon, PNNL is working with utility 

commission staff to develop planning tools that can both capture the monetized and nonmonetized benefits of storage and provide an analytics framework for integrated resource 

planning that can accurately evaluate storage benetits. 

This work complements research undertaken by the Grid Modernization Laboratory Consortium 

(GMLC), a strategic partnership between DOE and 12 national laboratories. The GMLC is 

developing a framework for valuation of the new grid technologies and concepts, including 

energy storage, so that government and industry stakeholders can work together to assess the 

benefits and costs of resilience improvement strategies. This partnership between DOE, national 

laboratories, states, and industry is an important collaboration in charting a timely path to a more 

resilient U.S. power system. 

Industrial Acceptance: Demonstrating the economic value, performance, and reliability of earlystage energy storage systems in both controlled and fielded deployments is critical to achieving 

new technology validation. As part of Washington State's Clean Energy Fund, PNNL is 

performing technical and economic use case analyses, dispatch optimization, and performance 

monitoring in collaboration with five regional utilities that are deploying energy storage 

technologies for improved renewables integration and enhanced resiliency. This analysis will 

form the framework for systems-level analysis tools that can be used by utilities, regulators, and 

industry to accurately capture the locational value (monetized benefits and avoided costs) of 

energy storage deployments. 

Most of the 3,000 utilities, municipalities, and cooperatives located in the US. have limited-or 

no-R&D budget to examine the benefits of storage. PNNL, along with partners at Sandia 

National Laboratories and Oak Ridge National Laboratory, is actively engaged in helping 

utilities understand the locational benefits energy storage can provide to their systems by 

developing analytical models that accurately capture the entire benefit proposition. As part the 

GMLC, PNNL staff recently completed a detailed analysis with Portland General Electric (PGE) 

on its 5 megawatt/1.25 megawatt hour Salem Smart Power Energy Storage Demonstration 

project. This study showed that PGE could utilize the facility for the Western Energy Imbalance 

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Market to derive an additional $150,000 in revenue every year, and that additional benefits could 

be realized as the energy capacity of the battery was increased to 10 times its cmTent durationresulting in clear economic value and performance increase while providing additional reliability 

to the system. Under the same project, our partner laboratories are working with Electric Power 

Board of Chattanooga, Tennessee to add energy storage to its automated power management 

system to form one of the most advanced smart grids in the country and serve as a living 

laboratory for future grid modernization technology. 

Energy Storage Research for Electric Vehicles 

Making electric vehicles with smaller, lighter, less expensive batteries requires research across 

multiple DOE programs. The Joint Center for Energy Storage Research (JCESR), funded 

through DOE's Office of Science, undertakes fundamental research to serve as a foundation to 

develop game-changing, next-generation battery technologies. Argonne National Laboratory 

leads JCESR, which includes other national laboratories, universities, and industry partners. 

DOE's Battery500 Consortium, funded through DOE's Energy Efficiency and Renewable 

Energy Office, is focused on doubling the energy storage of existing battery materials while also 

producing a high-performance battery that is reliable, safe, less expensive, and can be easily 

adopted by manufacturers. This is a significant challenge requiring technical expertise across the 

U.S. R&D sectors and PNNL, as lead of the Consortium, has the support of partners including 

other national laboratories, universities, and industry. 

DOE's investments in advanced energy storage technologies will transform vehicle 

transportation. Today, lithium-ion batteries are the dominant technology for electric vehicles. On 

average, it takes 4.5 pounds of batteries to travel one mile. Meeting the Battery500 goals would 

enable that same 4.5 pounds of batteries to travel 2.5 miles, thereby increasing the overall 

range-or decreasing the cost of the electric vehicle when the range is kept constant To 

accomplish this goal, the Consortium's aim is to double the "specific energy" of electric vehicle 

batteries. "Specific energy" measures the amount of energy packed into a battery based on its 

weight Current batteries contain approximately 200 watt-hours per kilogram and will need to 

achieve 500 watt-hours per kilogram by the end of the program. 

To meet the goals of the Battery500 Consortium, a novel approach is being used that integrates 

the best materials and battery researchers across the country to solve some of the most difficult 

science and technology challenges. For example, the Consortium will require replacing graphite 

with lithium-metal as the battery's negative electrode. Fundamental research will aim to 

understand how this new electrode interacts with other battery components and how to control 

those interactions to achieve the desired performance with a lifetime comparable to today's 

technology. 

Future Research Directions 

The US. pioneered the development of modern battery technologies, including the widely used 

lithium-ion batteries. Our leadership in this area is constantly challenged as the appetite for 

energy storage is growing around the world. Maintaining a leadership position in the next 

generation of energy storage technologies requires a continued commitment across the following 

areas: 

5 
12 

• Science and technology investments: Sustained fundamental science and applied 

research is necessary to improve the tools and techniques available to develop the next 

generation of safe, low-cost, high-performance energy storage technologies. We cannot 

predict, based on scientific principles alone, the performance, safety, and reliability of 

new battery systems. Continued and focused research capable of understanding new 

energy storage systems at the component and interfacial level is required to address these 

challenges. New breakthroughs, based on these fundamental understandings, will take 

many years to ultimately yield low-cost, high-performance, and safe batteries for all 

applications. Ongoing developments in applied sciences-including sophisticated 

capabilities in materials synthesis, battery design/agile manufacturing, testing validation, 

and predictive computational tools, such as are available at DOE's national 

laboratories-are also required to move these technologies closer to practical realization. 

Integrated science and technology investments across the spectrum of fundamental 

science and applied research will ultimately yield technologies that can meet the cost and 

technical requirements of the market. 

• Advanced Manufacturing!Prototyping: To accelerate the commercialization of 

breakthrough technologies, new manufacturing R&D is required to quickly move ideas 

from innovation to energy storage systems that are manufactured in the U.S. Common 

manufacturing architectures that provide a platform to accelerate the innovation coming 

out of universities, national laboratories, and small business can enable next-generation 

storage technologies to be validated and tested quickly and with minimal development 

time. There also must be a focus on the applied sciences to prototype and test these new 

systems at small-scale under real-word grid operating conditions. This is of particular 

impotiance for grid-scale storage, since the reliability and lifetime of new systems must 

be fully validated and understood before entering service on the grid. The information 

gained from this testing also provides the feedback loop needed for scientists and 

engineers to continue closing the gap between the often high theoretical potential of a 

new material and the much lower practical energy storage capacity and lifetime 

demonstrated in real-world systems. 

• Technology Demonstrations: Given the vast difference in expected lifetimes for grid 

storage (20-30 years) and transportation (5-7 years), additional technology 

demonstrations for grid technologies will be needed across the country to build 

confidence in the performance, lifetime, safety, and benefit to multiple low-cost grid 

applications. Energy storage demonstrations are taking place now with most new 

technologies receiving federal or state funding to share the risk with utilities. Continued 

demonstrations of energy storage in different regions of the U.S. builds confidence that 

energy storage is a viable technology option and can provide multiple grid services. 

Demonstrations that focus on validating life-cycle cost, performance, and safety for 

multiple grid applications, and that assess the overall benefit relative to grid reliability, 

resilience, and renewable integration, are critical to both long-term and near-term success 

in getting energy storage technology deployed on the grid. Additionally, with federal and 

state support, the lessons learned from these demonstrations can be shared across the 

entire utility community to enable those utilities with limited resources and opportunity to 

more effectively and efficiently determine where energy storage can contribute to their 

6 
13 

grid applications. 

• Analysis ami Control Systems: As the world moves towards a more decentralized 

electricity infrastructure, the impact of both electric vehicles and grid storage as a part of 

the suite of distributed energy resources (DER) must be analyzed and optimized to 

maintain desired reliability. Each of the more than 3,000 utilities in the US. will have 

different challenges and will recognize different benefits depending on the location and 

mix of these DER assets. Most utilities have little or no R&D capacity to fully analyze 

and determine the impacts of new energy storage systems or the increased adoption of 

electric vehicles. Uniform codes and standards-voluntarily accepted by industry-that 

allow interoperability between different technologies and software interfaces are required 

to ensure that new technologies can plug-and-play into the existing grid operations 

system when and where they are most needed. Advance controls must be developed that 

can autonomously determine the state of health of the energy storage system and 

determine the optimal energy dispatch parameters to reduce degradation and derive 

maximum value from the device. These control systems must be able to coordinate with 

other DER assets to aggregate for a specific service or function (e.g., islanding for 

resiliency). Finally, demonstration programs that can implement large-scale testing and 

validation of these control systems are needed to help instill user confidence and ensure 

the desired resiliency of the distributed energy assets. 

Conclusion 

While there is significant convergence of electric vehicles and grid storage as the grid utilizes 

a greater number ofDER assets, the materials challenges for these systems are distinctive. 

While there are initial high-value-added market applications for energy storage today, there 

is a continuing need to reduce the cost and increase the performance to realize the full set of 

benefits energy storage offers. For large-scale battery systems to continue finding widespread 

application in the grid, they must ultimately reach costs and lifetimes comparable with other 

grid assets. This requires ultra-low-cost materials capable of being deployed for over 20 

years. For electric vehicle applications, a different set of materials will provide the increased 

energy density needed to double their driving range in the future. Unlocking the full potential 

of US. researchers to address the fundamentals of energy storage, discover new materials, 

and rapidly translate these discoveries into practical applications is necessary to ensure that 

the US. remains a leader in energy storage technologies. 

Thank you again for the opportunity to testify. I look forward to answering any questions you 

may have. 

7 
14 

The CHAIRMAN. Thank you, Dr. Sprenkle. 

Mr. Kathpal, welcome. 

STATEMENT OF PRAVEEN KATHPAL, VICE PRESIDENT OF 

GLOBAL MARKET DEVELOPMENT, AES ENERGY STORAGE, 

AND CHAIR OF THE BOARD OF DIRECTORS, ENERGY STORAGE ASSOCIATION 

Mr. KATHPAL. Thank you, Chairwoman Murkowski, Senator 

Cantwell and distinguished members of the Committee. 

My name is Praveen Kathpal. I’m the Vice President of Market 

Development for AES Energy Storage, and I’m Chair of the Board 

of Directors of the Energy Storage Association. 

AES is a Fortune 200 company, headquartered in Arlington, Virginia, and we operate in 17 countries and 15 U.S. states. We have 

over 10 years of experience building and operating utility-scaled, 

battery energy storage systems. 

I’m honored to testify in front of you today on the topic of energy 

storage and its role in the electric power sector. 

Energy storage technologies are vital for transforming our electric grid. Energy storage sits at the intersection of several trends 

shaping the future of electricity: the electrification of transportation, increased adoption of renewable energy, and an aging generation fleet. 

As an industry, we are mobilizing around this growing opportunity. We expect the need for energy storage solutions globally to 

grow to ten times the size of today’s market in the next five years. 

And as a company, AES recently announced a partnership with 

Siemens to create a U.S.-based joint venture that will take energy 

storage technology and services to customers in over 160 countries. 

While there are several mature and emerging energy storage 

technologies, AES believes that batteries, lithium-ion batteries in 

particular, are best suited to serve the mainstream needs of the 

electricity industry because the technology is mature, it is available 

at low cost, and it is manufactured at a massive scale. The industry is coalescing around this technology with lithium-ion batteries 

representing over 95 percent of new energy storage installations in 

the past two years. 

One of the constant challenges the electricity industry faces is capacity planning, having enough power generation capacity to meet 

demand during the moments when demand is the highest. The old 

way of solving this problem by building new gas-fired peaking 

power plants will lock a generation or two of electricity customers 

into paying for expensive plants that will outlive their usefulness. 

Imagine buying a rotary phone and being stuck with it for the next 

30 years, even after the iPhone was available. 

By 2030, the U.S. needs another 40,000 megawatts of peaking capacity which translates to spending about $45 billion building new 

power plants that will only be used a few hours per year. 

Fortunately, there is a better way. AES is currently building 

what will be the largest battery facility in the world in Long Beach, 

California. It was selected by the utility’s Southern California Edison among many other choices to provide peaking capacity because 

it was the most economic option. 
15 

This is a proof point that energy storage is cost-effective when it 

is seriously considered as an alternative and that it is available at 

a scale where it can truly substitute for building new power plants. 

Recently, a utility in Arizona partnered with AES to use a battery when meeting peak demand in a small, remote town at half 

the cost it would have taken to upgrade the long power lines serving the town. 

Unfortunately, energy storage does not always get a fair shake. 

Most existing power markets or planning and procurement mechanisms do not appropriately weigh energy storage as an alternative 

to building new power plants or power lines. 

At the Energy Storage Association, we are working closely with 

the Federal Energy Regulatory Commission, utility companies, 

state regulators, and other stakeholders to remove structural barriers that favor legacy technologies, improving access for energy 

storage, and increasing competition. Smart policies that reduce 

these barriers will accelerate consumers benefiting from reduced 

costs, improved reliability and resilience and cleaner air. 

Madam Chairwoman, thank you again for the opportunity to testify today. I would like to invite you and the other members of the 

Committee to visit any of our battery energy storage facilities in 

the U.S. 

I look forward to your questions. Thank you. 

[The prepared statement of Mr. Kathpal follows:] 
16 

Praveen Kathpal 

Vice President 

Global Market Development 

AES Energy Storage 

October 3, 2017 

Testimony of Praveen Kathpal, Vice President of Global Market Development of 

AES Energy Storage Before the U.S. Senate, Committee on Energy and Natural 

Resources- Full Committee Hearing to Examine Energy Storage Technologies 

Thank you, Chairwoman Murkowski, Ranking Member Cantwell and Distinguished 

Members of the Committee. My name is Praveen Kathpal and I am Vice President of 

Global Market Development at AES Energy Storage and serve as Chair of the Board of 

Directors for the Energy Storage Association, the leading national voice of the United 

States energy storage industry. I am honored to testify in front of you today on the topic 

of energy storage and its role in the electric power sector. 

Background on AES Energy Storage 

The AES Corporation is a Fortune 200 company headquartered in Arlington, Virginia 

that provides affordable, sustainable energy to U.S. states including Ohio, West Virginia 

and California, territories like Puerto Rico and the Virgin Islands, as well as in 16 other 

countries including the Dominican Republic, Chile, Brazil, the Netherlands and Northern 

Ireland. AES was founded more than 35 years ago with a focus on how to think 

differently about technology, business models and market structures to deliver 

innovative solutions to customers. There is no better example of our approach to 

innovation than in our energy storage business. 

In 2007, AES Energy Storage was founded as a subsidiary of AES to commercialize 

applying battery technology to the electric grid. Ten years ago, battery-based energy 

storage on the grid was viewed as experimental, and did not exist as a business 

opportunity. We knew the technology and the solution would be viable, economic and 

profitable on its own. We designed and built the first megawatt-scale lithium-ion battery 

energy storage project in Indianapolis, integrating two large containers of batteries to 

prove that large-scale battery-based energy storage could connect to an electric grid, 
17 

2 

operate as a complete system, and respond to a remote signal to charge or discharge 

the battery_ 

Since then, AES has been recognized as the world leader in utility-scale battery energy 

storage systems, and we have found a business case for storage in every market we 

have entered. 

Today, energy storage is a proven solution and is operating successfully across the 

country and in many overseas markets. AES continues to be a market leader and 

pioneer new uses of grid-scale battery energy storage. To fuel future growth, earlier this 

year Siemens and AES announced we will partner to create Fluence, a new, U.S.-

headquartered global energy storage technology and services company that unites the 

scale, experience, and reach of its two parent companies to lead the next growth phase 

for storage -taking this vital technology to more customers in over 160 countries 

around the world. 

Industry Context 

Energy storage sits at the center of global trends shaping the electricity industry, in 

particular the acceleration electrification of our society and adoption of renewable and 

distributed energy sources. 

Electricity is fundamental to everything we do, representing nearly 40 percent of U.S. 

end-user energy use, with transportation and industrial fuel use representing an 

additional 51 percent, two sectors expected to increasingly electrify in the coming years. 

According to the International Energy Agency, 2015 saw the number of electric vehicles 

on the road surpass 1 million, a major milestone, a number projected to jump to 530 

million globally by 2040. As we continue to pursue the electrification of transportation 

and other industries, our need for clean, reliable, and affordable electricity will continue 

to increase. 

Energy storage is also the key enabler of the integration of greater amounts of 

renewables into the electric power system, answering consumers' and businesses' 

growing demand for clean energy. Wind and solar will account for 64% of new power 

generating capacity added globally over the next 25 years. AES' view is that increasing 
18 

3 

access to low-cost, reliable electricity drives economic growth and furthers our mission 

of improving lives. 

Today, our electric power system is lagging behind every other vital societal network in 

terms of efficiency, reliability and flexibility. IHS Markit studied four critical networks -

data, travel, perishable goods and natural gas - and found that each had storage 

amounting to at least four days' worth of demand, and even years' worth in the case of 

data networks. The electric network has only 20 minutes. In the key networks IHS 

studied, incorporating storage across the network ensured availability, enabled greater 

network responsiveness, improved resiliency, and increased utilization of existing 

assets. 

Energy storage is vital for transforming our electric grid so it can meet the needs of a 

rapidly changing energy landscape, as we electrify industries and increase our adoption 

of renewables and distributed generation. Adding storage unlocks the full potential of 

the electric power system, increasing access to abundant clean energy. 

It also enables us to address today's power system challenges such as the United States' 

aging electricity infrastructure. The United States' electric power generation fleet is 

aging with a growing segment in need of replacement The average generation asset 

has been in service 28.7 years, and 20% of capacity have been in service for 45 years 

or longer. In addition, the U.S. transmission and distribution grids are also aging and 

utilities are ramping up investments to modernize them, with spending having ballooned 

from $10.2 billion in 2010 to $20.1 billion five years later. Unexpected retirements of 

nuclear generating stations and other conventional energy infrastructure facilities have 

put pressure on utilities and policymakers to find other resources - in cases within 

months - to maintain reliability. The threat of extreme weather events only exacerbates 

these needs. 

AES believes that battery technology, lithium-ion in particular, is uniquely suited to 

address these issues. Lithium-ion technology is mature with a 25-year history operating 

in consumer electronics and more robust industrial applications including transportation. 

The electric power sector is now benefiting from safety advances from electric vehicle 

applications, lithium-ion technology's robust global supply chain and the collective 

research and development investment of a global network of leading companies, many 

of whom have been our technology partners over the past 1 0 years. Rapid lithium-ion 

adoption has driven down costs for lithium-ion batteries dramatically, with prices 
19 

4 

having dropped 73% over the last 7 years and are projected to decline another 72% by 

2030. 

Business Opportunity for Battery-Based Energy Storage 

Battery-based energy storage is a unique tool for the electric power sector because it 

manages to solve three problems at once- the need to lower costs, to lower emissions, 

and to improve reliability and resilience. 

Energy storage lowers costs to utilities and their customers by avoiding the need to 

build new gas-fired peaking power plants, and by avoiding or deferring transmission and 

distribution infrastructure needs. It can be built in right-sized increments rather than the 

typical lumpy investment profile where large generation or grid assets are built in 

anticipation of future demand growth, the occurrence of which is increasingly uncertain. 

Energy storage also enables utilities and power generators to operate existing 

generating assets and transmission and distribution lines more efficiently. Lastly, 

storage is fuel-agnostic, meaning utilities can charge their facilities with the lowest-cost 

energy sources. 

Those lowest-cost energy sources are increasingly the cleanest as well -solar and 

wind installations represented more than 60% of new U.S. electric generating capacity 

installed in 2016 and 55% of new capacity installed globally in the same year. Energy 

storage is increasingly seen as an enabling technology to accelerate the adoption of 

renewable energy. 

Having enough power generation capacity to meet demand during peak time periods is 

a growing need for the industry, with 41 GW of peaking capacity needed nationwide by 

2030, representing $45 billion in generation infrastructure investment That total 

includes regions with more concentrated needs such as 5 GW in the Southwest, 4 GW 

in the Midwest and 10 GW in the Southeast Investor-owned electric companies are 

also planning to invest approximately $56 billion on modernizing transmission and 

distribution infrastructure in 2017. In both cases, energy storage offers a costcompetitive, flexible resource utilities are already finding can help them meet these 

needs. 

Commercial Cases for Utility-Scale Battery Energy Storage 
20 

5 

Two utilities in the western U.S. are leading the way on harnessing energy storage for 

these key grid needs. In 2014, Southern California Edison, the largest utility in our most 

populous state, was facing the retirement of older natural gas-fired power plants and the 

unexpected retirement of a large nuclear power plant. They needed to select new 

sources of capacity to meet their customer's needs. SCE ran a procurement solicitation 

in which energy storage was compared against gas-fired generation, demand response 

and other resources. They awarded AES the world's first long-term contract to provide 

peaking capacity from a battery-based energy storage facility in Long Beach, California. 

This plant will be able to provide 100 MW of power for four continuous hours, directly 

substituting for the need to build a new gas-fired peaking plant. It was selected by SCE 

on an economic basis, meaning that it will provide the capacity at a lower net cost to 

SCE's customers than obtaining the same amount capacity from a traditional gas-fired 

peaking plant. SCE's decision in this case was a watershed proof point for the 

economics, scale, and technology maturity of battery-based energy storage to meet 

electric system needs. 

Arizona Public Service recently partnered with AES to become one of the first electric 

utilities in the country to choose energy storage to avoid the need to rebuild 

transmission and distribution poles and wires serving a small town 90 miles outside of 

Phoenix where peak electricity demand is increasing. By placing a relatively modest 

sized battery array at the end of the last 20-mile segment of power line, APS will save 

its customers the cost of rebuilding those lines, which cross over difficult terrain. When 

not being used to serve customer demand, the battery system will provide additional 

benefits like voltage regulation and delivery of excess solar power, as well as the 

capability to add additional storage as needed, all at a similar cost. In a number of 

cases, energy storage enables utilities to defer or avoid entirely investments in a variety 

of fundamental, single-function grid assets like wires, poles, transformers and 

substations, and in the process, get the most value from the transmission and 

distribution lines they already own and use. As communities across the U.S. and 

elsewhere around the globe work to modernize their electric grids, utilities are beginning 

to recognize that energy storage enables them to think more broadly about their 

investment options and strategy. 

Deploying battery energy storage also provides significant value on small, isolated grid 

systems like those in Northern Chile, where AES has deployed three arrays. They 
21 

6 

work in concert with conventional generation sources to provide grid stability, and an 

instant response to disturbances in the grid, such as when a large power plant or 

transmission line suddenly stops working. These applications are similar to how energy 

storage would be used in island or microgrid applications, where many energy 

resources need to work in concert with each other, and energy storage fills the gaps 

between supply and demand to ensure the reliable and efficient delivery of electricity, 

often avoiding the need to burn diesel fuel in generators, the predominant source of fuel 

in remote areas. 

Battery energy storage can also be deployed in mere months to answer unexpected 

capacity needs. In 2016, when a critical natural gas storage facility providing peak 

reserve capacity near Los Angeles had to be taken out of service, the California Public 

Utility Commission (CPUC) directed Southern California investor-owned electric utilities 

to fast-track additional energy storage options to enhance regional energy reliability. In 

response, SDG&E expedited ongoing negotiations and contracted with AES Energy 

Storage to build two projects for a total of 37.5 MW of 4-hour duration lithium-ion battery 

energy storage. The larger project, a 30 MW facility built in Escondido, Calif., is 

currently the world's largest li-ion battery installation, and both the Escondido project 

and a smaller 7.5 MW installation was built in El Cajon were completed and online in 

eight months. Battery-based energy storage can to be deployed in months compared to 

the years required for traditional assets, which enabled southern California's utilities 

unparalleled flexibility to meet their local capacity needs. 

In addition, energy storage adds resilience and can protect electric grids during extreme 

weather events. In the last month, Hurricanes Irma and Maria- Category 4 and 3 

hurricanes on the Saffir-Simpson scale, respectively- impacted the Dominican 

Republic on September 7th and 21st, 2017 and stressed the local grid. AES had just 

deployed two 10-megawatt energy storage arrays on the Dominican grid, and as each 

hurricane approached the island, the grid operator requested that both systems be kept 

online and operational during the storm to help maintain grid stability. Conditions on the 

Dominican electric grid were volatile during both hurricanes as generation, transmission, 

and distribution networks were damaged or shut down. Both of the energy storage 

arrays responded as intended and helped keep the grid operating throughout the storm, 

even with nearly 40 and 55 percent of the Dominican Republic's generation assets 

forced to shut down during Hurricane Irma and Hurricane Maria, respectively. 
22 

7 

Policy Drivers to Accelerate Energy Storage Adoption 

We are seeing important state and federal policy developments that will accelerate the 

adoption of energy storage by lowering barriers to entry, and fostering competition 

between energy storage and conventional solutions to meet electricity system needs. At 

the federal level, we are pleased to see the proposed rulemaking from the Federal 

Energy Regulatory Commission that would provide fair and equal access for storage 

resources to wholesale power market products and services. We are also pleased to 

see FERC provide the direction that storage resources providing a transmission function 

can seek cost recovery through cost-based and market-based rate structures. We 

believe these are important policy initiatives at FERC that can create lasting wholesale 

market changes that fully value the unique capabilities that storage brings and to 

encourage consideration of storage use for infrastructure needs. 

We also see a lot of recent momentum in state policy. States like California, Oregon and 

Massachusetts have instituted storage targets to accelerate adoption and realization of 

benefits to rate payers. Many other states including Nevada, New York, Maryland, 

Colorado, and Minnesota are actively pursuing storage studies of their own and 

considering further policy guidance for grid planners. In New Mexico, the state's Public 

Regulation Commission introduced a rule to include energy storage in utility integrated 

resource planning studies. Similarly, in Washington state, the Utilities and 

Transportation Commission is working on a policy statement that would encourage 

utilities to evaluate storage as an alternative when procuring new power capacity or 

upgrading their infrastructure. At AES, we believe that these types of state policies can 

be widely replicated to accelerate energy storage adoption across the country. 

The Department of Energy has a few limited programs currently which provide 

technical, economic, and grid integration analysis and technical support related to 

energy storage. We believe that directing those analyses at real generation, 

transmission, or distribution problems will accelerate the adoption of storage as a costeffective alternative to conventional electricity system investments. Expanding these 

programs or providing support directly to utilities, state public utility commissions, 

independent system operators and regional transmission organizations, reliability 

entities, state energy offices, and consumer advocates to analyze storage in state and 

regional context for generation, transmission, and distribution planning, will accelerate a 
23 

8 

more efficient level of storage investment. Areas where we currently see good analyses 

or programs looking at the right programs are: 

• National Renewable Energy Laboratory work on the capacity value of energy 

storage and production cost modeling of energy storage benefits; 

• Pacific Northwest National Laboratory work on energy storage in integrated 

resource planning; and 

• Office of Energy Efficiency and Renewable Energy Analytical Support Program 

for State Public Utility Commissions work on the consideration of energy storage 

in integrated resource planning and transmission and distribution planning. 

Chairwoman Murkowski, thank you again for the opportunity to testify today - I would 

like to invite you and the other Members of the Committee to visit any of our storage 

facilities in the United States. I am happy to take any questions. 

Thank you. 
24 

The CHAIRMAN. Thank you, Mr. Kathpal and thank you for the 

invitation. 

Mr. Moores, welcome. 

STATEMENT OF SIMON MOORES, MANAGING DIRECTOR, 

BENCHMARK MINERAL INTELLIGENCE 

Mr. MOORES. Thank you very much, Chairman Murkowski, Senator Cantwell, members of the Committee. I very much appreciate 

allowing myself to speak on, really, the supply chains going into 

these, to make these lithium-ion batteries. 

My name is Simon Moores. I’m Managing Director of Benchmark 

Mineral Intelligence, and we spend most of our time further up 

from where the battery cells are actually produced. We go from the 

battery cell plants to the mines and everywhere in between to 

track data, price data, market data, numbers on the industry, 

what’s happening in the real world. 

I want to outline the states of play in the lithium-ion battery industry which, obviously, are extremely relevant for energy storage, 

as the applications you mentioned, which would be stationary utility storage and then also, most importantly, electric vehicles. 

And so, from our perspective we’re in the midst of a lithium-ion 

battery arms race around the world. Over the last three years 

we’ve seen these lithium-ion battery megafactories which are battery plants above one gigawatt/hour capacity rise everywhere. 

It started with the Tesla Gigafactory in Nevada, but now we 

have 17 of them worldwide. And they continue to be popping up everywhere. The key thing is not just the size of growth that we’re 

about to see in the lithium-ion battery industry, we expect that to 

go from 80 gigawatt/hours in 2016 to between 550 and 650 

gigawatt/hours demand by 2025, but it’s the impact this is having 

on the raw material supply chains. 

So these are critical raw materials that go into these battery 

cells: lithium, graphite, cobalt and nickel. And it’s important to understand these raw materials, not as commodities as we would 

probably be familiar in understanding minerals and metals but 

specialities. These are niche industries. These are tailored chemicals and materials that go into batteries, and the industries have 

to go from the niche to the mainstream. 

So the production of these raw materials and these intermediate 

products have to come in order of magnitude bigger over a very 

short period of time, between five and seven years, in order to meet 

the demands from the auto companies and from the energy storage 

facilities as well. This means money, quite frankly. 

For example, we’ve seen the lithium price increase four times in 

the last two years just because there isn’t enough supply to meet 

demand driven by the battery sector. In this recent price spike lithium has raised about $1 billion, but really between $7 and $10 billion ago, we need it to fuel this energy storage revolution, to actually get the batteries into production, into the market. So that’s a 

complete change in how these mineral industries operate. 

Where we stand today, China is not only at the center of mass 

market electric vehicles, but it is at the center of all of these supply 

chains. It’s not just where the resources lie, but it’s actually the 

key steps, the battery grade processing steps along that supply 
25 

chain, that really, we have to be focusing on trying to control, as 

a development and deployment of these electric vehicles, but cathode production, battery grade production and building out of new 

cells of capacity. 

So of the megafactories mentioned, 64 percent of that capacity is 

being built in China. Only 13 percent so far is being built in the 

U.S. This could change over time as new plants get planned. 

We’re at the beginning of this energy storage revolution which, 

I think, everybody really agrees with that one. This is powered by 

lithium-ion batteries initially, the energy storage based on the utility storage space, should I say, will have many opportunities for 

other batteries, such as vanadium flow, as well. 

So there are many risks and many opportunities and we’re just 

starting, but I’m happy to answer to any questions you have and 

very much appreciate your time. 

[The prepared statement of Mr. Moores follows:] 
26 

BENCHMARK 

Tuesday J'd October 2017 

Written Testimony of Simon Moores, Managing Director, Benchmark Mineral 

Intelligence 

For: US Senate Committee on Energy and Natural Resources Committee 

Hearing: Tuesday, October 3, 2017, at 10:30 a.m. EDT in Room 366 of the Dirksen Senate 

Office Building in Washington, DC. 

Subject: Energy storage technologies and the supply chain risks and opportunities 

Thank you for inviting me to this hearing on energy storage technologies to give my 

independent, market-focused perspective on the opportunities and risks in the supply chains. 

Energy storage is not a new concept. We store energy in our phones, laptops and power 

tools every day and recall and use this energy on demand. 

However, the widespread adoption of energy storage - most critically in our vehicles and for 

our homes, offices and energy distribution networks - is only just gathering pace owing to 

low cost, abundant lithium ion battery cells. 

This trend was given impetus by rise of the lithium ion battery megafactories, a term created 

by Benchmark Mineral Intelligence to describe the widespread expansion of battery cell 

production capacity around the world. Huge battery plants are now being constructed that 

are an order of magnitude larger than their predecessors. 

In 2014, Tesla announced their Gigafactory in Nevada with 35GWh of new cell production 

the equivalent of 500,000 pure electric vehicles (EV). At the time, this was the first ever plant 

to have a capacity over 10GWh. 

This sparked a global battery arms race that has now spread to 17 megafactories in the 

pipeline, 9 of which are in China and only 2 of which are based in the US. In terms of 

production capacity from these megafactories, China will have 64% and the US only 13%. 

The remainder of the planned plants are in Korea, Poland, and Sweden. 

Despite this new 289GWh of capacity adding to a global lithium ion cell production of 

BOGWh in 2016, according to Benchmark Mineral Intelligence data, the industry is still 

drastically short of capacity to meet projected demand of 550-650 GWh of battery cells by 

2025. 
27 

The lithium ion megafactories are coming ... 

35GWh 34GWh 

.. 

These lithium ion batteries will be targeted for use in the two largest growth markets, EV and 

stationary/utility storage- the two uses that underpin the energy storage revolution. 

Both markets are in their infancy. However, as these applications mature over the next 10 

years, the scale of application and its disruptive effect on established auto and energy 

industries will be unprecedented. 

Pure electric vehicles- from cars to electric buses - are only entering the market place 

today and are all are based on the lithium ion battery technology. 

Consumer choice of pure EVs, vehicles that are 100% battery powered and where a 

combustion engine plays no part, are beginning to become numerous. For example, 2017 

saw the launch and/or rolling out of the pure EVs of Tesla's Model 3, Chevrolet's Bolt and 

Nissan's new LEAF. 

These are the first sub-$35,000 pure EV offerings for the consumer and has ushered in the 

era of the semi-mass market EV. 

As we approach 2020, we are seeing every single major auto manufacturer announcing 

aggressive pure EV plans all based on lithium ion. 

Volkswagen Group, Daimler/Mercedes, Toyota, and Honda, for example, are all planning 

selling lithium ion powered EVs in the millions of units annually post-2020. Meanwhile, the 

trend in e-buses has also started to gain traction outside of China due to the efforts of 

California-based Proterra. These e-buses have lithium ion batteries up to ten times the 

capacity of EVs. 

The second major energy storage trend is one of stationary I utility storage. At Benchmark, 

we see the utility storage sector where EVs were in 2009: a limited number of installations 

around the world with industry momentum increasing. 

2 
28 

Rise of lithium ion technology 

The lithium ion battery is not new technology; however, its widespread commercial use has 

until now been limited to portable personal technology (cell phones, laptops, power tools), 

hybrid vehicles and a handful of EVs. 

Lithium ion technology being used is not one battery but a selection of different lithium ion 

types or chemistries; the ones of note are: 

• Lithium Cobalt Oxide (LCO) used in portable technology 

• Nickel Manganese Cobalt (NMC) used in EVs and utility storage devices 

• Nickel Cobalt Aluminium (NCA) used in EVs 

These chemistries are all lithium based, despite the naming convention, and the critical raw 

material inputs are: lithium, graphite, cobalt and nickel. 

While other metals are also used in a lithium ion cell such as copper and aluminium, the 

speciality nature of the afore mentioned minerals and metals increases the complexity of the 

supply chains. It needs to be clearly understood the need to process these elements into a 

battery grade chemical derivative product that is tailored for each customer. 

In short, we are dealing with niche, speciality chemicals and minerals rather than 

commodities. The biggest challenge for this handful of specialities is scaling the supply chain 

from the mine to the battery plant in time to meet demand from the auto manufacturers. 

Lithium: a speciality, volume problem 

Lithium, the highest profile input into a lithium ion battery, is sourced from Chile, Argentina 

(brine extraction) and Australia (traditional rock mining) and is also processed into battery 

grade material in the US and China. 

Lithium carbonate and lithium hydroxide are the base chemicals that the battery industry 

seek, the industry's demand profile is increasing 10-fold in a 10-year period. Demand 

pressures from the battery industry have already forced prices of these chemicals up four 

times in the last two years and it is a rising price trend that is continuing today. 

In 2016, lithium carbonate equivalent (LCE) used in lithium ion batteries equated to 75,000 

tonnes. By 2025, battery demand will be 550-600,000 tonnes. A complete evolution of the 

industry is required to take lithium from the niche into the mainstream. 

Not only does lithium need to scale its extraction capacity but also its battery grade 

processing capacity to meet the requirements of battery customers - an additional, 

specialised step. 

The US has two major players in the lithium industry: Albemarle Corp and FMC Lithium are 

among the world's largest lithium producers sourcing predominately from Chile and 

Argentina brine operations, respectively. Both producers have processing capacity in North 

Carolina. 

In terms of lithium resources, the US produces lithium chemicals from a small brine 

operation in Nevada. Clayton Valley is one hotspot of exploration for new lithium brine 

together with the Arkansas Smackover oilfield brine resource. Recent hard rock exploration 

for spodumene in North Carolina has also occurred in a bid to secure domestic US lithium. 

3 
29 

Graphite: an anode processing problem 

Graphite anode, the largest input into a lithium ion battery in kilograms, has a similar scaling 

issue. Graphite in batteries comes from two sources, naturally mined flake graphite and 

synthetic, man-made graphite. 

In 2016, graphite anode used in lithium ion batteries equated to 100,000 tonnes. By 2025, 

battery demand will be 780,000 tonnes. 

Natural flake graphite mining is dominated by China with 62% of global production in 2016, a 

position only Brazil can compete with producing 23% of the world's 650,000 tonnes. This 

flake graphite is then sent to spherical graphite plants - all of which are presently located in 

China - to be processed into anode material. 

Just under 60% of the lithium ion battery industry's anode is derived from natural graphite 

with synthetic graphite- produced from graphitizing petroleum coke and tar pitch at very 

high temperatures- accounts for -40%. 

Due to lower production cost, environment and C02 impact issues, and ease of scaling 

supply, battery customers are trending towards using more natural graphite anode in their 

cells but are still blending with synthetic graphite. The knowhow in blending different anode 

materials with differing raw material signatures is a skill and intellectual property that will 

separate out the leaders of the pack. 

While large flake graphite mines are being developed outside of China in Mozambique, 

Canada and the US, processing capacity to make anode material is still lagging. The US has 

two graphite companies seeking to mine and process flake graphite for battery grade 

material in Alabama and Alaska. 

Cobalt & Nickel 

Cobalt is the second highest profile battery raw material mainly because 64% was mined by 

the Democratic Republic of Congo (DRC) in 2016 and because China dominates the refining 

step in the supply chain with 57% of global capacity. 

Headlines regarding cobalt mined illegally in DRC have dominated the cobalt discussion 

despite the portion of illegal material in the market being relatively low and under 10% of 

global supply which was 93,000 tpa in 2016. 

However, illegal cobalt in the supply chain has greatly concerned end users of batteries 

mainly owning to the corporate social reasonability impact on their businesses. 

Major end users have moved to try to eliminate illegal cobalt from the supply chain and this 

has opened opportunities for developers of new mines based in US (Idaho), Australia and 

Canada that could guarantee the provenance of their raw material. 

In addition, cobalt's geological occurrence as a secondary mineral to nickel and copper 

means that its produced as a by-product of these metals. Only one small primary cobalt 

mine in the world is in operation in Morocco. 

This means the fortunes of cobalt- now driven by battery demand - is still at the mercy of 

nickel and copper commodities which is driven by industrial demand. This is causing long 

term planning issues for the EV supply chain. 

Cobalt used in lithium ion batteries equated to 48,000 tonnes in 2016 but this is set to 

increase to 180,000 tpa by 2025. While opportunities for producers' external to DRC are 

4 
30 

available, the sheer volume of new supply needed by the market means there will be no EV 

industry without DRC cobalt. 

Most of refining to a battery grade cobalt chemical will occur in China. 

Nickel - a raw material associated with cobalt but also mined individually- is growing in 

importance for a lithium ion battery consumer. The trend of using more nickel in a cathode 

and less cobalt is one that is just beginning in the commercial lithium ion space. 

For NMC formulations -a chemistry that will be the number one format in the EV and utility 

storage space- the industry has traditionally used a 1:1:1 formula -1-part nickel, 1-part 

manganese and 1-part cobalt. 

However, 5:2:3, 6:2:2 and 8:1:1 nickel-rich formulations are now being introduced into lithium 

ion battery production lines around the world. 

This is a move that will see battery grade nickel demand grow from 75,000 tpa in 2016 to 

anywhere between 300-400,000 tpa by 2025 depending on which chemistries take hold. 

While nickel metal is a commodity that is produced in the millions of tonnes a year, the 

battery grade chemical material is specialist with only a handful of major producers outside 

of China including Japan's Sumitomo Metals Mining, which operates mines and processing 

plants, and Belgium's Umicore. However, the vast majority of battery grade nickel sulphate is 

produced in China. 

Interest in the market has seen major nickel miners such as Vale, BHP Billiton, and Rio Tinto 

seek to enter the battery grade space. However, not all nickel deposits can produce a 

commercially viable battery grade material. High and lower grade class 1 nickel deposits are 

the most suitable yet the most capital intensive to move into production. 

Competing technologies to lithium ion 

Vanadium flow: 

For stationary storage applications, vanadium flow batteries have been the most talked 

about as best-in-class for this application due to its lifetime versus lithium ion. 

The challenge for this market is finding a champion for the technology with only a handful of 

producers competing for market share. The upfront cost of the technology is more expensive 

than lithium ion and despite offering a longer life time, this is discouraging some buyers. 

Vanadium flow is heavily reliant on vanadium raw material that is processed into vanadium 

pentoxide form. Vanadium raw material output totalled 72,000 tonnes in 2016 however 

vanadium pentoxide used in batteries was under 3% of this demand. 

Manufacturers of vanadium flow batteries will likely need to control own their own raw 

material source to minimise the raw material supply and price fluctuation risk which can be 

very disruptive to the adoption of this technology. A major positive of this technology is that 

vanadium can be recycled and some producers are looking at raw material leasing options 

for financing new battery installations. 

Solid state: 

Solid state batteries are the most promising successor to lithium ion but a technology that is 

still many years for widespread commercial adoption. 

5 
31 

Compared to a lithium ion battery, there are no liquid components to solid state and it uses a 

lithium metal or silicon anode. The gains in changing the anode are the main theoretical 

benefits over a lithium ion battery and include higher energy density and faster charging. 

Solid state technology in the commercial world has seen some activity in mid-2017. UKbased Dyson revealed it aims to enter the EV market using solid state by 2020. This was 

made possible because of its 2015 acquisition of Sakti 3, a US-based solid-state technology 

developer. 

A second most recent boost was from Porsche's confirmation that it will also seek to use 

solid state batteries in 911 and Boxster in post-2020 production models. 

Wide scale solid state battery adoption is far from guaranteed and it is yet to be seen 

whether solid state can work safely in real world scenarios. But the technology is widely 

tipped as the successor to lithium ion in a post 2030 world. 

2025 Vision: Lithium ion here to stay, supply chains need to evolve 

While there are huge opportunities with the energy storage revolution there are also huge 

risks. 

The demands EV manufacturers are placing on raw material miners to chemical processors 

and cathode manufacturers are huge they are being asked to increase their business 

footprint by 5-10 times in a ?-year period. 

At present, there is little desire to share this capital and commercial risk of building new 

mines or expanding their business to meet this new demand. 

Major auto manufacturers will eventually have to conclude that supply chain partnerships 

and capital investment is the only way to secure lithium, graphite, cobalt, nickel or lithium ion 

battery cells. But this decision-making process is slow for players outside of China and risks 

derailing any form of revolution in the energy storage industry. 

Market momentum is now with lithium ion batteries and for this first phase of the energy 

storage revolution the choice has been made, certainly for EV. Over $35bn has been 

committed to expanding lithium ion battery plants while the lithium industry has raised $1bn 

to build new supply. 

This investment is short by some way. 

The investment into lithium ion battery capacity needs to be four times larger to satisfy 

demand for the mid-2020s and it needs to be 10 times larger to create a new blueprint for a 

post-2030 world. The lithium industry, as an example, will need raised between $7-10bn to 

keep pace with this new capacity and demand for EVs. 

The US is very active on EV innovation mainly owing to activities by Silicon Valley based 

companies like Tesla and Proterra. US involvement in the raw material to cathodes to 

battery cell links in the supply chain is very limited however with the sway of industrial power 

lying in Asia Pacific countries most notably China, Japan and Korea. 

This energy storage revolution is global and unstoppable. For countries and corporations, 

positioning themselves accordingly to take advantage of this should be of paramount 

importance and longer term (-10 year) decisions need to be made. 

6 
32 

Where we stand today in 2017, China is not only at the centre of mass market EV 

development and deployment but also of cathode production, battery grade raw material 

refining, and the building out of new battery cell capacity. 

Those that control raw material and chemical/ cathode refining knowhow and capacity will 

control the lithium ion battery supply chain. And those that control the lithium ion battery 

supply chain will be the biggest influencers on the next generation auto and energy 

industries. 

Simon Moores 

Managing Director 

Benchmark Mineral Intelligence 

UK 

7 
33 

The CHAIRMAN. Thank you, Mr. Moores. We appreciate the focus 

on critical minerals, and this is just the beginning of the discussion 

here when we are talking about what will be needed to help facilitate energy storage. 

Mr. Seifarth, welcome. 

STATEMENT OF JOHN SEIFARTH, HEAD OF ENGINEERING, 

VOITH HYDRO, INC. 

Mr. SEIFARTH. Chairman Murkowski and Ranking Member Cantwell, thank you for inviting me here today to testify. I’m John 

Seifarth, the head of engineering at Voith Hydro in York, Pennsylvania, about two hours up the road from here. We trace our roots 

in the United States back 140 years. Currently, we employ around 

600 employees. 

Voith is a leading supplier of hydroelectric equipment and has 

supplied or modernized a majority of the pumped storage hydro facilities in the United States. Pumped storage hydro is the only 

proven form of large-scale energy storage, giving utilities and grid 

operators stability and reliability. Pumped storage hydro is also essential for deployment of additional renewable energy sources, such 

as wind and solar. 

Currently, 97 percent of utility-scale energy storage in the 

United States is from pumped storage hydro. It represents nearly 

22 gigawatts, or 20 percent, of our installed hydroelectric capacity. 

How does it work? When energy demand is low, water is pumped 

to a higher elevation reservoir. The upper reservoir stores this 

water for points in time when energy demand increases and the 

water is simply released back through the turbines to generate 

electricity. It does this with an overall efficiency of 80 percent, surpassing other storage technologies. 

Pumped storage has evolved from conventional pumped storage 

which reacts to grid demands in minutes to current, state-of-theart pumped storage facilities that react to the grid demands in milliseconds. 

Unfortunately, pumped storage is often not valued properly in 

the market. Like other hydropower technologies, pumped storage 

projects are subject to an incredibly long licensing process, include 

the development costs and it becomes difficult for utilities to pursue pumped storage projects despite their obvious benefits. 

With respect to licensing, Committee members deserve credit for 

their work on the Energy Policy Modernization Act of 2016. That 

bill sought to streamline the hydropower licensing process, including designating the Federal Energy Regulatory Commission 

(FERC) as the lead agency throughout the process. It would also 

give FERC the authority to set a schedule for this cumbersome 

process while maintaining environmental safeguards. 

I am pleased to see Chairman Murkowski and Ranking Member 

Cantwell reintroduce similar legislation in the Energy and Natural 

Resources Act of 2017. That bill contains Ranking Member 

Cantwell’s proposal for a $50 million annual energy storage research, development, and demonstration program. The bill also requires FERC to establish an expedited review of the licensing process and market compensation barriers for new closed-loop and lowimpact pumped storage projects. 
34 

Pumped storage R&D, through DOE, would fund the development of new turbine designs and small modular pumped storage 

projects and quantify the gaps in the policy evaluation of ancillary 

services and grid reliability. Complete and accurate valuation is 

perhaps the biggest challenge and opportunity for pumped storage 

hydro. If pumped storage isn’t valued correctly and accurately in 

the market, it simply won’t get built. 

The tax code is another solution. Congress should adopt an extension of the hydropower investment tax credit which expired in 

2015. An investment tax credit for new pumped storage projects 

should also be considered. 

As a point of reference, our European colleagues are already 

building new and modernizing existing pumped storage facilities 

with cutting edge equipment that reacts to grid faults in milliseconds. This is required to manage their increase in wind and 

solar energy. 

Our task is clear. Pumped storage deployment is essential for the 

expansion of renewables. The 2016 DOE Hydropower Vision Report 

determined that pumped storage hydropower has the potential to 

grow by 36 gigawatts, but that can’t happen without supporting 

policy. And without these policy changes, we also lose out on the 

tremendous job and economic benefits created by pumped storage 

hydropower across the country. 

Thank you and I look forward to your questions. 

[The prepared statement of Mr. Seifarth follows:] 
35 

Testimony of John Seifarth 

Head of Engineering, Voith Hydro, Inc. 

Statement for the Record 

Before the U.S. Senate Committee on Energy and Natural Resources 

Full Committee Hearing to Examine Energy Storage Technologies 

October 3, 2017 

Chairman Murkowski, Ranking Member Cantwell, and members of the Senate Energy and 

Natural Resources Committee: thank you for inviting me here today to testify on the tremendous 

value and potential of pumped storage hydropower. 

I am the Head of Engineering at Voith Hydro, located in York, Pennsylvania. We are a 150-year 

old company, and we trace our roots in the United States back 140 years. Voith Hydro employs 

nearly 600 people in the United States, and all Voith divisions throughout the world employ 

nearly 20,000. 

Both domestically and across the globe, we are a leading supplier of hydroelectric turbines, 

generators, automation, and other equipment. This is particularly true for pumped storage hydro 

generating equipment, where Voith has either supplied or modernized major generating 

components (i.e., pump/turbine or generator/motor) for about half of the pumped storage hydro 

facilities in the United States. These include projects like Bath County in Virginia, Raccoon 

Mountain in Tennessee, Castaic in California, Bad Creek in South Carolina, and Muddy Run in 

Pennsylvania. Voith Hydro has played a constant role in advancing the technology harnessing 

the world's largest developed source of renewable energy. 

I am particularly excited about today's topic because pumped storage hydro is a highly-advanced 

-and in many ways, underutilized- form of energy. It is also the only proven form oflargescale energy storage, which gives utilities and grid operators the stability and reliability they 

need to deliver a constant flow of energy to their customers. Pumped storage hydro is also 

essential for the further deployment of other renewable energy resources such as wind and solar. 

Pumped storage hydro helps balance energy grids that are becoming increasingly reliant on more 

intermittent sources of energy. 

According to the Department of Energy's 2016 Hydropower Vision Report, current pumped 

storage capacity in the United States is just under 22 gigawatts, and comprises 97% of utilityscale energy storage in the United States. Even though there are only 42 pumped storage 

facilities in the U.S. (compared to nearly 2,200 non-pumped storage hydropower plants), pumped 

storage accounts for over 20% of the installed hydro capacity in the United States. That statistic 
36 

alone shows the massive storage capacity that pumped storage hydro offers our nation to help 

with the transition to a more renewable energy-based economy. 

The concept of pumped storage hydro is simple. During times when demand for energy is low, 

such as the middle of the night, water is pumped up to a higher elevation reservoir. This upper 

reservoir "stores" the energy used to pump the water up to the reservoir. That water remains 

there until demand for energy increases, at which point the water is released back through the 

turbines to generate energy. Pumped storage converts the potential energy of falling water into 

electricity that is deployed across the country, and it accomplishes this service with an overall 

efficiency of roughly 80%. Other energy storage methods cannot match this level of efficiency 

and sustainability. 

The technology, engineering, and construction that goes into pumped storage is anything but 

simple. Each pumped storage unit is designed with the specific grid it is serving in mind to 

ensure the energy demand is met. That means other forms of energy serving the grid such as 

nuclear, coal, natural gas, and other renewables significantly affect the engineering and design 

of a pumped storage facility. 

Though pumped storage is not a new technology, it is also not static. Over the last 100 years 

since Voith's first pumped storage unit was delivered, the technology has constantly improved. 

The evolution of pumped storage has gone from conventional pumped storage, which reacts to 

grid demands in minutes, to advanced conventional pumped storage, which reacts to the grid 

demands in seconds, to the current state-of-the-art variable speed, ternary, and full power 

frequency converter pumped storage facilities, which react to the grid demands in milliseconds. 

Although pumped storage facilities are built to last for decades, the longer the facility has been 

operational, the less equipped it is with the most up-to-date technology that would allow these 

facilities to better account for a rapidly changing energy supply. These plants can also fall behind 

modern standards for efficiency; in those cases, operators are not extracting the full benefit of a 

pumped storage. A streamlined and robust licensing (and relicensing) process will make a huge 

impact to the utility grid value of these pumped storage facilities. 

Like conventional and small hydropower technologies, pumped storage projects can take an 

incredibly long time to get licensed and ultimately built. The inherent cost of these large 

infrastructure projects, coupled with a licensing process that can take a decade or longer means 

many developers and utilities do not pursue pumped storage projects that would otherwise 

provide substantial benefits to their energy portfolios and, ultimately, the reliability of our 

nation's power grid. 

With respect to licensing, I would like to thank Committee members for your work on the 

Energy Policy Modernization Act of2016. That bill included provisions long-sought by our 

industry that would streamline the licensing process for hydropower, including designating the 

Federal Energy Regulatory Commission (FERC) as the lead agency throughout the licensing 

process. It would also give FERC the authority to set a schedule for this often cumbersome and 

timely process. Notably, this improved process would keep in place environmental safeguards, 
37 

but ensure projects do not languish and give their developers have some degree of regulatory 

certainty during the process. 

Given that bill's fate at the end oflast Congress, I am pleased to see Chairman Murkowski and 

Ranking Member Cantwell reintroduce similar legislation in the Energy and Natural Resources 

Act of2017. Of particular interest to this hearing, that legislation contains Ranking Member 

Cantwell's proposal for a $50 million annual grid storage research, development, and 

demonstration program. That's a good and important first step. 

Further, the Energy and Natural Resources Act requires FERC to establish an expedited review 

of the licensing process for new closed-loop pumped storage projects, identify project 

development and market compensation barriers for pumped storage, and encourages FERC to 

provide greater certainty with respect to the licensing timeline for low-impact pumped storage 

projects. 

I hope both the Senate and the House reconsider this legislation and its provisions become law. 

Outside of the regulatory landscape, perhaps the biggest challenge for pumped storage hydro is 

proper and accurate valuation. Nearly everyone agrees that energy storage is a priority, but there 

is considerably less agreement in how to account for that value in a way that has a true market 

impact. The lack of proper valuation with necessary context to the role storage plays on the 

energy grid is another hindrance to the development and deployment of pumped storage 

hydropower. 

One way to solve this problem is through the tax code. Capacity additions, performance 

improvements, and life extension to existing pumped storage projects qualify under federal tax 

incentives for hydropower. However, these incentives expired in 2015. At a minimum, Congress 

should adopt an extension of the hydropower Investment Tax Credit (ITC), similar to the solar 

industry. Additionally, an investment tax credit for new pumped storage projects should also be 

adopted, along with eligibility for the Clean Renewable Energy Bonds (CREBs) program. I hope 

these provisions are considered in the tax refonn effort currently being developed in Congress. 

In addition, the research capabilities at the Department of Energy should not be ignored. The 

DOE's Water Power program needs continued funding. Pumped storage R&D support would 

fund activities such as the development, testing, and deployment of new turbine designs; the 

development of new small modular pumped storage projects; and the identification and 

quantification of the gaps in valuation of ancillary services and grid reliability in various federal 

and state policy. 

In its recent Electricity Markets and Reliability Report (better known as the Grid Study), DOE 

acknowledged many of the issues outlined in my testimony. With respect to hydropower, the 

report said, "Encourage FERC to revisit the current licensing and relicensing process and 

minimize regulatory burden, particularly for small projects and pumped storage." It also 

commented on the need for storage, determining" A grid with higher levels of [variable 

renewable energy] and more dynamic customer loads will need more of the services that energy 

storage can provide by acting on both the supply and demand side, including energy, capacity, 
38 

energy management, backup power, load leveling, and [essential reliability services], over 

periods from seconds to hours or days." 

Pumped storage projects are proven solutions for each of the energy service concerns identified 

in the Grid Study. I encourage this committee to work with DOE and stakeholders to address 

these well-established challenges. 

Our European colleagues are already facing the reality of an energy grid comprised of mainly 

intermittent power sources. The older conventional storage facilities do not react fast enough to 

secure a reliable grid. As a result, they are rapidly advancing the deployment of cutting-edge 

equipment that reacts to grid faults in milliseconds (such as variable speed and ternary pumped 

storage units coupled with full power frequency converters). Many of these projects involve 

modernization and rehabilitation of existing conventional pumped storage facilities; however, 

several new facilities are also being built, particularly in areas prone to grid reliability issues. 

In the United States, the challenge is clear. If we want more wind and solar power on our grid, or 

any other new form of energy, pumped storage must be expanded. In that same 2016 

Hydropower Vision report I referenced earlier in my testimony, the DOE determined that 

pumped storage hydropower has the potential to grow by 36 gigawatts. In fact, pumped storage 

accounted for nearly 75% of the total hydropower increase envisioned by the report. But that 

can't happen without some of the policy changes I've outlined. 

While I know this committee is primarily tasked with ensuring our country's energy needs are 

met and natural resources are utilized appropriately, I'd be remiss ifi didn't at least mention the 

economic impacts of pumped storage. As with any large-scale infrastructure project, 

modernizing and retrofitting, and increasing the supply of pumped storage hydropower will be a 

serious economic boom, both in towns like York, Pennsylvania, and the communities where 

pumped storage projects are located. These projects benefit the people engineering the turbines 

and building the infrastructure, and the people who work for the over 2,000 companies in the 

national hydropower supply chain. 

Thank you again for the opportunity to share my views, and I look forward to taking your 

questions. 

4 
39 

A White Paper Developed by NHA's Pumped Storage Development Council 
40 

An essential attribute of our nation· s electric pov.-cr system is grid reliability - ensuring that electric 

generation matches electric demand in real-time. The primary challenge in ensuring reliability is that 

electricity has no shelf life - it must be generated when needed - and electricity demand continually 

changes. especially bct\yeen daytime periods of peak demand and night-time periods oflm\ demand. 

Electric transmission grid operators have long met this challenge on a real-time basis "·ith a limited 

number of generation technologies - specifically hydropower and gas-fired combustion turbines - that 

have the ability to statt up quickly at1d/or vary their electric output as the demand changes 

However, these solutions may not be enough as ""1\"C move into a \Vorld with far greater amounts of 

rcnc,Yablc energy on the grid. In that nC\\ reality, reliable. affordable and grid-scale storage of energy 

must be on the table. F01tunatcly. a technology exists that has been providing grid-scale energy storage at 

highly affordable prices for decades: hydropower pumped storage. Indeed. for the foreseeable future 

hy·dropower pumped storage stands alone as the only commercially proYcn technology available for gridscale energy storage 

-~---,------~·------- The last decade has seen tremendous 

gro>\1h of wind and solar generation in 

response to favorable tax incentives and 

other policies. While increasing the amount 

-----------·~--~~--- of rcnewablcs on the grid is a good thing, 

the variability ofvvind and solar generation increase the need for energy storage. 

Developing additional hydropower pumped storage, particularly in areas with recently increased wind and 

solar capacity, \\Ou!d significantly improve grid reliability ""IYhilc reducing the need for construction of 

additional fossil-fueled generation. Grid scale storage could also reduce the amount of new transmission 

required to support many states- goals of 20-33% renewable generation by the )Car 2020_ 

Pumped storage hydropower has a long history of successful development in the U.S. and around the 

world. Energy storage has been a part of the U.S. electric industry since the fir!.i: hydropower prqjccts. 
41 

primarily through the flexible storage inherent in reservoirs. h1 the U.S .. there arc 40 existing pumped 

storage projects providing over 22,000 M\Vs of storage. \Yith largest projects in Virginia, Michigan and 

California (Bath County. Ludington and Helms. r..::spectively). Additionally, there currently arc 51.3 !0 

MWs representing m·er 60 pumped storage projects in the FERC queue for licensing and pcnnitting. 

Globally. there arc approximately 270 pumped storage plants either operating or under construction. 

representing a combined generating capacity of over 127.000 megawatts (l'vtW). As a proven technology. 

it been shown to be cost effective, highly efficient, and operationally t1exib!c. This grid scale storage 

technology has been used extensively to both store and redistribute clcctJicity from periods of excess 

supply to periods of peak demand and provide grid rdiability services in generation mode. Similar to 

the U.S., European energy policy is also focused on adding clean. renewable energy to the grid. And the 

significant amounts of wind and solar being brought on-line is the motivating tOrc0 that is driving new 

pumped storage development noted above. 

The National Hydropower Association (NHA) believes that expanding deployment of hydropower 

pumped storage energy storage is a proYCn. affordable means of supporting greater grid reliability and 

bringing clean and affordable energy to more areas of the country·. 

While benefits of expanding pumped storage capacity arc clear_ current market stmctures and regulatory 

frameworks do not present an effective means of achieving this goal. Policy changes arc needed to 

support the timely development of additional grid-scale energy storage, To this end, NHA has developed 

a series of recommendations to guide the energy industry and policy makers. NHA 's key policy 

recommendations arc presented in detail in Section 4 of this paper. and include: 

Create market products that allow flexible resources to provide services that help meet electric 

grid requirements, including very fast responding systems that provide critical capacity during 

key energy n~Jed periods 

$ Level the policy playing field for pumped storage hydropO\vcr with other storage technologies to 

encourage the development and deployment of all energy storage technologies. 

Recognize the regional differences within the U.S. generation portfolio and the unique roles 

energy storage technologies play in different regions 

'* Recognize the energy security role pumped storage hydropower plays in the domestic electric 

grid 
42 

* Establish an altenwtive, streamlined licensing process for low-impact pumped storage 

hydropmYer, such as off-channc! or closed-loop projects. 

* Improve integration of Federal and state agencies into the early-stage licensing processes for 

pumped storage hydropower 

Facilitate an energy market structure \\here transmission providers benefit from long-tenn 

agreements with energy storage facility developers. 

This paper includes two supporting appendices that present additional detail on historic and current trends 

in pumped storage hydropower development (Appendix A) and pro\"ide a brief summary of advancements 

in equipment technology (Appendix B) which may provide further benefits to the integration of additional 

variable renc\Yable energy resources 
43 

Pump~d storage hydropower is a modified usc of conventional hydropower technology to store and 

manage energy or electricity 1 As sho\'m on Figure 1, pwnped storage projects store electricity by moving 

water between an upper and lower rescrYoir.:: Ek:ctric energy is converted to potential energy and stort':d 

in the fonn of water at an upper elevation. Pumping the \\atcr uphill for temporary storage ··recharges the 

battery'' and. during pctiods of high electricity demand. the stored water is released back through the 

turbines and comerted back to electricity like a conventional hydropO\\er station. rn fact, at many 

existing pumped storage projects. the pump-turbines arc already being used to meet increased 

transmission system demands for reliability and system reserves. Cuncnt pumped storage round-trip or 

cycle energy efficiencies exceed RO%, comparing favorably to other energy storage technologies and 

thermal technologies' This effeeti\'ely shifts. stores. and reuses energy generated until there is the 

corresponding demand for system reserves and variable energy integration_ This shifting can also occur to 

avoid transmission congestion periods. to help more efficiently manage the transmission grid. and to 

avoid potential interruptions to energy supply< New adjustable-speed technology also allows pumped 

storage to provide fast ramping. both up and down, and frequency regulation services in both the 

generation and pump modes. This is important because many of the renewable energy resources being 

developed (e.g .. wind and solar) arc generated at times of IO\'-. demand and off-peak energy demand 

periods arc still being met \\ith fossil fuel resources. often at inefficient pcrfonnancc levels that increase 

the release of greenhouse gas emissions 

1 "Pumped storage .. as it is used in this document is primarily for the purpose of storing clcctricit)\ although "energy 

storage'" is a commonl~ used term throughout ··Energy storage'' is commonly differentiated to primarily include 

thcmml. natural gas and various fonns of chemical processes. In pumped storage hydropower. previously generated 

clectrici!) is converted to potential energy \\hen pumped uphill and stored in the form of\\ater at an upper elevation 

(reservoir). where it later flotvs downhill to a lo"er reservoir through turbine and converted back to c!ectticity 

Pumped storage projects gencrall) imoJye an upper and lower rcscn-oir: ltO\VCYer. there arc other project design 

concepts under consideration that would locate one or both resetYoirs below ground (sub-surface) !o take adnmtage 

of abandoned mitres. eavems. or other storage reservoirs. These types of projects could be attractive due to their 

perceived site availabilit) and their potential for reduced environmental impacts. 

3 Round trip or cycle efficiency can ym:y significantly for different energy storage tcclmologies. depending on 

application (battery. fly\\ heeL etc.). number of cycles. and duration of usage. fn general. distributed etlCrg) storage 

tcclmologics (llyt\ heels. batteries) have cycle efficienc~ ranging from 60%-95%. and bulk energy storage systems 

(pumped hydro and CAES) ranging from 70°A) to 85%. As a comparison. simple cycle and combined cycle gas 

turbine plants lutvc cycle efficiency ranging from 30%-60% (Alstom Pm\er Data Base) 
44 

Additional infotmation related the historical dt;ve!opmcnt, operational characteristics, and worldwide 

function of pumped storage is provided in Appendix A. 

Source: U.S. Department of Energy and Homeland Security- Dams and Energy Sectors 

Interdependency Study, September 2011. 
45 

During the last decade. variable renewable energy projects (primarily wind and solar-based technologies) 

have gained strong momentum in response to favorable tax incentives and the social preference for 

renewable energy \Yithout the potentially harmful emironmental impacts of carbon-based generation. 

HO\\ever, these resources increase the need for system reserves (i.e .. finning resources) to satisfy existing 

grid requirements and the variable nature of many renewable energy technologies. TI1ese fim1ing 

resources typically include coal-fired and natural gas plants, and the existing fleet of hydropower 

facilities. As the capacity of available finning resources reaches the limit to support variable renewable 

energy resources_ the O.S. electric industry has commonly tumed to constmction of new natural gas 

plants because of their short pennitting process and relatively low fuel cost. "01e increased fleet of natural 

gas peaking plants can result in excess or undcrutilized facility capacity. This condition is freqmmtly 

inefficient and can result in costly idling of these resources during {0\\" consumer demand periods or 

periods of peak variable renewable energy generation. More critically, these finning resources must be 

operated at an inefficient partial load to provide that system flexibility, ewn when the power is not 

needed. In some areas of the Pacific Northwest or Southwest, the impact of having excess amounts of 

electricity is becoming a significant concern for electric grid operations and these conditions \Vili only be 

exacerbated by continued development of variable rene\...-able energy. Bulk storage, such as pumped 

storage hydropower, could significantly reduce the need for conventional reserve generation capacity. 

support the development and optimal integration of renewable energy resources. and reduce the amount 

of new transmission required to support the goal of 20-33% renewable generation in these regions by the 

year 2020 

Since deregulation of the electric industry, there is no regulatory mechanism or market price incentive for 

the effective integration ofne\\" generation, energy storage. and transmission (Miller. 2010). Yet these are 

three components of a reliable energy generation and transmission system that require coordinated. longterm planning. In addition. in certain market regions. large amounts of variable rene\Yablc energy 

generation are creating new challenges for the overJ.ll transmission system and its grid operators. Bulk 

energy storage could alleviate some of these difficulties and promote the development of new variable 

energy because it \'.auld be able to shift renewable energy generated during !0\'- demand periods to higher 

demand periods, thereby maximizing the value of these projects. TI1c fast ramping c-apability of current 

technology can also manage hourly and intra-hour changes in generation. Because bulk energy storage 

can be used to optimize the transmission grid and reduce the amount of new transmission required. NHA 

believes it should be included in regional transmission planning processes under Federal Energy 

Regulatory Commission (FER C) Order I 000"' 

4 FERC Order 1000: Transmission Planning and Cost Allocation by Transmission Owning and Operating Public 

nthttes (July 21. 20 II). 
46 

In 2010, renewable energy generation accounted for 8% of the total energy supply in the U.S. (Encrg~ 

lnfonnation Administration fEIA J, April 20 II). Hydropower, biomass. and geothermal energy arc 

capable of providing predictable. consistent generation; however_ wind and solar generation. \Yhile less 

variable \Yith adequate geographic diversity, can present new challenges for U.S. grid reliability and 

stability. The power output for these plants can fluctuate widely as weather patterns change and. while the 

changing \\Cather patterns may be well understood. the magnitude of renewable energy generation rmnps 

(in panicular. when not in correlation with changing load) can be challenging to grid operators when 

rene\Yable energy resources are a largti component of their generation portfolio. This variable output can 

lead to frequency and voltage fluctuations, which adversely affect grid stability. In geographic regions 

without a significant hydroelectric generation base. this variability is most commonly managed \Yith fossil 

fuel-based thermal generation 

According to the American Wind Energy Association (A \VEA), over LlOO megawatts (MW) of v;-ind 

power capacity were installed during the first quarter of 2011 -more than double the capacity installed in 

the first quarter of20l0 (RcnewableEnergyWorld.com, 2011). 'fbc U.S. \\ind industt;.' had 40,181 MW 

of·wind power capacity installed at the end of 2010, \\hich produced 2.3% of the electricity in the U.S. 

(increased from 1.8% in 2009)_ TI1e U.S. wind industry has added ova 35% of all new generating 

capacity ovcrthc past four years, second only to natural gas generation (EIA, Apri12011). TI1e EIA also 

projects that non-hydropower renewable energy generation sources will increase from approximately 

47.000 M\V in 2009 to over 100.000 MW in 2035. \\ith the ma,jority of this projected increase attributed 

to wind-powered generation (EIA, April 20Il). NHA fully acknowledges the significant benefits that 

\Yind and other renewable energy sources can provide with regards to domestic energy security: however. 

"ithout adequate system planning. including bulk storage_ the integration chalknges of more rcnti\vable 

energy resources arc likely to be in conflict with electric grid operators· goals to provide stable, secure. 

and reliable energy to consumers_ 
47 

Source: Eagle Crest Energy- White Paper on Removing Federal Barriers to Grid-Scale Energy 

Storage, November 2011. 

Significant environmental misconceptions face many pumped storage developers today. In the past, 

almost all of the operating pumped storag0 prQjects required the constmction of at least one dam along 

main stem rivers, altering the ecology of the river system. Enhanced a\\arcness of the impacts from 

construction of large dams and storage reservoirs on existing tivcr systems generally precludes fmthcr 

consideration of these large projects. or developers work directly with the environmental community to 

try to reduce or mitigate project impacts. TilC majority of existing pumped storage project owners 

(typically investor/publically owned utilities or the Federal govemment) has attempted to address these 

impacts through significant post-construction efforts to improve habitat or provide project-specific 

mitigation mea..<>ures. In today's pumped storage development community. project proponents attempt to 

minimize these issues by focusing on nc\\ project sites where proposed construction would have minimal 

environmental impacts, rather than attempting post-constmction mitigation measures. 

A relatively ne\\ approach for deYcloping pumped storage projects is to locate the reservoirs in areas that 

arc physically separated from existing ri\·cr systems. These pr0,jects arc termed "closed-loop·· pumped 

storage, because they present minimal to no impact to existing river systems. After the initial filling of the 

r0servoirs. the only additional \\akr rtJquirement is minimal operational make-up \Yater required to offset 

evaporation or seepage losses. By avoiding existing complex aquatic systems entirely. these types of 

projects have the potential to greatly reduce the most significant aquatic impacts associated \\ itl1 pr0,jcct 

development. In addition. because closed-loop pumped storage systems do not need to be located ncar an 

existing riYer system or body of water. with the right topographical features, they can be located ·where 

nc0ded to support the grid 
48 

Another significant challenge facing pumped storage project developers is the regulator_~.' timclinc for 

development of nc\v projects. Under Section IO(a) of the U.S. Federal Power Act, ail)' non-Federal 

pumped storage developer must obtain a FERC license. as well as multiple other state or Federal pem1its. 

Under the current FERC licensing process, obtaining a new project license to construct can take thrcl": to 

five years. or even longer before the developer will have the authority to begin prqjcct construction. TI1erc 

is currently no alternative licensing approach for low-impact or closed-loop sites to shorten this time 

frame. In addition. a three- to five-year constmction period is common for most large prqjccts; 

furthennore. em·ironmentally benign projects being developed to support renewabh:! energy integration 

could take six to 10 years or longer to construct. Very few financial institutions arc willing to finance 

these types of long-lead projects through the licensing timcframc. NHA and the hydropower industry arc 

continuing to work closely with the FERC to streamline the licensing process for those projects with 

obvious minimal environmental constraints, especially when many new projects can help support the 

development and integration of additional renewable energy resources. 
49 

Source<· K. Bfeskan, SNL Financial LC, ~FERC's Norris Promises Special Attention to Storage': Marc/1 

28, 2012. 

In today·s electric market, pumped storage has the potential to bring added value through ancillary 

services, beyond time~shift of energy delivery. HmYe\'er. a lack of a national energy policy may lead to 

changing independent system operators (ISO) market rules and product definitions that may have a 

signitlcant impact on the value of ancillary services. including those related to energy storage. FERC 

Orders 890 and 719 required !SOs to modify their tariffs and market ruk:s so all non-generating resources. 

such as demand response and energy storage. can fully participate in established markets. However. these 

arc typically real-time or day-ahead markets and there arc no long-h.mn value streams where a bulk 

storage project can attract investors seeking re\·cnue certainty through long-term power purchase 

agreements or defined value streams (EPRI. 20 10) 

\Vhilc the previous sections of this paper focused on generation sources and how pumped storage fits into 

the energy market. energy storage technologies have the ability to provide components of transmission 

assets along with their ability to supply ancillary services and alleviate congestion by absorbing excess 

gem~ration. Market rules generally prohibit transmission assets from participating in \Yholcsalc energy and 

ancillary service markets to maintain the independence of grid operators and avoid the potential for 

market manipulation. whether real or perceived. Furthermore. FERC requires market power studies to be 

perfonncd when third parties proYide ancillary services at market-based rates to transmission providers 
50 

(i.e. A vista Restriction''). In addition, the policy prohibits sales of ancillary services by a third~party 

supplier to a public utility that is purchasing ancillary services to satisfy its own obligations to customers 

under its open access transmission tariff TI1is restriction removes one of the largest potential markets for 

bulk-scale storage. 1l1is clear distinction between transmission and generation assets is problematic for 

energy storage (EPRl, 2010). because pumped storage or other energy storage projects have compont::nts 

of both transmission and generation. 

Some industry participants arc interested in presenting bulk energy storage as a new asset class that could 

be similar to the existing gas storage asset class recognized by the FERC. NHA supports further 

evaluation of this issue. 

FERC Order 1000 introduces robust regional planning into the transmission process. lt also mandates 

coordination among neighboring transmission planning regions voith their interconnection. Because Order 

1000 establishes requirements for refonning transmission cost allocation processes. it creates an opening 

for energy storage to be included in the transmission planning process and in changes in regional and 

interregional cost allocation processes. If, as a result of the transmission planning process, a project is 

accepted into a regional plan it would therefore appear to meet the threshold requirements of Section 219 

of the Federal Power Act. making it eligible for incentive rate treatment In addition, having storage 

included in transmission planning could enable a developer seeking to sell a vaticty of storage~only 

services to be deemed eligible for long~tctm incentive rate recovery. similar to transmission assets. 

Energy storage docs not generate energy, but only stores and rctums it to the market \\hen needed. so 

there would be no potential of '"over recovery" by having the facility used as both transmission atld 

generation. 

Lacking an encrg) storage asset class. some storage proYidcrs have applied to the FERC or their 

respective ISOs to be considered as a transmission asset. with rate-based cost reco\el}· included in 

transmission tariffs or grid charges_ For example. proponents have argued that battery energy storage 

serves a rdiability fimction similar to substation equipment. such as large electricity capacitors, \\hich arc 

used in many \\holcsale transmission system facilities (FERC. 2009). The FERC has approved the 

inclusion of storage as a transmission asset (lsscr. 20 lO). but has been carcthl to limit its mlings to the 

specific assets in question, based on the reliability and operational benefits they provide to the grid. 6 

However, these limited decisions on small storage facilities do not address the issue of grid-scale energy 

storage technologies such as pumped storage. 1l1C possibility of establishing bulk energy storage as a new 

asset class arc being discussed \Yith the FERC and other regulatory bodies. and will evolve along \Yith 

market needs and preferences. 

89 FERC •: 6Ll36 at 6U9l (1999). 

For the all FERC incentives ·were approved on the condition that CA!SO approve the projects as 

part of its tr:Jnsmission planning process {EPRI. 20 10) 
51 

Modern pumped storage hydropower project costs can vary based on sitc·specific conditions such as site 

geology, \\ater availability. access to the transmission grid. and 0\'erall constmction cost. A feasible 

pr~ject site would include an approximate cost estimate range from $ 1,500/kilowatt (kW) to $2,500/kW. 

based on an estimated 1,000 MW sized project. A smaller project typically docs not have the same 

economics of scale and could result in higher unit costs (in $/k.W) than a large project TI1cse costs arc 

repn.::sentative for all project asp0cts except transmission interconnection charges. \Yhich can range from 

very minor charges to several hundred million dollars. based on factors such as existing line capacity or 

size and distance of ne\Y lines. According to an Electlic Power Research Institute (EPRI) report (EPRI. 

20 IO). the lc\,clized cost of pumped storage and compressed air energy storage (C AES). the onl~i other 

large grid·sealc energy storage technology, represent the lowest cost fonns of energy storage 

technologies 

Pumped storage technology has advanced significantly since its original introduction and now includes 

improved efficiencies with modem reversible pump·turbines, adjustable·speed pumped turbines', new 

equipment controls such as static frequency converters and generator insulation systems. as well as 

improved underground tunneling constmction methods and design capabilities. OveralL the 

pumping/generating cycle efficiency has increased pump-turbine generator efficiency by as much as 5(% 

in the last 25 years, resulting in energy conversion or cycle efficiencies greater than 80% (MWH, 2009) 

Globally. there arc approximately 270 pumped storage plmlts either operating or under constmction, 

mpn::senting a combined generating capacity of ov-er 127.000 MW. Of these total installations. 36 units 

consist of adjustable·spced machines, 17 of which arc currently in operation (totaling 3,569 MW) and 19 

of which arc under construction (totaling 4,558 MW). Adjustable -speed pump·turbines have been used 

since the early l9()0s in Japan and the late 1990s in Europe. A main reason that adjustable speed pumped 

storage was developed in Japan in the early 199()" s \Yas the realization that significant quantities of oil 

burned in combustion turbines could be reduced by shifting the responsibility for regulation to pumped 

storage plants. Another advantage of adjustable-speed units is the increase in overall unit efficiency due 

to the fact that the turbine can be operated at its p0ak efficiency point unckr all head conditions, resulting 

in increased energy generated on the order of 3% annually. The current U.S. fleet of operating (single-

'In Japan the usc of the term "yariablc speed" is cotm11on. where in Europe nnd other parts of the world. the term 

··adjustable speed .. is often used. Sec Appendix 8 for additional infonnation 
52 

speeds) pumped storage plants does not provide regulation in the pump mode because the pumping power 

is '"fixed"- a project must pump in ""blocks., of power. The number and magnitude of blocks is dependent 

on the number and size of the plant's units. However, adjustablc~spced pumped stora.ge units, while 

similar to single speed units in most aspects, arc able to modulate input pumping power for each unit and 

provide significant quantities of frequency regulation. This can be very attracti,,c to prqject owners since 

regulation service prices are a valuable ancillary service. 

Another expanded new key ancillary service opportunity in the U.S. is the added need for load following 

and regulation (generally known as system reserves) at night to accommodate variable renewable energy 

inputs. In particular. the need for system reserves at night is increasing to ensure adequate grid stability 

with higher percentages of variable renewable energy generation. including the demand for energy 

absorption capabilities during pc:tiods of high wind generation during low load (demand) periods. In 

addition to energy absorption needs. \\ ith the increased amounts of variable renewable energy being 

supplied at night while load is decreasing. there is a complimentary greater need for load following and 

regulation services to accommodate the greater changes to net load on the system. Thcnnal generating 

units typicaHy operate at minimum load during low energy demand periods such as late night or early 

morning. and wind is commonly increasing output during these periods. creating a greater need for a 

physical asset to provide system reserves to manage the resulting energy imbalance (Kirby et aL 2009). 

Additional discussion of the value of adjustable-speed technology is presented in Appendix B. 

Globally, there arc currently 0\·cr 60 pumped storage projects under construction. with the majority of 

these projects being constructed in Europe, India. China. and Japan. The momentum behind this gro\\1h is 

founded in cner&ry policies that balance the growth of intcm1ittent renewable energy generation with 

energy storage grO\vth_ This is driven by a number of significant factors, including a common 

understanding of required grid flexibility. a desire to reduce the effects of greenhouse gases on the 

em·ironmcnt, stronger policies for valuation of ancillary services. creative energy storage policies that 

include financial incentives to provide long-term revenue stream certainty, and a desire to reduce reliance 

on limited access to hydrocarbon resources. [t is important to note that for many areas outside of North 

America the access to inexpensive. reliable sources of natural gas is a significant concern. thereby 

enhancing the development of policies promoting energy storage development. 

lt is also worth noting that the existing pumped storage projects in the U.S. were developed in the absence 

of detailed system operations models and ancillary service revenue structures. System planners 

understood the grid to be a careful balancing act requiring an integrated approach to demand forecasting 

and associated generation. transmission. and energy storage. Today. pumped storage systems arc pumped 

8 The tenn "'single speed" is used to describe conventional pumped storage units ·with synchronous speed machines. 

Additional detail on single and adjustable speed units arc presented in Appendi"X B. 
53 

storage systems to provide electric grid suppmt through ancillary services such as network frequency 

control, grid stabilization, reserve generation, and integration of variable rcnewablcs is significantly 

broadening the value of pumped storage technology. 

NHA has developed policy recommendations to stimulate nc\v pumped storage development. Providing 

better recognition of pumped storage benefits and services will provide the needed market signals for 

these prqjccts. ln addition, several existing regulatory challenges should be addressed to streamline the 

long approval times. In general, new hydropower projects take twice as long to pcnnit as other energy 

sources including solaL \\'ind, or natural gas projects. Improving the current licensing process for lowimpact pumped storage projccts (closed-loop or off-channel systems) similar to hm\ FERC has recently 

addressed other hydropower de\·clopment opportunities \\ould reduce this disparity" 

9 Tllis includes recently enacted MOUs \\ith state and Federal agencies to streamline the FERC licensing process. 
54 

l) Create market products that a!lowf!exibfe resources to provide services that help meet electric grid 

requirements, including very fast responding systems that provide critical capacity during key 

energy needs. 111 

Energy storage systems have multi-functional characteristics, ·which complicate rules for mmcrship and 

operation among various stakeholders. Regulatory agencies have not defined ownership structures and 

flexible business models in which storage can be used tOr both generation and grid support purposes. 

Policy mles regarding allocation of costs incurred by adding energy storage systems to the grid need to be 

more clearly dcycJoped 

Energy storage applications could enable bi-directional energy flows. creating potential revenue 

recognition challenges for current tariff, billing, and metering approaches. TI1c results of future policy 

discussions should help infonn the development of new market stmcturcs and mks to accommodate and 

capture the benefits of pumped storage and other energy storage technologies. 

Policies should take into account the ability of a storage technology to supp01t the electric grid, including 

speed of response. Recent studies in California recommend definitions as 5 MW/scc (fast) and 15 

MW/scc (ultrafast) at the plant level (i.e. FERC Order 755). Many of the existing ISOs!Rcgional 

Transmission Organizations (RTOs) such as CAISO. PJM. and others have products and markets that 

allow resources. such as energy storage, to cam revenues by providing services to the system. To the 

extent that non-RTO regions do not allow resources to participate and provide system benefits. we 

encourage these regions to create products that they can procure from flexible resources and provide 

payment for those services. in addition. NHA recommends further evaluation of treating bulk energy 

storage as a separate and distinct dcetricity infrastmcure asset class (i.e., Balancing Asset or 

Compensating Asset). capable of relieving grid stresses through the absorption of excess energy during 

lov,· demand periods or rapidly providing capacity during periods of peak demand 

2) Le1•el the poliq• playingjield.for pumped stora;:e hydropower with other storage technologies. 

While pumped storage hydropower can meet many of the grid-scale energy storage needs. no single 

storage system can meet all grid demands. A wide \ariety of storage technology options is being proposed 

and evaluated for utility-scale storage and end-user energy management applications. StilL greater than 

98% of the world\vide energy storage is in the fonn of pumped storage hydropower. As a proven 

technology, pumped storage has been shown to be cost effective. highly efficient and operationally 

10 One example of this important step includes FERCs Order 755 (Frequency Regulation Compensation in the 

Organized H7wlesale Power ,\larkets), "hich supports the usc of cncrb'Y storage facilities for ancillary scn·ices 

(October 20. 20ll). 
55 

flexible. The FERC and other regulatory agencies have treated pumped storage primarily as a generating 

resource and have not included it in many significant energy storage discussions. 

NHA recommends that any new market mlcs, incentives for development as \Yell as other policies should 

recognize and treat pumped storage the same as other fom1s of cner&'Y storage. 

3) Recognize regional dffferences in the nation's generation pm~f'olio am! the dflferent roles storage 

technologies play in d~fferent regions. 

Pumped storage and energy storage in general can play vel)· different roles in different regions of the U.S. 

In regions vvith high percentages of variable generating {non-firm) rene\Yablcs such as wind and solar_ 

pumped storage hydropower can function as a renewable integration tool. This is the current European 

model behind the construction of new pumped storage hydropO\vcr plants, projected to total more than 27 

gigawatts of capacity by 2020 in Europe (Ecoprog, 20 ll ). In regions \\ ith large coal-fired or nuclear 

steam plants. pumped storage plays a levclizing role and peaking role. TI1is is the c.:tse of the existing 

pumped storage hydropower fleet in the eastem U.S .. as \\ell as countries such as Japan and France. 

4) Recognize the energy securi{r role pumped storage hydropower ph~i'S in the domestic electric grid. 

In the U.S .. pumped storage has been typically built on the 1,000 MW scale but in actuality can be built to 

virtually any scale. TilC generating capacity of existing plants \\-Orldwidc range from less than I l\1W to 

approximately 2.700 MW (e.g .. Bath County Pumped Storage Prq_jcct, Virginia). Larger capacity plants 

arc currently under consideration globally. As the primary grid-scale storage technology in the world. 

pumped storage plays a critical energy security role. but there is currently no recognized revenue stream 

for providing this key service. Existing pumped storage plants in every region become a key· ''energy 

security" plant within a given control or balancing area. In the event of a major disturbance such as a 

major steam unit trip or a transmission line tailure, pumped storage black stmt capability or spinning 

reserve can be called upon to restart or stabilize the grid on \-Cry short notice. Full generation from the 

project can be accomplished to cover the enl.':rgy deficit for longer periods. dl.':pending on reservoir level 

and size. Pumped storage can also respond to decrcmental needs such as a significant wind ramping event 

during low consumer demand periods, maintaining grid stability by rapidly responding to generation 

oversupply in the pumping mode. In addition. pumped storage facilities are resilient to unexpected 

changes in weather pattems, including drought or low water years. because the water used for generation 

is recycled from upper to lower reservoir, and not released to the natural strean1 flow (U.S. 

DOE/Homeland Security. 2011). These are critical energy security functions that often go unrecognized. 

undcrappreciated. and most notably, undercompcnsatcd 

5) Establish an alternative, streamlined licensing process for lm'v'-impad pumped storage hydropower 

such a.\' off-channel or dosed-loop proJect:,: 

In general. new hydropower prc:jects take twice as long to pcnnit as other energy sources including solar, 

wind. or natural gas projects. NHA suggests that FERC consider changes to the current licensing process 
56 

for low-impact pumped storage projects similar to ho\Y they have recently streamlined other hydropo\Yer 

development projects. In particular, there arc certain categories of pumped storage projects that would 

have a minimal effect on the environment such as off--channel projects or closed-loop projects. In these 

instances, environmental revie\v and conditions should be limited to the projccf s proposed changes to 

current conditions. and the FERC approval process could mimic the FERC exemption program to 

streamline project pcnnitting. Broadening the scope of projects that could move through a streamlined 

process would help lower approval costs and provide greater licensing certainty without compromising 

environmental protections. Under the FERCs comprehensive development standard stemming from lO(a) 

of the Federal Power Act (FPA), the FERC can approve a hydroelectric project provided it is "'best 

adapted to a comprehensive plan for improving or devcloping a waterway. If the water source used for 

filling and providing make-up \Vater for a closed-loop pumped storage project comes from a non-riverine 

water source such as groundwater or recycled \\astcwater. there would be no waterway affected by the 

project In these cases, the FERC should consider these prqjeets in a new, minimal-impact category to 

reduce the length and complexity of the licensing process. The FERC could advance the licensing process 

through a shorter process but have "off-ramps" if unanticipated issues arise. NHA is encouraged to hear 

that FERC is currently considering a hvo~ycar licensing process for these types of projects and llC\\ 

regulations could codify this process. Other relatively lov .. ·-impact proposed pumped storage projects, such 

as those utilizing h\O existing reservoirs. may also be appropriate candidates for future consideration of a 

shortened licensing process. 

6) lmprOl'e integration l~{ Federal and state agencies il1fo the ear<r-stage licensing proce!.'Ses .for 

pumped storage hydropower. 

NHA and the overall hydropower industry continue to work closely .. with FERC to streamline the 

licensing process for those projects ,-..ith obvious minimal environmental constraints: hO\\e\,eL additional 

cfl:lcicncy can be realized through process improvements related to coordination \Yith other Federal and 

state agencies. By implementing the Integrated Licensing Process, FERC has helped licensees coordinate 

\Yith many agencies: however. in some areas of the country, there continue to be overlapping regulator) 

processes that cause significant delays in the licensing process. These challenges should be streamlined 

for development of environmentally favorable pumped storage sites. and resource agencies should be 

encouraged to participate early in development revie\vs. This would minimize additional infom1ation 

requests. resolve disagreements early in the process. and allOY\. for speedy processing of pcnnit 

applications later in the process for those projects that dearly have minimal environmental impacts. All 

resource agencies perfom1ing their own environmental reviews should be encouraged to work 

concurrently \\·ith the FERC process to coordinate and not duplicate the environmental review process 

7) FacilitaTe an energ:y market structure where transmission prrwiders benefit from long-term 

axreements with energy .\·toragefaciliiJ.' developers. 

NHA requests that FERC develop policies that allow RTOs and ISOs to enter into long-term fixed-price 

contracts with energy storage project owners, including pumped storage facilities. One such policy would 
57 

be to lift or modi-~)-' the Avista Restriction for grid~sca!c energy storage projects providing storage-on!: 

services. These policies could include fixed~pnce contracts that provide the procurer long~tcrm ancillary 

services for the tcnn of the contract and the benefit of energy storage services uniquely suited to manage 

the grO\\ ing pl:netration of variable energy generation_ 

For such facilities to be financed, transmission providers need authorization to enter long~tcrm 

agreements \\ ith energy storage facility developers. Pumped storage facilities built decades ago were 

primarily built as rate-base cases by regulated utilities: ho\\e\-eL in most areas of the country except the 

southcastcm U.S., this model no longer applies. Today, much of the nation ·s energy infrastructure is no\Y 

being developed by independent power producers ,-...ho lack utility rate base cost-recovery stmetures. 

Transmission organizations and ISOs arc most able to realize the full value of grid-scale energy storage 

facilities. Unfortunately, FERC precedent poses a major barrier to Jong-tenn contracting with such users 

of storage services (ECE, 2011). 11 

11 In their 201 I paper. ECE detailed PERC's prcYious challenges """ith encouraging transmission organi?.ations and 

ISOs to use nc\"\ and more efficicnl tcclmologies while dealing with pumped storage projects. and m.aintaining the 

separation of generation and tnmsmission markets [Xemda I(wlro Co., 122 N~HC ~ 61,272 f200Ri. and Ires/em 

Urid Development, LU~ !30 F!:R.(' • 61,056 (2010)] 
58 

Alstom Power (2012). Internal Database for Equipment Perfonnance. 

CA!SO (2006), Isemonger, A.G .. '"1l1e Competitive Procurement of Voltage Support'" June 2006. White 

Paper. 

CAISO (2009), Discussion Paper Renewable Integration: Market and Product Review. July 2009. 

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59 

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!021117 

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60 

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61 

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62 

Since the first pumped storage project came on-tine in Europe in the early 1900s and in the U.S. around 

1930. pumped storage hydropmver has pmdded significant benefits to the energy transmission and power 

supply _syst~!n including energy storage, load balancing. frequency control, and reserve peak pO\\Cr 

gcneratwn. -

Historically, a pumped storage project's primary function has been to balance load on a system and alJow 

large. thenna! generating sources to optimize generation by running ncar peak production. As described in 

the main body of this paper. this process allmved pumped storage to take advantage of excess off-peak 

energy from these large (thcnnal or nuclear) generators and store the energy for release during peak 

demand. Accordingly, the primary development of pumped storage power occurred in the 1960s. 1970s. 

and early 1980s in parallel with the construction of a large number of nuclear power stations. The 

worldv,ide evolution of the tot.1.! installed nuclear power and the total installed pumped storage po\vcr 

over the last 45 years is depicted in Figure A-1 

12 The carliesl known usc of pumped storage technology was in S\-ritzcrland in 1882. For nearly a decade, a pump 

and tmbinc operated with a small resen·oir as a hydro-mechanical storage system. Beginning in the carl;. 1900s. 

seYcral small pumped storage plants were constructed in Europe, mostly in Germany. The first unit in North 

America \Yas the Rock) River Pumped Storage plant construclcd in 1929 on the Housatonic Rh·er in Cmmecticut 
63 

450 

~ IIIII Yearly instalied Pit----- 120 

400 

-----::? 100 350 _ BY early installed nuclear 

~ ·-*- Cummuloted nuclear ___ ,?-' -/-,/' v I 

I 

300 ~- :;c· -- -~~~~ I 80 -. !,2, -· ... 

/ / !i: ~ 250 -. 3 I ,t 0 

0 60 ~ "- 200 ~ a I ~/ G) • -g 150 I V/ 40 :§; z I 

100 

~t:r k' 20 50 d 

0 0 

1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 

Worldwide Installed Nuclear and Pumped Storage Project Development History 

(Source: Alstom Power and UDI database). 

The next major bmakthrough. the adjustabi<>specd design. was developed mainly in Japan_ Whereas. 

with single speed units. the only known variable available to the operator for most of the early designs 

was water tlow, which was controlled by moving the \Vicker gates. However an adjustablc~spccd motorgenerator allO\YS the shaft rotation rate to change as well. By optimizing the two variables, the unit can be 

dispatched at optimum efficiency over a large PO\'--er range. TI1C first adjustable speed system, Yagasawa 

Unit 2, was constructed for the Tokyo Electric Power Company (TEPCO) and became operational in 

1990. 

It is v...orth noting that existing U.S. pumped storage projects were developed in the absence of detailed 

system operations models and ancillary service revenue structures. System planners understood the grid to 

be a careful balancing act requiring an integrated approach to demand forecasting and associated 

generation, transmission and storage. Today, pumped storage systems arc becoming recognized as much 

more than simply load shifting energy storage projects. The ability of pumped storage systems to provide 

electric grid suppo11 through ancillary services such as nct\vork frequency controL grid stabilization, 

reserve generation, and integration of variable rcncwables is significantly broadening tl1e value of 

pumped storage technology. 
64 

\Vhilc otl1cr energy storage technologies have been developed and many arc being investigated. pumped 

storage hydropower is by far the most widely used energy storage application. with more than 127.000 

MW instaJ!cd \\orld,,·idc (EPRL 2010). This worldwide total is expected to exceed 203.000 MW by 2014. 

representing an annual growth rate of I 0% (Ingram. 201 0) The current geographic distribution of the 

worldwide pumped storage flet":t is depicted in Figure A~2. 

In comparison, there arc currently 40 pumped storage projects operating in the U.S. providing more than 

20.000 M\:V. or nearly 2%. of the capacity for our nation· s energy supply system as shown in Figure A~3 

(HDR, 2011). The most recent project constmctt:d in the U.S. \\US completed in 2011. a 40 MW pumped 

storage tbcility developed in southern California as part of a larger water supply pr~jcct. The majority of 

the other 39 projects \vcre constmcted more than 30 years ago. in coordination with large thermaJ or 

nuclear facilities. 

n Japanese pumped storage project is included abo\·e in Figure A~2. in the '"Asia without China and India" category. 

it is estimated that Japan has approximately 26 GW of installed pumped storage capaciJ0 
65 

Existing Pumped Storage Projects in the U.S. (HDR, 2011 ). 

In the last few years. there has been a significant increase in the number of preliminary pcnnit 

applications filed with FERC for pumped storage projects. While a preliminary pcnnit docs not authorize 

construction. it is a strong indication of the interest in oe\\ pumped storage development_ As of January 

2012. FERC has granted preliminary pcm1it applications for more than 34.000 MW of nc>Y pumped 

storage projects in 22 states. with greater than 66% of current pcnnits an.:: for closed-loop sites. Figure A4 presents pumped storage projects currently under development in the U.S. and Figure A-5 shows the 

increase in recent pumped storage project permit applications with FERC (highlighting closed-loop-type 

projects). 

While there is significant interest in developing pumped storage projects. there remain significant 

challenges facing the completion of new prqieets, ranging from licensing. environmental misconceptions. 

the regulatory treatment of pumped storage versus traditional hydropower projects. and a lack of longtcnn markets needed for large capital investments. The main body of this paper discussing these 

challenges in detaiL and proYidcs recommendations for addressing each issue. In addition. NHA has been 

working \Vith FERC and the U.S. Department of Energy on resolving many of the challenges facing 

pumped storage development in the hope of facilitating the growth of this key domestic energy security 

resource 
66 
67 

~ c 

j 

~ 

1 

0 

~ i 

40 

35 

30 

25 

20 

15 

10 

Preliminary Permit Application Trends for Open- and 

Closed-Loop Pumped Storage Projects 

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 

Year 

Preliminary Permit Application Trends for Pumped Storage Projects (FERC, 2012). 
68 

Globally. there arc approximately 270 pumped storage plants either operating or under construction. 

representing a combined generating capacity of over 127,000 MW _ While the majority of the plants usc 

single-speed pump~turbine machines 1

•

1

, 36 utilize adjustable-speed machines - 17 of these are currently in 

operation (totaling 3.569 MW) and 19 are under constmction (totaling 4.558 MW). All of tht":sc units arc 

located in Europe. China. India. or Japan 15 As stated in the main body of this paper, adjustable-speed 

generation units arc able to modulate input pumping power and provide significant quantities of 

frequency regulation. A new key ancillary service opportunity that may be realized through adjustablespeed technology is the added need for regulation at night to accommodate variable renewable energy 

inputs. The ability to provide regulation service in both pumping and generating modes also has a benefit 

in the form of reduced carbon fud consumption and climate change (reduced \Varming). In this regard 

pumped storage is an in~kind compliment to rene\Yablc energy teclmologics. The more energy supplied 

by renewable energy sources that are used to pump means less carbon based fuel energy is used for 

pumping. Therefore, when the pumped storage unit is providing regulation service in generation mode it 

is more likely to be using energy that has come from rencwablcs On the other hand. if combustion 

turbines or coal units arc used for regulation. then as more renewable energy sources are conne(...'ted to the 

grid there is a greater usc of natural gas and coal for regulation - \\-hich some\\-hat counter acts the 

benefits of increased energy from renewables. A representation of the benefits of adjustable~spccd 

technology is presented graphically in Figure B-l. 

The traditional pump-turbine equipment design in the U.S. is the reversible single-stage Francis pumpturbine. ,..,-hich acts as a pump in one direction and as a turbine in the other. Although this technology is 

proven and has worked well for over six decades, there arc limitations to its pctfonnancc, particularly 

\\'hen it comes to the pump mode. While dcsi,!:,rn enhancements over the years have improved unit 

efficiency and pO\\"Cr output frequency regulation \\hile in the pump mode is not possible \\ith singlespeed equipment because traditional synchronous machines arc directly connected to the grid and operate 

at a constant speed and constant input pumping pO\Yer. Tn the turbine mode. the energy produced b:y each 

unit can vary. but docs not operate at peak efficiency during part load. Adjustable-speed machines enable 

14 The tenn "'single speed"' is used to describe conYentional pumped storage units with synchronous speed machines. 

15 ln Japan the use of the term ''variable speed"" is conunon. where in Europe and other parts of the world, the term 

--adjustable speed'. is often used. lt is Jlotcd that early technical papers in Japan do usc the term ·'adjustable speed"" 

(Example: Kita. E .. Mitsnhashi. K., Juwabara. T. ·and Shibuya A .. : ""Design of Dynamic Response of 400 MW 

A4justablc Speed Pumped Storage Unit and Field Test Results for Ohkawaehi Pm,cr Station··. presented July 27. 

1995: !EEE-PES Summer Meeting. San Francisco. CAl 
69 

the power consumed in the pumping mode to be varied over a range of outputs. Modifying the speed also 

allows the turbine to operate at peak efficiency over a larger portion of its operating band. Because 

adjustable-speed technology is \\"ell suited to integration of variable renc\rable generation. many of the 

proposed new pumped storage projects arc considering adjustable-speed machines 

System Reserve and Power Storage from Adjustable-Speed Pumped Storage 

(Source: Alstom Power). 

Adjustable-speed pump-turbines have been used since the early to mid-1990s in Japan and the late 1990s 

in Europe. A main reason that adjustable speed pumped storage \Yas developed in Japan in the early 

1990-s \Yas the realization that significant quantities of oil burned in combustion turbines could be 

reduced by shifting the responsibility tOr regulation to pumped storage plants. In a conventional. singlespeed pump-turbinl.). the magnetic field of the stator and the magnetic field of the rotor ahvays rotate with 

the same speed and the two arc coupled. In an adjustable-speed machine, those magnetic fields are 

dccoupled. Either the stator field is decouplcd from the grid using a frequency converter between the grid 

and the stator winding. or the rotor field is decoupled from the rotor body by a multi~phase rotor \vinding 

fed from a frequency converter connected to the rotor 

A cycloconvertcr was an early adjustable-speed teehnolog! implemented and provides the rotating 

magnetic field in the rotor (sec Figure B-2)_ There arc some limitations with this type of adjustable-speed 

machine_ Cycloconvcrters cannot be used to start the unit in the pumping mode. which means that an 

additional skt.tic frequency converter is required in the powerhouse to start the unit. Cycloconvertcrs also 

absorb reactive power_ which needs to be compensated by converters or provided by the generator. 

Recently there have been improvements in large voltage source inverters that enable the stator magnetic 
70 

field to be dccoup!ed from the grid. This type of conversion is often more popular than the 

cycloconvcrtcr, as this method docs not absorb reactive power and the inverters can be used to start the 

project in the pumping mode 

A double-fed induction motor (DFIM)-gcnerator is the current standard design for adjustable-speed 

machines. Generally. generator-motors arc larger in size and have smaller air gaps than conventional 

machines. l11e stator is similar to that of a conventional generator-motor. l11e rotor requires additional 

features including at least one slip ring per phase (for three phases) and additional protection from 

mechanical stresses. This protection is in reinforcement of the rotor winding ove1i1ang and rotor rim. The 

rotor rim of an adjustable-speed machine canics an alternating magnetic field which may require 

additional design considerations. As the voltage and current ratings of gate-controlled switches (GTOs. 

GCTs, IGCTs and IGBTs) have increased. back-to-hack voltage source converters have become relevant 

for feeding rotor \\ indings of the DFIM .

16 

Schematic of a Cycloconverter or Inverter-Style Adjustable-Speed Motor-Generator 

(Source: Toshiba). 

Adjustable-speed pumping enables tuning of the grid frequency at night or during system disturbances or 

anomalies, as well as the usc of fluctuating renewable wind or solar energies to pump \\ater to the upper 

reservoir. 1l1e principal feature of the adjustable-speed units is that the input power is adjustable when 

carrying out automatic frequency control (AFC) while filling the upper reservoirs. This flexibility is 

frequently employed by adjusting the speed of units during light load periods such as the middle of the 

night and during holidays. ln addition. pump operation with adjustable-speed units is extended in 

comparison to single-speed units. enabling more real-time response to grid conditions. 

1

(' Various sources~ including personal communication (Peter Donalck. MWJI) and Suul. J. A: ·variable Speed 

Pumped Storage Hydropower For Integration of Wind Power in Isolated Power Systems . Norwegian University of 

Science and Technology. Nomay. June 2008. 
71 

As discussed above, globally, there arc 270 pumped storage stations either operating or under 

construction, ·with 36 units consisting of adjustable-speed machines (1tl27 MW). While several projects 

in the U.S. in licensing, initial design or planning phase arc evaluating the usc of adjustable-speed 

technology, all of the existing projects (including those under constmction) arc located in Europe, China. 

India, or Japan. To gain acceptance of this technology in the U.S., the added cost of adjustable-speed 

technology must be offset by valuation in the ancillary services market \-..hich is one of the key market 

points of this paper. 

Table B-l presents a summary of the various features and benefits of adjustable-speed pumped storage 

technology. including technological and economical advantages. 17 

Features and Benefits of Adjustable-speed Pumped Storage Technology. 

Frcqucnc) regulation in pumping mode by 

accommodating variable supply 

More efficient usc of equipment reducing the need 

for thennal plant cycling: critical for avoiding 

greenhouse gas emissions 

Able to take advantage of shifts m gnd d)namics to 

effectively manage variable energy supply and 

capture and store lower cost energy 

Additional abilit) to quickly ramp up 

and down to support more variable 

rene\\ able encr&'Y resources 

Operations and maintenance cost 

reduction and increase of equipment 

lifespan: greenhouse gas offsets if 

market develops 

Cost nlinimi.sation and operation of 

existing units at peak efficiency: 

support !,'TO\\ th of additional 

renewable encrf.,'Y resources 

There is an increase in enerm gencmtwn due to the TlUs results in an estnuated mcrease 

fact that the tmbine c~m be operated at its peak in energy generated on the order of 

efficiency point a under all head conditions. 3% annually. 

lmprO\ed balancing of \<mabie energy units More stable cqmpment translates into 

(\.~incVsolar) and coordination of overall energy mix risk reduction and increased 

reliability of the domestic electric 

grid 

17 Note: While there arc significant advantages with adjustable-speed pump-turbines. the majority of pumped storage 

projects under development around the \Yorld continue to be single-speed pump-turbines. A primary reason for this 

is that there remains substantial grid flexibility in many regions of the world where there are strong transmission 

intcrcoimections and unconstrained hydropmvcr operations_ two conditions that typically do not exist in the U.S. 
72 

The CHAIRMAN. Thank you, Mr. Seifarth. I think you recognize 

you are looking at two women that believe a lot in our hydro resources and the opportunities for storage through our hydro. Thank 

you all for your comments this morning and the discussion that we 

are about to have. 

We talk a lot in this Committee about the breakthrough that we 

saw with natural gas when hydraulic fracturing came along. We 

were at a point where everyone was talking about, you know, ‘‘the 

end is near’’ type of a thing and, quite honestly, our technologies 

are always moving forward. We certainly hope that they are. And 

that was clearly a breakthrough when it comes to the oil and gas 

sector and how it has advanced forward. 

We have heard about the opportunities that we have now with 

energy storage technologies, but you also, all of you, I think, have 

raised a few of the challenges that we have. You have some scientific limitations. I think it was you, Dr. Sprenkle, who said we 

are going to need a new manufacturing paradigm. Industrial acceptance is an issue. 

I guess the question that I would pose to all of you is, in order 

to really advance our energy storage technologies, do we need a 

breakthrough? Do we need, kind of, the hydraulic fracturing equivalent in order to advance us to that next level? And if so, what is 

it? Or do you think that we are just going to continue to move 

along as we have been? Again, I throw it out to each of you for your 

input here. 

Go ahead, Dr. Sprenkle, you get to start. 

Dr. SPRENKLE. Thank you. 

So, there are tremendous opportunities for breakthroughs in this 

field. What we’re seeing now is where there’s high value, we can 

make it work, but if we want energy storage, kind of, ubiquitously 

deployed across the grid, it’s going to have to be much cheaper. It’s 

going to have to last a lot longer than it does today, and we’re 

going to have to show that safety. And that’s what, through the 

R&D efforts is, hopefully we can drive that down to where it’s a 

natural grid asset to put on there. And for most of the, kind of, 

lower value applications, storage can be able to provide that service, in my mind. 

The CHAIRMAN. Mr. Kathpal? 

Mr. KATHPAL. From our perspective in a business, the good news 

is we don’t need a breakthrough, but breakthroughs are going to 

happen, as Dr. Sprenkle suggests. 

So the technology we have today of lithium-ion is mature and is 

at a cost that is appropriate for a lot of grid and utility applications 

and its cost will continue to decline. 

Today we see it as already available to be in a mainstream utility planning and procurement type of setting. And the good news 

is that we will continue to have further technology evolution that 

will only open up more applications and lower costs to consumers 

further. 

The CHAIRMAN. Good. 

Mr. Moores? 

Mr. MOORES. Yeah, I agree with that. 

For me it was always a matter of economics really. Can you get 

cheap enough batteries, abundant production of batteries that can 
73 

be used in numerous applications, ultimately electric vehicles is 

really what’s kicked this off. 

And lithium-ion cells, you’ve had that really the last two and a 

half to three years. Now we see lithium-ion cell costs as one big 

contract under $140 per kilowatt-hour. Even in 2009 this was 

$1,000 per kilowatt-hour, in and around. 

So it was a case of actually waiting for these industries to mature and to become cheap and to get up to scale and other R&D 

benefits through the cathode and anode. But ultimately, it’s coming 

down to scale. 

The battery is getting better as well, not just through the actual 

cell itself, but you build these lithium-ion batteries into packs and 

then they go into vehicles or they go into energy storage units. Now 

there’s technology software management systems that control the 

energy within those battery packs, so that’s improving battery life 

without necessarily the batteries themselves improving. The whole 

system is becoming far more intelligent, and I think that’s going 

to drive this next five years. 

The CHAIRMAN. Very good. 

Mr. Seifarth? 

Mr. SEIFARTH. I agree with Simon. 

The technology there is in the electronics. And it’s interesting because we’re still talking about hydro after 150 years. It’s the old 

reliable and it’s changing with the times as well. 

The innovation in hydro is coming with today’s high technology 

pumped storage facilities having the ability to react in milliseconds 

through a combination of hydraulic innovations and also electronic 

innovations, you know, there’s automation, automation controls, 

frequency control, full converter frequency control for hydroelectric 

turbines. 

We have a reliable energy source in hydro and what we need 

now is some legislation to help advance that with the newer technologies. Think of it in a way of having that great, old Chevy car 

you had and the engine is still solid as a rock and you’re getting 

more efficiency out of that car by putting in more technology. So 

it’s the right sustainable thing to do. 

And after all these years, we’re still, you know, lucky enough to 

be talking about hydro as we talk about grid reliability, black start 

capability and the security of the country. 

The CHAIRMAN. Very good. 

Thank you, all. 

Senator Cantwell. 

Senator CANTWELL. Thank you, Madam Chair. 

Well, it is hard not to follow up on that. Mr. Seifarth, what kind 

of resiliency do you think this investment also makes against the 

changes to snowpack and the fact that continuing to make investments in storage is also important from that perspective of the 

change in dynamics we are seeing? 

Mr. SEIFARTH. Well, I think there you’re seeing a lot of scientists 

and others looking at some closed loop systems. And those, what 

I mean by closed looped, obviously, we have a captive upper and 

lower reservoir that’s not necessarily connected to an existing 

water stream or water source. 
74 

In addition to that, you see owners retrofitting their new plants 

based on the changes that they’re seeing in the hydrology of the 

plant. There are owners right now who are actually putting minimum flow units into their units so that they can aerate and provide power even with changing environmental conditions. So hydro 

is extremely adaptable and again, it’s keeping up with the technology as it presents itself in a changing climate. 

Senator CANTWELL. Dr. Sprenkle, if PNNL and other labs 

stopped doing the research, would somebody pick up the slack? 

Dr. SPRENKLE. For the new technologies that are coming out? No. 

As you’ve seen with lithium-ion. So, the first paper on lithium-ion 

was issued in 1976. The first materials that are used today were 

in the late ’70s. It took until ’91 to get that material into the first 

commercial product and until today to get to the prices where it’s 

competitive. And so, there is a long development time with these, 

to get these to a level of maturity where they can make that transition out. 

That’s—we saw it with lithium-ion. That’s often beyond the time 

scale of a lot of companies. 

Senator CANTWELL. And so, what would you say the priorities 

are to keep focused on, from a lab perspective? 

Dr. SPRENKLE. I think, as we kind of outlined in my opening 

statement, it is materials. We need to focus on earth-abundant materials that inherently have a low cost. We need platforms that can 

take that and quickly get it to a point where a company can come 

in and there’s some level of confidence with that, that it will work, 

that it will be reliable and it can be deployed out there. 

From a utility perspective, they want to see something that is robust and reliable and we have to be able to take those quickly to 

that point. 

Senator CANTWELL. What do you think about the fact that we 

have Mr. Kathpal, to Mr. Seifarth—I mean, it’s a broad spectrum 

of storage. What does that tell you? 

Dr. SPRENKLE. Well, I think we have, you know, there’s a place 

for everything in this. I mean, we need that storage capacity, however you can get it, whether it’s bulk storage or whether it’s distributed at the home to community, to substation, to central generation and trying to firm up baseload. You know, there’s a role for 

it in all aspects. And those may all not be the same technologies. 

There may be different performance profiles that favor one over the 

other for those applications. 

Senator CANTWELL. Well, I guess that was my point, that the 

breadth and depth of the research that you’re doing can apply in 

lots of different things. 

The one thing that I did learn in the private sector that I 

thought was probably the most valuable thing is that you can have 

the advent of technology. 

Dr. SPRENKLE. Yeah. 

Senator CANTWELL. But it can take sometimes as much as 20 or 

25 years for the business model to develop. 

Dr. SPRENKLE. Yeah. 

Senator CANTWELL. So it’s a long time. 

[Laughter.] 
75 

But it’s well worth the pursuit. I just hope that we continue to 

make this investment. And I think for us in the Pacific Northwest 

who want to keep marrying up the efficiencies of smarter intelligence that software delivers to renewables, but also into storage 

and taking advantage of those resources, we want to keep making 

the investment. To me, even if it was just on the hydro side, it 

would be well worth the investment. But obviously, with everything from electric cars to everything else, there’s lots of opportunity. So I hope we make the right decisions here. 

Thank you, Madam Chair. 

The CHAIRMAN. Thank you, Senator Cantwell. 

Senator Gardner. 

Senator GARDNER. Thank you, Madam Chair. 

Thank you to the witnesses for being here today. 

We talked a little bit about the electronics and some of the systems that are helping make battery storage more efficient, more 

productive. Could you talk about some of the technology, the physical technology, of batteries, like 3D lithium-ion structures? 

Is that where we’re heading, sort of, the 3D battery, the structure with, like, the foam batteries? 

Dr. SPRENKLE. I think there are a lot of opportunities in that, 

that agile manufacturing, wherever you can get these out, with 

these different systems. 

It is still, I think, in the future yard looking at for grid-scale batteries, ultimately, something that has low cost, you know, sodium, 

iron, those types of systems and that can be done in an aqueous 

base so you’d have that inherent safety. 

Senator GARDNER. Dr. Sprenkle, in terms of the safety issue 

itself—one of the interesting articles that came out during the hurricanes over the past month, I believe it was Florida where Tesla 

had reprogrammed certain Tesla vehicles to allow the battery to 

have a further range because it was just a software that they could 

have purchased additional range for the Tesla if they paid additional dollars, but Tesla gave everybody a two- or three-day window 

or a week, whatever it was, to have the extended range just 

through a software update. 

So when we are doing battery storage, battery development research, are we also looking at the cyber components of what it 

means to just do a software update that could affect somebody’s 

battery? 

Dr. SPRENKLE. Yeah. 

Senator GARDNER. How does that work? 

Dr. SPRENKLE. There is a strong cyber component to storage, just 

in—it can offset a lot of things, but you also have to be able to control that because it can take or give energy, especially to the grid 

in there. 

So, yeah, those are the things that I think, probably just now, 

that people are really starting to focus on as we do get more deployments on it from the R&D side of it. You have focus more on 

the materials and technologies at this point, so—— 

Senator GARDNER. Dr. Sprenkle, as we get further into the recovery of and the rebuild of infrastructure in Puerto Rico, what opportunities should we be looking at with the Department of Energy to 
76 

look at battery storage as part of the solution as we rebuild Puerto 

Rico’s grid? 

Dr. SPRENKLE. I think you look at it from a resiliency perspective. You look at that hierarchy of resiliency. 

We’ve already seen reports coming out of Florida where homes 

that had solar plus storage and, you know, critical emergency shelters that had solar plus storage were able to provide those essential 

services. If you have that at the home and then you have storage 

integrated at the community and then you have it at the substation. You have, no matter where you’re impacted, you’ve got 

those different levels. 

There is the analysis in trying to figure out where the value 

proposition is. Ideally, we want that distributed throughout. And to 

do that it’s going to have to be cost-effective for all those applications in order to get that shared amount of storage out. 

So those are areas where DOE can, both in terms of the analysis, 

looking at it and the development and how those systems integrate 

and can aggregate when needed. 

Senator GARDNER. We have talked a little bit about hydropower. 

We have, obviously, several different opportunities with the pump 

back operations in Colorado, production facilities and the need to 

store additional water and also the need to build out existing structures that lack a hydro component. 

Permit reform has to be part of our solution here as well when 

we look at permitting new water storage facilities, permitting new 

hydropower production facilities. I think that has to be something 

that the Committee looks into because you could have an opportunity for hydropower, but no permit means you cannot move forward on it. I think that is something that this Committee has to 

address. 

And finally, I would just say that over the past weekend, we had 

some great stored energy occur in Colorado in the form of a lot of 

white powder—and it is going on our ski resorts that are now opening in mid-October. I appreciate that opportunity for that storage 

of water to brag a little bit about Colorado. 

The CHAIRMAN. Send some of it our way, please. 

[Laughter.] 

Senator Franken. 

Senator FRANKEN. Thank you, Madam Chair, and Senator Gardner, thank you for bringing up Puerto Rico and the storage there 

because after the last couple months, or few weeks, we have seen 

Hurricanes Harvey, Irma, and Maria really demonstrate the risks 

that the grid faces from extreme weather. 

Some communities in Texas and Florida underwent days or 

weeks without power, and now American citizens in Puerto Rico 

and the Virgin Islands are facing a humanitarian crisis and the 

Federal Government needs everything it can get to help. It could 

take many months, not weeks, to get power back to these communities. This is, obviously, a serious risk to people’s health and 

safety. It affects hospitals, water treatment and pumping systems, 

et cetera. And our economic supply chain is disrupted as well. 

We met with FDA Commissioner Gottlieb last night, the HELP 

Committee, at an informal gathering with him and he is very concerned about the pharmaceutical plants in Puerto Rico. I think 
77 

they produce 25 percent of our exports of drugs. There are drugs 

there, 13 of which are not produced anywhere else, and the FDA 

says we are really short. This is really an emergency. 

We know we are going to see more hurricanes and extreme 

weather events. With 80 percent of the grid in Puerto Rico destroyed, we need to rebuild and we need to rebuild a more resilient 

grid that is able to withstand the effects of these disasters. 

Mr. Kathpal, your company, AES, provides power to Puerto Rico 

and to the Virgin Islands. How can we rebuild the grid in a more 

resilient way? And what role do you see for energy storage? 

Mr. KATHPAL. Sure. Thank you for the question, Senator 

Franken. 

We have no doubt that storage will play a role in the rebuilding 

and in the new form of grid in Puerto Rico and potentially other 

affected places. 

We’re seeing some response organizers right now proposing popup solar and storage to power hospitals and other critical facilities. 

That’s one way that storage can bring near-term resilience in the 

wake of a disaster and we also believe that there’s going to be a 

role for storage at all levels of the grid, from the large-scale down 

to the distribution systems and then behind the meter as well as 

in microgrid applications. 

Senator FRANKEN. You know, as Congress considers a supplemental aid package to help the people of Puerto Rico and the U.S. 

Virgin Islands, I really think it is critical that a package allows infrastructure to be rebuilt in a renewable and sustainable way. 

I think this is a tragedy, obviously, but given that we have to rebuild this from approximately 80 percent destroyed, I think that it 

is an opportunity too, to build in a way that is resilient and which 

also helps reduce the threat of damage in future disasters. 

And I just want to ask my colleagues to—I have discussed it with 

the Chairwoman. I think this is something that we could all get behind on both sides of the aisle which is just to take this disaster 

and use it to give these two territories the kind of resilient infrastructure that they will need to survive the next one so we don’t 

have to go through this kind of dire emergency where people’s lives 

are at stake and where it is impossible because, I believe, Puerto 

Rico is an island and I think the Virgin Islands are islands, too, 

surrounded by ocean. 

[Laughter.] 

I really think that this is something that we should do in a bipartisan way, in a way that is just smart and also where we could 

learn something and also we could gain something. 

So, that is just a little speech I have made to use the rest of my 

time. 

The CHAIRMAN. Thank you, Senator Franken. Know there are 

many members of this Committee that are very interested in how 

we can help Puerto Rico and the Virgin Islands build an energy 

grid that is more sustainable, that is more resilient, and making 

sure that we do this in a way that provides benefit. 

There is one thing about just being able to turn the lights on 

today. There is another thing about ensuring that there is a better 

path forward. I noted that you, Dr. Sprenkle, used the term, ‘‘regional technology demonstrations.’’ It just seems that through the 
78 

tragedy we are seeing on the islands, there may be an opportunity 

here as we look to these islanded grids and figure out a better way. 

So—— 

Senator FRANKEN. Including more microgrids, in other words, 

where—— 

The CHAIRMAN. You know I love microgrids. 

Senator FRANKEN. You and I both. 

The CHAIRMAN. Yes. 

Senator FRANKEN. I think so many of us love, love microgrids. 

The CHAIRMAN. Senator Risch, do you love microgrids? 

Senator RISCH. Well, I am going to talk about something else. 

The CHAIRMAN. Alright. 

[Laughter.] 

Senator RISCH. First of all, let me say, thank you for holding this 

hearing, Madam Chairman. 

In Idaho, at the Idaho National Laboratory, we have been doing 

this for a long time. In fact, every time there is a launch from Florida that goes into space it carries products that were manufactured 

at the lab for storage and for generation for years and years as 

they make a space voyage. So we are into that. 

But I am going to talk about something more down to earth, if 

you would. They are starting to discuss a very significant proposal 

in Idaho for, I guess, what people refer to as ‘‘repumping project’’ 

where, when electricity is not used during the day, it is used to 

pump water back up and use it again at night. There is some of 

this, I know, that has gone on. Are any of you familiar with that 

technology, that storage technology? Have any of you worked any 

projects like that? Mr. Seifarth, it looks like you have something 

on your mind. 

Mr. SEIFARTH. Yes, sir. Thank you for the question. 

Yes, our company, Voith, participates primarily in these pumped 

storage hydroelectric projects and they can be from a small scale 

to a very, very large scale. 

For example, just two hours from here is a project called Bath 

County in Virginia. It’s one of the largest pumped storage facilities 

in the world at around 3,000 megawatts, and it works just on that 

premise is during off peak hours and it pumps water to the upper 

reservoir and then during peak demands it releases that water. In 

addition to that it provides ancillary services to the grid by reacting very quickly to keep the grid stable and secure and reliable for 

both power and frequency control. 

There are advancing technologies that help make this even react 

faster in milliseconds, as I mentioned. So yeah, those technologies 

exist. They have been, pumped storage has been around for 100 

years. It is well-proven, but it’s been able to adapt to be able to 

support the other generation technologies that have come on board. 

So, it’s kind of like Old Faithful there. It’s been able to adapt and 

support a variety and a good mix for American power generation. 

Senator RISCH. What is the fall on the reservoir that you are 

talking about? What is the—— 

Mr. SEIFARTH. So this one located—— 

Senator RISCH. Approximately. 

Mr. SEIFARTH. This one located in Virginia is quite high. It’s 

roughly 1,000 feet. And that’s one of the larger ones. 
79 

There’s also many around the country, roughly 42 right now, 

with a lot more that are viable, but you just have to get through 

that hurdle of the licensing process. 

Again, our company believes in a good mix, a good, diverse mix, 

not a one-size-fits-all, but certainly hydropower and, in particular, 

pumped storage must be considered when we talk about a reliable 

U.S. energy grid. It would be that vehicle that cannot only produce 

electricity but also store electricity and be able to regulate. 

Senator RISCH. I appreciate that. 

Anyone else want to weigh in here? 

Mr. KATHPAL. Thank you, Senator. 

I just wanted to add a comment to provide some contrast to 

pumped hydro technology because I would like to respectfully disagree with Mr. Seifarth’s earlier comment that pumped storage 

hydro is the only proven form of energy storage. 

We found that batteries are increasingly being selected in utility 

applications at scale with the additional advantages that they can 

be sited where they’re needed, and they can be deployed in a quick 

timeline. 

So, I think appropriate for technology with the type of land disturbance of building a pumped hydro plant, the development and 

permit timelines are long, but as a contrast we recently deployed 

the largest battery energy storage system in the world outside of 

San Diego in a matter of six months. 

And that was prompted by a—— 

Senator RISCH. And what is the size of that? Put that in perspective for me. 

Mr. KATHPAL. That’s 37-1/2 megawatts and it provides power for 

four hours. 

Senator RISCH. That is potential. 

Do you want to respond? 

Mr. SEIFARTH. Certainly. 

And again, we’re here to support a diverse energy portfolio. If we 

talk contrast we’re talking 3,000 megawatts of pumped storage and 

it can deploy that over the course of many, many hours. Again, the 

power density is quite high. 

So I think there is, there’s certainly room for the grid to have 

stability for all aspects, from very large storage technologies that 

really can help control and stabilize a large grid to these microgrids 

and point of use that the battery niche market can definitely fill 

the hole in the gap. 

Plus hydro, like I mentioned, has been around for a long, long 

time and the closed loop systems are environmentally friendly and 

reduce the amount of land mass that’s required. 

In addition to that we have a fleet of 42 pumped storage facilities 

in the U.S. that are there. They’re ready for modernization to help 

support any other renewables and battery technologies that come 

on the scene. So it would behoove us to help modernize those existing facilities. 

Senator RISCH. I was surprised to hear you mention Virginia. I 

would assume most of those 42 are in the Western states. Is that 

right, given the geography? 

Mr. SEIFARTH. They spread coast to coast. 

Senator RISCH. Really? 
80 

Mr. SEIFARTH. You know, obviously, we like a delta, an elevation, 

but there’s Luddington up north. There’s facilities out in California, 

in the Southeast. So it’s where we have that topographical differential of anywhere from 400 to over 1,000 feet are prime locations. 

Senator RISCH. Thank you. 

Thank you, Madam Chair. 

The CHAIRMAN. Thank you. 

Senator King. 

Senator KING. Thank you, Madam Chair. I wanted to thank you 

for the treats from the Alaska Community Foundation. I’m going 

to penalize those who don’t show up by taking theirs. 

[Laughter.] 

I appreciate that. 

Just first a statement. I want to thank all of you for being here. 

I want to thank the Chair for holding this hearing, because I think 

it is one of the most important issues in energy today. 

We are moving toward renewables. Of course, the question about 

renewables is wind, it doesn’t always blow. The wind doesn’t always blow, the sun doesn’t always shine, but renewables plus storage equals baseload. 

That’s really why I think this is so important, and it’s critical to 

be talking about these issues and how we encourage the development of additional storage technologies. 

It seems to me that one of the other things we need is a level 

playing field. So, for example, if a homeowner has storage in their 

house along with solar panels, the value of that to the grid should 

be part of their payment, if you will. 

What worries me about the various schemes for net metering and 

those kinds of things is it’s sort of a blunt instrument, and there 

is an important value to provide to the grid. 

I guess what I want to ask—perhaps, Mr. Sprenkle, you are the 

right guy to ask this question. Are we making the kind of progress 

in the economics and density of storage that we have made in recent years in solar panels? In other words, are we seeing a significant cost come—down? Because as that cost comes down, the whole 

world changes. 

Dr. SPRENKLE. So, I do think in certain things that we are seeing, like I talked about flow batteries, we are seeing those prices 

come down to where they’re getting closer. 

The problem with a lot of these technologies that would work 

very well on the grid—provide you six hours and longer, eight 

hours of duration to be able to peak shift the renewables. The problem is there’s no intermediate or industry. So lithium-ion came up 

through commercial transportation and now we’re seeing it on grid. 

And so, a flow battery, because of the lower energy density, 

doesn’t have that same space. And so, they have to—— 

Senator KING. In terms of the technology generally, not just of 

the flow battery, but technology, are we seeing progress? I assume 

Tesla—— 

Dr. SPRENKLE. Yes. Lithium-ion prices have dropped dramatically over the last five years, that has enabled a lot of market penetration. 

Senator KING. I think another important aspect of this is the— 

well, let me back up. 
81 

In Maine, in your power bill, transmission and distribution cost 

more than generation. It is more than half of the bill. And most 

of us who have been in this industry for a long time always think 

about the cost of generation, you know, whether it is solar, hydro 

or nuclear, or whatever. 

But transmission is a huge cost. Storage enables us to avoid 

transmission investments, isn’t that correct? You are nodding, but 

the record won’t—— 

Dr. SPRENKLE. Won’t show it. 

Yeah, so I think in a lot of the, as part of our program we’ll go 

out and work with, you know, to look at the locational value of energy storage. And when we do that—— 

Senator KING. You are on a peninsula and need to build a new 

line to get the August peak. If you can do storage down there for 

a third of the cost, everybody is better off. 

Dr. SPRENKLE. Right. 

Senator KING. Isn’t that correct? 

Dr. SPRENKLE. So, we’re seeing that now. 

We’re doing a project in the San Juan Islands in Washington. 

And Decatur Island is the first, where the transmission line comes 

in for 14 islands. And that, there’s a battery system that’s going 

to be sitting there and most of the benefits from that, and we’re 

still in the analysis part, is going to be the transmission and distribution deferral. Benefits of just them not having to upgrade that 

system by using that battery. 

Senator KING. Mr. Kathpal, do you see that happening? 

Mr. KATHPAL. Absolutely. 

AES recently partnered with Arizona Public Service, a utility in 

Arizona, to begin deploying a battery in a small town where demand is growing. The town is 90 miles outside of Phoenix, so the 

last length of transmission and distribution to it is a 20-mile line 

that goes through some pretty rough terrain. The utility selected 

placing a battery at the end of that line as a more economic solution than upgrading the transmission or distribution lines. And 

they’ve said that this is at, ultimately, half the cost to the consumer of what would have been the traditional transmission or distribution solution. 

Senator KING. You are obviously working with the utility that 

understands this. 

One of the problems, it seems to me, in the long-term that we 

have to think about is how do we reward utilities for solutions that 

do not involve building things? 

In other words, the traditional model of utility income is a return 

on investment. So there is an incentive to invest. And if you are 

doing it for half the price, that utility, theoretically anyway, is losing a significant amount of income because they would have built 

that line and gotten a rate of return on it and that is good for their 

shareholders. 

So we need to not take income away from the utilities, but to 

think of other models for their economic performance other than 

rate of return on investment when, in fact, we can come up with, 

through storage and other technologies, lower cost investment 

which would benefit the ratepayers. 
82 

I appreciate your being here. And Madam Chair, I really appreciate you having this hearing. This is important stuff. 

Thank you. 

The CHAIRMAN. It is important stuff. Thank you. 

I appreciated the acknowledgment there that when we are talking about storage, you want to have access to a great deal of it, as 

you noted Mr. Seifarth, and the applicability with the pumped 

hydro storage. 

But I think about the very small villages in Alaska. Again, the 

smallest, the micro of the microgrids, and how in a place where we 

don’t have interconnection between the communities, it has to be 

these little, stand alone systems. 

The opportunity to go out to the Village of Kongiganak and to see 

how they have literally taken Chevy Volt batteries and layered 

them in a little shed outside. That is their battery storage unit, if 

you will, for the three wind turbines that they have, allowing them 

to get off diesel generation for, at least, a couple days when the 

wind is really picking up. Then when it stops we have some backup 

there. So we need to have it, clearly, at both ends. Recognizing 

that, I think, is important. 

Senator Duckworth, I will let you ask questions. I am going to 

have another round here, but since you have just come in to the 

Committee, welcome. 

We have a great group of folks here today. 

Senator DUCKWORTH. We do, a real good news story, especially 

for my home State of Illinois. 

Thank you, Madam Chairwoman, for convening this very important conversation. 

As we have already heard, energy storage holds enormous prospects for a more flexible, cleaner and affordable electricity grid. 

In my home State of Illinois, we’re not only leading energy storage research and development, we’re also manufacturing the technology and we’re exporting it. So it is actually creating jobs and 

bringing money back into the U.S. 

One company that comes to mind is a group that emerged from 

a school project at Northwestern University, SiNode Systems. 

Today, SiNode is manufacturing battery technology on the South 

Side of Chicago and exporting it to countries around the world. 

Their technology is helping electrical vehicles go further and making our cell phones last longer. And trust me, my cell phone needs 

it. I have a three-year-old, so she’s on there all the time. 

In addition to entrepreneurs like the folks at SiNode, Argonne 

National Laboratory is also on the cutting edge of energy storage 

research. 

Dr. Sprenkle, your lab is a member of the DOE Joint Center for 

Energy Storage Research (JCESR) which is led by Argonne National Laboratory in Illinois. Your collective work has brought the 

private sector, universities, and the Federal Government together 

to solve challenges of developing next generation battery technology. 

Can you share your thoughts on the need for continued research 

in new chemistries and materials to address the nation’s future energy storage needs? 

Dr. SPRENKLE. Yes, thank you for the question. 
83 

We are proud to be part of the JCESR. JCESR has really done 

an excellent job, in terms of advancing the state-of-the-art, in terms 

of our ability to characterize materials, our ability to predict new 

material systems. 

The goal is eventually these will go into the low-cost systems 

that can be deployed across the country and hear from multiple applications. 

And so, it is really looking at taking a step change, in terms of 

the base materials cost that we will need and being able to achieve 

the long lifetimes that we want from these grid-scale assets in 

there. 

Senator DUCKWORTH. Well, what does that mean for consumers, 

these investments? And especially, you know, my understanding is 

that the materials that we are looking at now are things that we 

never would have looked at even 10, 15 years ago as potentially 

viable. 

Dr. SPRENKLE. Right. 

So, we’re—as we’ve looked at, you know, distribution and transmission deferral, those are exact savings to consumers, and when 

we go look at microgrids and systems that could be set in a 

microgrid, but then called on to reduce peak generation so we don’t 

have to build a new peaker plant, those all go directly into saving 

the consumers money in this. 

Senator DUCKWORTH. Thank you. 

As the panel I am sure knows, last week Secretary Perry directed FERC to issue a sweeping proposal to redefine how certain 

power generators are compensated for their electricity. 

API, the Natural Gas Supply Association, and the wind and solar 

industries have all united against the proposal. Mr. Kathpal, what 

is AES’ position on this? 

Mr. KATHPAL. Thanks, that’s obviously a good question and 

something we’ve been thinking about a fair bit. 

I would say that, first of all, there’s no market design that’s perfect. We agree that resilience is important and certainly we believe 

that energy storage and other resources have resilience attributes 

that are not always taken into account, whether it’s being valued 

by power markets or other parts of the energy policy and regulatory world. 

That being said, the proposed rule focuses on one resilience attribute, as far as we can tell, which is the onsite availability of fuel. 

And again, that’s a relatively limited view, given the various other 

resilience attributes that we think storage and other resources 

bring. Some of those being providing grid stability in the shortterm on an operational timeframe, as well as being rapidly deployed in places where power is needed on a planning timeframe. 

The good news is that FERC is currently examining some of 

these issues with respect to storage already within a notice of proposed rulemaking on energy storage issues within the power markets. We’re hopeful for developments there as well as for market 

solutions and policy solutions that would improve the valuation of 

those resilience attributes. 

I would say that the proposed mechanism in the rule you’re referencing would be a significant change to U.S. market design and 

should certainly be subject to public debate. 
84 

Senator DUCKWORTH. Thank you. 

Does anybody else have a comment or want to make a comment 

on this? 

No one is going there? 

[Laughter.] 

Alright. 

Then I want to follow up a little bit, Mr. Kathpal. 

Last year, the Illinois State Legislature passed a law that will 

invest $750 million in wind and solar initiatives. Those investments will build on an already strong wind and solar industry in 

my home state. In fact, since we started pursuing investments in 

wind, we have created 100,000 jobs in Illinois alone, just in wind. 

As you mentioned in your testimony, energy storage is a key enabler of renewable integration into the electric power system. In 

addition to helping wind and solar, are there ancillary benefits to 

energy storage? 

Mr. KATHPAL. Yes, absolutely. 

So we believe that in addition to working well with wind and 

solar, energy storage is great because it’s a resource neutral, fuel 

neutral, flexibility tool so it can be used to provide capacity where 

a capacity on its own is needed. It can be paired with renewables 

to lower generation costs, as my company is doing on the island of 

Kauai, providing 28 megawatts of solar, paired with five hours of 

batteries at a fraction of what consumers on that island would pay 

for burning oil. 

We have experience in deploying storage in nine U.S. states and 

six countries, so it seems like in pretty much every supply mix, 

every regulatory structure, we’re finding a business case for energy 

storage. Sometimes that’s ancillary services and in an organized 

power market, sometimes it’s a specific co-benefit of pairing storage 

with a type of generation and sometimes it’s on the infrastructure 

side with transmission or distribution applications. 

Senator DUCKWORTH. Thank you. I am out of time. 

Thank you, Madam Chair. 

The CHAIRMAN. Thank you, Senator. 

Mr. Moores, I do not want to leave you out of this conversation 

because of what you have brought to the table as we are discussing 

these opportunities when it comes to energy storage technology. 

As I mentioned, we have to be able to have the minerals, the critical minerals, that allow us to lead in these spaces. 

You mentioned China and not only pointed out that China has 

significant quantities of critical minerals, while we, in this country, 

also have some good supplies. I know in Alaska we are looking 

with great interest at some of the supplies that we have, but we 

also recognize that in addition to China having the materials, they 

have the factories, they are doing the processing, they really are in 

control of many of the parts of that supply chain. 

I think it was you, Dr. Sprenkle, who mentioned the United 

States and the leading role that we have played with the development of the lithium-ion battery. But Mr. Moores, where do we go 

if we are in a situation that I have outlined where we are reliant 

on other nations, for at least 50 percent of 50 different minerals? 

We are 100 percent reliant on 20 different minerals, nine of which 
85 

China is the primary source, and at least 50 percent of another 30 

minerals. 

In addition to not having the resources here and also relying on 

China for processing of minerals, how vulnerable does this make 

us? How concerned are you and others in our ability to continue 

to lead in these areas as we try to develop these technologies if we 

do not have these critical minerals? 

Mr. MOORES. Yeah, thank you for the question. 

I wouldn’t be necessarily concerned about every rare mineral or 

mineral that you can’t pronounce or that sounds like a rare mineral because they’re used in very high-tech applications. They 

might be very niche. They’re likely to be part of a big growth industry. 

I would be very concerned about technologies that are going to 

be called to the next big industry, energy storage, because that’s 

going to fundamentally alter the car industry, alter sectors. It’s 

going to fundamentally alter the energy space over the next 100 

years. 

And so, those core minerals, well let’s say the battery technology 

that will be central to that for the next 10 years, 10 to 15, will be 

lithium-ion batteries. That’s because of the cost. It’s because of the 

scale they’re being produced. They’re going to be produced over the 

next five years with the rise of these battery megafactories around 

the world. And so, really, I’d be looking at the four critical raw materials that go into a lithium-ion battery, which are lithium, graphite, cobalt and nickel. 

But again, these aren’t nickel as a commodity. It’s a metal, but 

it’s actually the nickel chemical that goes into a battery, very specialized processing route. Not many people do this. 

Of those four raw materials, for batteries, the U.S. imports 100 

percent of each. So no mining of these speciality raw materials 

happens in the U.S., yet, apart from the—— 

The CHAIRMAN. Explain to me, if you will, because you have used 

that term now several different times that we need to view these 

not as commodities, but specialities. 

Mr. MOORES. Yeah. 

So these are niche—essentially a commodity you would dig out 

of the ground and you have light pile, for example, of coal and you 

have a customer that can use that product, pretty much, straight 

away. It’s driven, really, by the supply side, not the customer. 

For these raw materials they are, they change per customer. So 

the lithium that one battery company might get might be slightly 

different to the lithium that another battery company gets. And 

these are very specific customers. So really there’s a tailoring that 

happens and a couple of steps of processing, chemical processing, 

that happens to the raw material. It’s those steps that the industry, that countries actually, need to fully understand. 

The CHAIRMAN. Because we are not doing any of that processing 

here, are we? 

Mr. MOORES. No, no. For lithium—— 

The CHAIRMAN. Is most of it happening in China? 

Mr. MOORES. Yes. 

But for lithium you have two companies. You have Albemarle, 

which is a U.S. company, and FMC Lithium as well. And they do 
86 

produce some battery-grade lithium here, but they’re not sourcing 

the lithium from the U.S. For the others, no. Happens in giant 

graphite, 100 percent in anode graphite, it goes into a battery, is 

from China. 

The CHAIRMAN. One hundred percent of it. 

We have some graphite up North that we are looking to develop. 

Mr. MOORES. Yeah, there are two areas. There’s Alaska, there’s 

Alabama in the U.S., that have been developing resources and it’s 

quite interesting. It’s not just the resource, it’s the processing that 

happens to make these battery-grade materials. And that’s really 

where the gap is. 

The CHAIRMAN. Is it an issue of investment in the supply chain 

here in the United States that is holding us back or is it our regulations? I know that from a processing perspective that is a real 

challenge for us, but is it more on the investment side, in your 

view? 

Mr. MOORES. Yeah, investment would be number one, then regulation, number two. 

But I think the investment, as this industry grows tenfold, the 

battery to lithium-ion battery model grade, tenfold over the next 

10, 15 years, then the investment should become obvious. It should, 

the money should come from somewhere. At the moment, it isn’t, 

but that should sort itself out in a reasonable timeframe. And—— 

The CHAIRMAN. So you think just increased demand will bring 

that investment on? 

Mr. MOORES. Yup. 

The CHAIRMAN. You think that that will marry up here. 

Mr. MOORES. Yeah. 

I think so. I think at the moment it’s all coming from institutions, whether New York or San Francisco or places like this. And 

they’re starting to understand the battery story and how big this 

is going to be and how disruptive. 

But still, the problem is all of these companies that are making, 

that are building the mines or doing the processing plants, batterygrade processing plants, are also very small companies. Institutions 

can’t invest in them because they end up owning 100 percent and 

they can’t get in and out and do their investment thing. So for now, 

it’s a niche industry going into the mainstream and we’re, kind of, 

stuck in the middle at the moment. 

These companies are now looking for help from the industry, 

from investment and from government, and they’re not quite getting it yet. 

The CHAIRMAN. Let me ask both Dr. Sprenkle and Mr. Kathpal, 

are you concerned about the issue that Mr. Moores has raised with 

the ability to access, whether it’s lithium, graphite, cobalt or nickel? 

Dr. SPRENKLE. So, yeah, there are concerns about that. We’ve got 

active programs looking at developing the sodium replacement for 

lithium that we can get. It’s nowhere near the size of what they’re 

doing in Japan where every major manufacturer is developing an 

alternative to have a sodium-ion battery, in case they need to, they 

can plug into their system. 

Other materials we’re looking at, like with our vanadium flow 

battery. We’re not on the same level of criticality but can we take 
87 

that to a point where I can make an organic molecule that can be 

synthesized and perform the same function as that vanadium species, then I’m no longer dependent upon commodity metal at that 

point to be able to keep that cost structure. 

The CHAIRMAN. But how far out is that? 

Dr. SPRENKLE. And that’s, that is a big challenge to do that, to 

take that molecule and make it electrochemically active in there 

and soluble, and stability that we need. But the payoff at the end 

is that you have something you can control and something that you 

can design the properties that you want and control, you know, basically how much is made, so—— 

The CHAIRMAN. Mr. Moores? 

Mr. MOORES. Yeah, it’s interesting actually that you look at different battery technologies, vanadium flow is one of them. But the 

reason we could come back to lithium-ion is we just, we follow 

where the money is. 

Thirty-five billion dollars has been invested in these lithium-ion 

battery megafactories. Now it’s hard to understand, but it’s true 

that they’re invested without any kind of true understanding of the 

supply chains that feed them and the minerals that go into these 

batteries. It’s only after they put these grand plants in place they 

realize we better look at getting our lithium, or lithium prices have 

gone up four times or nickel is going up double. 

And so, really, I guess the point is that the decision, the direction 

of the industry, has already been made. The blueprint for the next 

generation of this, the next step of this energy revolution for electric vehicles and for, to a lesser extent, but certainly for utility 

storage, the decision has been made on lithium-ion. 

There’s two chemistries actually, there’s NCM and NCA, which 

is a nickel, cobalt, manganese and a nickel, cobalt, aluminum. 

But it’s the supply chains that are always the last to react because people that plan these things, whether it’s VW planning to 

put ten million electric vehicles on the road or whether it’s the battery companies planning to build 15 gigawatt hours worth by 2020, 

the mine upstream is the last link in the supply chain and the last 

thought. 

It’s only recently, because I’ve been getting these price shocks, 

they’ve been going to their customers and they’re getting charged 

three, four times for their lithium hydroxide. That’s when they realize there’s a problem and these supply chains have to be looked 

at long-term. 

The CHAIRMAN. Well, it is a part of our dilemma here where we 

are clearly building the interest and demand. We talked about 

breakthrough technology earlier and most of you said we don’t really need a breakthrough. We have the intelligence here and we have 

the technology. We just need to work to bring down the cost. 

Well, if the cost is going to be subject to the whims of China or 

other nations that hold the initial resource that we need, that is 

going to make it tough to get to that point where everyone would 

really like to be. 

We are in a situation where we have this foreign dependence. I 

think about the position that it puts us in because it wasn’t too 

many years that we were talking around this Committee room here 

about our vulnerability as a nation on OPEC, on nations like Iran, 
88 

Iraq, and Venezuela, and people that we did not particularly want 

to be doing business with and our technologies have allowed us to 

move beyond that. 

But I think about the issues that present themselves when we 

think about the minerals that go into so much of, well, just everything that we do. We do not think about them as part of that supply chain and how it influences the decisions, whether it is for the 

investors or whether it is for the market that we are trying to grow 

as we try to reduce the overall costs. 

So I appreciate the focus that you bring to the conversation, Mr. 

Moores, because I think it is an important part of what we are trying to do here. We want to be innovative. We want a breakthrough. 

We want to get to this point where we can incorporate and integrate all these additional technologies through the use of energy 

storage. 

So much of what Senator Franken wants to do with renewables, 

and I as well, is going to depend on our ability to get this stuff out 

of the ground and then be able to process it. So it is something that 

needs to be talked about, and we are doing the talking here. 

Senator Franken, do you want to have the last question? 

Senator FRANKEN. Sure, thanks. 

Thanks for being here today and talking about storage. Storage, 

I really think, is an enormous game changer, allowing renewables 

to be baseload and also to increase grid reliability and resilience. 

That is why Senator Heinrich and I recently introduced the Advancing Grid Storage Act to promote research development, demonstration and deployment of grid-scale energy storage systems. 

The legislation provides dedicated funding for storage systems 

within ARPA-E as well as creating grant and technical assistance 

programs to help overcome barriers to deployment. 

So I would like to hear from the panel about what barriers you 

see to the deployment of energy storage systems. 

Dr. SPRENKLE. So we tend to look at this as breaking down a 

long—it’s a cost and it’s the realized benefits of storage. Oftentimes 

when we look at the benefits, they’re not fully defined and it depends on where the storage is located. 

And so, we have 3,000 utilities in the U.S., each with a different 

asset mix, each with a different operational condition. That value 

of storage changes in there. And so, that’s a challenge to be able 

to get the planning models and analytical tools so we can go in and 

determine what that value is. 

But also we need to drive the costs down to where it is easy to 

buy these systems and put them out on the grid, at all levels, 

whether that’s at the home or community or at a substation and 

have that tiered resiliency. 

Senator FRANKEN. Anybody else? 

Mr. KATHPAL. Sure. 

We find that one of the key barriers to increasing competition 

and opening access to energy storage is getting it into the planning 

and procurement frameworks of the utility industry and, I think, 

Senator Heinrich probably knows this quite well because his state 

was one of the first to pass a rule at the state utility commission 

that asks the utilities in that state to look at energy storage as a 

resource option. 
89 

So it would be directly compared to building a new, natural gasfired, peaking plant before they decide on what their new sources 

of capacity would be. 

And so, that type of analysis when Dr. Sprenkle talks about 

planning models, that type of integrated resource planning happens in many states of the country. That’s how utilities decide 

what to build next. And we see a need for technical assistance, 

whether that’s to the state utility commissions, state energy offices, 

directly to the utilities, the regional planning or reliability organizations in getting storage on the menu so that it can be considered, 

but then also for its benefits to be analyzed comprehensively when 

those decisions are made. 

Senator FRANKEN. And that is something New Mexico did. 

Mr. Moores? 

Mr. MOORES. Yeah, just to answer the question, the original 

question, the barrier to energy storage. 

Senator FRANKEN. Yes. 

Mr. MOORES. I mean, it might sound like quite a simple answer, 

so I apologize if it is too simple. But it is low-cost availability of 

batteries, whether they’re vanadium flow batteries, lithium-ion batteries, slightly different on the hydro side. 

If they’re cheap and available then they’ll be used. If they’re expensive and they’re hard to get a hold of, then they won’t be used. 

With vanadium flow, for example, as a technology, fundamentally much better than lithium-ion for this application, but that 

uses vanadium pentoxide, very relatively rare compared to this vanadium metal that’s produced and dug out of the ground. 

If you talk about lithium-ion, if you don’t have your lithium, the 

graphite anode, the nickel chemical that goes in to make a lithiumion battery, you’re not going to have the batteries. You’re not going 

to have energy storage systems that AES have installed on Kauai, 

for example. And so, it’s cheap, low-cost batteries and then in order 

to get those, it is steady, stable materials, minerals and chemicals 

that make these batteries. And I think, fundamentally, that depends on everything. 

Mr. SEIFARTH. And for our industry it’s quite simple. It’s valuation and it’s policy to put us on a level playing field. 

Senator FRANKEN. By policy what do you mean exactly? 

Mr. SEIFARTH. So, for example, the process steps that we must 

go through to even modernize an existing hydropower plant are, I 

think the best word is cumbersome, time-consuming, laborious. It’s 

years, 8, 10, 12 years in many cases. And utilities just don’t have 

the stomach to invest in something that long with the flip of a coin 

if it will go forward or not. 

Senator FRANKEN. Okay, thank you all. 

One last question. 

Is there something we can do? If you wanted us to do something 

to help, what can Congress do? 

Dr. SPRENKLE. I think we used the example of the lithium-ion 

timeline before and that it, you know, we had the materials in the 

late ’70s and it took until ’91 to get that material into commercial 

production and now to get that cost down. 

So as we’re developing these technologies I can do a step change, 

in terms of the overall cost and make them common, like has been 
90 

said, it is that continued focus on developing these and getting 

them through this to the point where they can be a commercial reality. 

That’s, I guess, going back to one of those barriers is before the 

new technologies coming through, it’s just that long-term focus on 

it. 

Senator FRANKEN. Thank you, Madam Chair. 

The CHAIRMAN. Thank you, Senator Franken. 

Gentlemen, thank you all for being here today and for your contributions. I think this has been a good discussion and gives us, as 

a Committee, something to build on. Again, recognizing the immediate situation in Puerto Rico and knowing that we have opportunities to try to build out more resilient energy infrastructure. We 

have these opportunities because of what we see coming out of our 

national labs, the innovations coming out of industry and then we 

have our good, old, reliable hydro. We sure thank you for that. 

But I do think it is important that as a Committee we recognize 

that as innovative as we can possibly be in these areas, we still 

come back to the need for more base power. I look at critical minerals as being the true baseload here, because without it we cannot 

get much of anything else started. 

So just keep that in mind, and thank you for, again, your leadership in these various areas. I appreciate that. 

With that, the Committee stands adjourned. 

[Whereupon, at 12:08 p.m. the hearing was adjourned.] 
(91) 

APPENDIX MATERIAL SUBMITTED 
92 

U.S. Senate Committee on Energy and Natural Resources 

October 3, 2017 Hearing 

To Examine the Status of Energy ,\'forage Technologies, Reviewing Today 's 

Technologies and Understanding Innovation in Tomorrow's Technologies 

Questions for the Record Submitted to Dr. Vincent Sprenkle 

Questions from Chairman Lisa Murkowski 

Ouestion 1: There are many current applications for energy storage technologies in microgrids, 

which can increase both reliability and resilience. Alaska has been a pioneer in hybrid energy 

microgrids. Can you please discuss how you see energy storage technologies both today's 

technology as well as future technology- enabling the deployment of microgrids to provide 

continuous power to high value assets? 

Answer: Hybrid energy microgrids containing both renewable and fossil-based generation 

resources have been shown to significantly reduce fuel consumption. Alaska, with almost 200 

isolated microgrids reliant on imported diesel fuel, has been at the leading edge of this 

development for the country. The adoption of energy storage technologies into these microgrids 

can further reduce costly fuel imports by minimizing the time fossil assets are needed to buffer 

low periods of renewable generation and maintain a consistent output of power. Today, 

dispatchable energy storage technologies, like batteries, may be able to economically shift a few 

hours of renewable generation. New technologies that significantly lower the cost of longer 

duration energy storage can further reduce the dependency on imported fuel while 

simultaneously improving the resiliency of the system for extended outages. 

Ouestion 2: There is a lot of excitement in the energy storage world about lithium-ion batteries, 

especially in electric vehicles. There are also other storage technologies that are currently 

deployed, including pumped hydro, and thermal storage. 

a. Dr. Sprenkle, what are the physical limitations oftoday's energy technologies, in 

terms of the ability to load shift and cycle frequently? 

Answer: Each storage technology has unique physical characteristics that allow them better 

performance under certain applications, like load shifting. Technologies such as thermal storage 

are effective at shifting large electrical loads away from periods of peak demand, however, they 

are limited in their ability to impart electricity back into the grid when needed. Pumped hydro, 

compressed air, flywheels, and electrochemical systems like batteries all can deliver electricity 

back into the power grid thereby enabling utilization for a number of different applications. 

Pumped hydro and Compressed Air Energy Storage (CAES) have been proven effective in 

providing long duration energy storage for several decades, but are limited in deployment 

options due to the required geology. Today, most new energy storage deployments on the grid 

are in the form of battery energy storage and have shown to be economically viable for certain 

high-value applications such as frequency regulation and demand charge reduction. The 
93 

U.S. Senate Committee on Energy and Natural Resources 

October 3, 2017 Hearing 

To Examine the Status of Energy Storage Technologies, Reviewing Today's 

Technologies and Understanding Innovation in Tomorrow's Technologies 

Questions for the Record Submitted to Dr. Vincent Sprenkle 

flexibility and modularity of battery energy storage can enable systems to be sited at both 

kilowatt scale residential and community systems and multi-megawatt systems at substations and 

baseload generators providing a "hierarchy of resiliency" across the entire electricity 

infrastructure. To achieve widespread deployment of energy storage across the electrical 

infrastructure, significant advances in understanding and controlling the physical phenomena that 

dictate the lifetime and costs of these systems will be required. 

b. In addition to flow batteries, are there other energy storage technologies that you 

believe have high potential, like fuel cells, solid state batteries, or small compressed 

air storage? 

Answer: Given the diversity of electric utilities, generation technologies, and pricing across the 

U.S., certain storage technologies may be better suited than others for certain applications. 

Today, more lithium ion batteries are being deployed in the grid as their costs fall due to 

expansion of mobile consumer and transportation sectors. This battery technology is being 

primarily designed for relatively short-lived applications and may not have multi-decade 

lifetimes, inherent safety, and costs that newer technologies, designed from the ground-up for 

grid applications, ultimately have. New battery technologies utilizing water based electrolytes 

and earth abundant elements offer unparalleled safety and dramatic cost reductions over today's 

technologies. And while flow batteries do fit within this paradigm, there are numerous other 

configurations and options that could be utilized. Solid state batteries, in which the organic 

electrolyte is replaced with a non-flammable solid material, could also improve safety and may 

be suited for deployment in dense population centers where space is at a premium. Small, 

modular compressed air or pumped hydro storage may offer smaller scale storage options with 

utility scale lifetimes. To ultimately enable greater deployment of energy storage, we will need a 

suite of energy storage technologies to choose from to best meet the unique physical and 

economic challenges found in each region of the country. 

Question 3: FERC recognized the importance of the advent of mass deployment of energy 

storage technologies with a new Notice of Proposed Rulemaking last year, followed by a policy 

statement this year. This is something that ENR will continue to track in our oversight role. We 

have heard testimony about the various grid services that can be provided by different types of 

energy storage technologies. The industry is grappling with how to properly evaluate and 

commoditize those benefits moving forward. I believe that our role should be to remove barriers 

to market for energy storage technologies. As the markets evolve, are there any specific 

challenges in terms of rules or regulations that deserve our attention7 

Answer: While science and technology efforts are critical to the continued deployment of safe, 

reliable and low-cost energy storage, we must also have the capacity to fully understand the 

value proposition for grid storage under the institutional and regulatory environments currently 

2 
94 

U.S. Senate Committee on Energy and Natural Resources 

October 3, 2017 Hearing 

To Examine the Status of Energy Storage Technologies, Reviewing Today's 

Technologies and Understanding Innovation in Tomorrow's Technologies 

Questions for the Record Submitted to Dr. Vincent Sprenkle 

in place. Developing a comprehensive analytical f!-amework for the valuation of energy storage, 

and other new grid technologies, can enable government and industry stakeholders to work 

together to assess the benefits and costs of storage while quantifying the financial and technical 

impart of current policies. With a uniform analytical framework in place, industry stakeholders 

can utilize the same tools and data sets to evaluate energy storage and more accurately inform 

policy decisions that could lead to greater deployment. 

Question 4: Some see energy storage, and the integration of electric vehicles, as a potential 

challenge to the current utility business model. How could utilities leverage energy storage 

technologies within their existing operations? 

Answer: Greater adoption of all distributed energy resources (DER), including grid energy 

storage and electric vehicles, will change the current utility business models. Utilities, in 

partnership with state and federal agencies like the DOE's Grid Modernization Laboratory 

Consortium, are developing the analytical tools that can better inform utilities how they can 

leverage DERs to make their systems more efficient and cost-effective for consumers. These 

robust analytical tools will ultimately help inform utilities on how to aggregate, control, and 

value DER assets like storage, to defer capital investments in expensive and limited-use peaking 

plants. 

Questions from Senator Ron Wyden 

Question 1: Dr Sprenkle, I am glad to hear the 2013 grid storage report has helped point you in 

the right direction. I asked for the DOE to prepare that report as chairman ofENR. 

On tbe topic of cost competitiveness, could you offer an opinion on how a significant drop 

in the cost of storage might lead to more rapid deployment of storage on the grid? 

Answer: Today energy storage accounts for a little more than two percent of the 1,070 gigawatts 

of peak generation capacity of the nation, with 98 percent of that energy storage accomplished by 

regionally isolated pumped hydro storage. To increase the amount of dispatchable stored energy 

capacity, the costs of storage systems must further decrease to make them viable for a majority 

of the utility class services. Falling cost of lithium-ion technology over the past 6-plus years have 

enabled initial market penetration for some of the higher value grid services like frequency 

regulation, however, an additional four to five-fold decrease in costs will be required to enable 

ubiquitous deployment of the technology.While we focus most research and development on 

reducing the installed capital costs (dollars per kilowatt hour) of storage, we must also emphasize 

the impact of device lifetime, round-trip efficiency and other parameters on our ability to 

quantify the cost of electricity that passes through the storage device in its operational life. 

While individual targets vary, energy storage systems capable of being installed at $100 per 

3 
95 

U.S. Senate Committee on Energy and Natural Resources 

October 3, 2017 Hearing 

To Examine the Status of Energy Storage Technologies, Reviewing Today's 

Technologies and Understanding Innovation in Tomorrow's Technologies 

Questions for the Record Submitted to Dr. Vincent Sprenkle 

kilowatt hour with an estimated lifetime of -8,000 cycles at 75 percent round-trip efficiency 

should enable storage to achieve parity with other grid resources. 

What would be required to achieve this drop in cost? 

Answer: To achieve the desired cost, lifetime, and efficiency needed to ensure wide-spread 

deployment of storage technologies will require significant advances in R&D and lower cost 

manufacturing processes. Prices for lithium ion related technologies are expected to continue to 

fall but the target application markets for these technologies only require 1,000-1,200 cycles, 

making the cost of ownership for a majority of grid application unattainable. New breakthrough 

technologies, based on earth-abundant and intrinsically safe materials, need to be developed and 

validated to operate over the 8,000 cycles desired. Advanced manufacturing architectures must 

be developed that enable new technologies to compete economically with existing storage 

technologies while supporting the reliability of the new technologies. These efforts can 

ultimately lead to the development of new technologies that can meet the both the cost and 

technical requirements for a majority of the grid storage applications. 

Question 2: In your spoken testimony, you highlighted how long it took for lithium-ion 

batteries to become cost competitive. I recently introduced a bill, S. J 876, that would authorize 

the Department of Energy funding to reduce the cost of energy storage through research, 

development, and demonstration. 

Do you think new R&D investment will accelerate the deployment of energy storage? 

Answer: R&D investments across the spectrum of energy storage technologies are needed to 

accelerate the deployment of energy storage. Accelerating the deployment of energy storage 

requires a focused effort on improving the benefit-cost relationship for storage such that it is 

competitive for a majority of grid applications and R&D can play a critical role in both reducing 

the cost of energy storage and assessing the net benefits it provides to the grid. New materials 

and manufacturing platforms can reduce the cost of the storage device and associated power 

electronics while uniform safety requirements and controls reduce the cost installation and 

operation. New analytical tools must be developed with sufficient fidelity to accurately capture 

both the locational and system benefits of energy storage and enable industry stakeholders to 

utilize common methodologies to assess the value of energy storage. Analysis of field deployed 

energy storage systems are critical to ensuring the fidelity of these tools and to developing end 

user confidence in the technology. 

What else can be done at the federal level to accomplish this goal? 

Answer: As mentioned in my testimony, the 2013 Grid Storage Report provides an excellent 

roadmap on the challenges facing grid scale energy storage. Continued and accelerated efforts on 

the development of cost-competitive technologies, improved safety and reliability, standardized 

4 
96 

U.S. Senate Committee on Energy and Natural Resources 

October 3, 2017 Hearing 

To Examine the ,\'talus of Energy Storage Technologies, Reviewing Today's 

Technologies and Understanding Innovation in Tomorrow's Technologies 

Questions for the Record Submitted to Dr. Vincent Sprenkle 

valuation methodologies, and industrial acceptance can, and will, lead to greater adoption of 

energy storage. New design tools and characterization techniques can better inform the materials 

discovery process and accelerate the innovation process. Common manufacturing platforms 

applicable to entire classes of storage technologies can speed the development time between 

innovation and validated system-level performance. New planning and design tools for utilities 

and regulators that can accurately determine the optimal size, location, and net benefits of 

storage deployments can greatly reduce institutional uncertainty on the value of energy storage. 

Question 3: In your testimony, you said that storage must be cheap, long lasting, and safe. 

What R&D opportunities do you see for energy storage systems that could have superior 

cost, performance, and safety compared to today's lithium-ion batteries? 

Answer: As mentioned previously, the falling cost of lithium-ion technology over the past 6 plus 

years has enabled initial market penetration for some higher value grid services like frequency 

regulation. And while costs of lithium ion technologies may continue to decrease, there are 

significant limitations in lifetime and safety that may make the cost of ownership for a majority 

of grid application unattainable. Certain types of redox flow and sodium-based batteries have 

shown the decadallifetimes desired for grid applications but are not suited the mobile and 

electric vehicles markets that are supporting mass production of today' s lithium-ion batteries. 

Other battery technologies have shown tremendous potential for ultimate costs lower than 

lithium-ion but have had difficulty reaching the necessary level of maturity to realize these costs. 

Integrated R&D efforts aimed at both reducing the costs of the constituent components and 

providing an accelerated pathway to commercial scale production and validation offers the 

greatest opportunity for the cost, lifetime, and safety benefits of these next generation 

technologies to be realized. 

Question 4: Dr. Sprenkle, as the penetration of renewable resources increases, batteries of many 

types will become more valuable. My bill, S.l876, has a call out for a focus on relatively 

underdeveloped and potentially transformative storage technologies. 

What types of energy storage technologies would you suggest should be part of that focus? 

Answer: There are a significant number of energy storage technologies, both battery and nonbattery based, that are currently underdeveloped but with the potential to transform the stored 

energy capacity of the grid. While it would be difficult to address every R&D barrier for every 

potential energy storage technology, there are certain technologies that share some commonality 

of challenges and can benefit from a focused R&D effort. As an example, new battery 

technologies which utilize water based electrolytes and earth abundant elements offer 

unparalleled safety and the potential for significant cost reductions over today' s technologies. 

The flow battery technologies being developed at PNNL are just one example that falls within 

this category. The water based electrolyte mediates the flammability concerns associated with 

5 
97 

U.S. Senate Committee on Energy and Natural Resources 

October 3, 2017 Hearing 

To Examine the Status of Energy Storage Technologies, Reviewing Today's 

Technologies and Understanding Innovation in Tomorrow's Technologies 

Questions for the Record Submitted to Dr. Vincent Sprenkle 

the organic electrolyte used in lithium-ion batteries and utilizing earth abundant elements such as 

sodium, iron, zinc, and water soluble organic materials for the electrochemical reaction ensures a 

continuous availability of low cost materials. These technologies would all share common 

materials and performance characteristics that could enable them common system components 

thereby reducing the costs for all. Other energy storage systems could be grouped similarly based 

on common characteristics and an overarching roadmap developed that would facilitate greater 

adoption of these transformational technologies. 

Questions from Senator Mazie K. Hirono 

Question 1: Hawaii's net metering program for rooftop solar ended in 2015, leaving new 

rooftop solar customers with a program that effectively encourages them to store the excess 

power from their solar panels, if they can afford to do so, since customers are not paid for any 

excess energy returned to the grid. Affording such storage systems remains a challenge for many 

people. In your view, which current or emerging storage technologies have the greatest potential 

for use by residential customers with their own renewable power, and do you have projections 

for the costs of such technologiesry 

Answer: While the costs of energy storage technologies have dramatic decreased over the past 6 

plus years, it is still difficult to develop a reasonable return on investment for residential solar 

and other renewable energy storage in the absence of incentives or significant demand charges. 

It is unlikely that we will see continued significant price decreases in lithium-ion technology as 

the manufacturing process is quite mature at this point. During the same time frame, vanadium 

redox flow batteries have kept pace with lithium ion cost reductions while having less than 

111 OOO'h of the manufacturing capacity. As such, future advances in flow, zinc, and iron based 

battery technologies may ultimately enable residential solar and other renewable energy storage 

to deliver a shorter-term return-on-investment independent of incentives or elevated demand 

charges. 

Question 2: Are there current trends or future projections that lead you to think residential 

storage technologies will more broadly be in the form of an electric vehicle connected to the 

home or a stationary home storage systemry 

Answer: Electrical vehicles play an important role in the suite of distributed energy resources 

(DER) and must be considered both as a load and potential supply to the system. For areas like 

Hawaii, with a high penetration of rooftop solar, stationary energy storage may offer significant 

advantages over an electric vehicle connected to the home. First, the daily transportation 

requirements make it difficult to synchronize peak generation of solar with availability of the 

car's battery system. A second issue involves the use of the vehicles to provide services back to 

the home or grid as we do not currently know how much impact these services would have on 

6 
98 

U.S. Senate Committee on Energy and Natural Resources 

October 3, 2017 Hearing 

To Examine the Status of Energy Storage Technologies, Reviewing Today's 

Technologies and Understanding Innovation in Tomorrow's Technologies 

Questions for the Record Submitted to Dr. Vincent Sprenkle 

the lifetime and hence, the warranty, of the battery. Stationary energy storage systems would not 

have the same issues and could see broader application as costs fall. 

Question 3: 1n June, the Natural Energy Laboratory of Hawaii, Hawaiian Electric Light 

Company, and others announced their plans to install an advanced flow battery using the element 

vanadium, to test its ability to provide long-duration energy storage in a warm weather 

environment. DOE's Office of Electricity and the Sandia National Laboratory offered expertise, 

coordination, and financial support in helping this project happen. Could you please elaborate on 

what research and demonstration work remains to be done to determine how to best use storage 

with high levels of solar and other variable renewable power on the grid? 

Answer: Energy storage demonstrations efforts, like the deployment you mention, are being 

supported across the country by the DOE's Office of Electricity Delivery and Energy Reliability 

to better understand the regional variations in benefits provided by energy storage. Hawaii, with 

high levels of solar, warm climate, and unique system constraints, offers a significantly different 

use case that can better inform the valuation models being developed for energy storage. 

Ultimately, the data gained from these deployments can be used to create an analytical planning 

framework in which the value of energy storage can be accurately determined based on the local 

system characteristics. Additionally, deployments involving new storage technologies, like the 

vanadium flow battery, provide technical validation of the life-cycle cost, performance, and 

safety of the system while enabling the lessons learned from these demonstrations to be shared 

across the entire stakeholder community. 

Questions from Senator Catherine Cortez Masto 

Question 1: I'm curious about where you believe private sector research and development 

dollars in the energy storage sector are going to be allocated-as there are a variety of 

technologies in this sector-including batteries, fly wheels, thermal storage, compressed air 

storage, and super capacitors. 

Answer: There are a few in the private sector making investments in longer-term storage 

options, however, with an the extended timelines required for market entry of these technologies 

most private sector research on grid scale energy storage has focused on systems integration and 

controls to meet the current market opportunities utilizing commercially available lithium-ion 

technologies. This battery technology has been primarily designed for relatively short-life mobile 

and transportation applications and may not have multi-decade lifetimes, inherent safety, and 

costs that newer technologies, designed from the ground-up for grid applications, ultimately 

have. New battery technologies utilizing water based electrolytes and earth abundant elements 

offer unparalleled safety and the potential for dramatic cost reductions over today's technologies. 

To ultimately enable greater deployment of energy storage, we will need a suite of energy 

storage technologies to choose from to best meet the unique physical and economic challenges 

found in each region of the country. 

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99 

U.S. Senate Committee on Energy and Natural Resources 

October 3, 2017 Hearing 

To Examine the Status of Energy Storage Technologies, Reviewing Today 's 

Technologies and Understanding Innovation in Tomorrow's Technologies 

Questions for the Record Submitted to Dr. Vincent Sprenkle 

Question 2: What services could energy storage conceivably offer to the grid over the next 

decade? And are those research and development sector dollars properly aligned? If not, what 

could Congress do to help? 

Answer: The 2013 edition of the DOE/Electric Power Research Institute Electricity Storage 

Handbook, developed in coordination with the National Rural Electric Cooperative Association, 

describes eighteen different services where energy storage can be used to support the generation, 

transmission, distribution, and behind-the-meter needs of the grid. The 2013 DOE Grid Storage 

Report further identified four critical challenges that must be overcome to enable storage to be 

viable in these applications, namely the development of cost-competitive technologies, improved 

safety and reliability, standardized valuation methodologies, and industrial acceptance of the 

technology. Since then, DOE research and development efforts have focused on addressing these 

barriers while simultaneously engaging industry stakeholders in advancing the deployment of 

energy storage. For your convenience I have enclosed the Electricity Storage Handbook and the 

Grid Storage Report with these questions for the record. 

8 
100 

U.S. Senate Committee on Energy and Natural Resources 

October 3, 2017 Hearing 

To Examine the Status of Energy Storage Technologies, Reviewing Today 's 

Technologies and Understanding Innovation in Tomorrow's Technologies 

Questions for the Record Submitted to Mr. Praveen Kathpal 

Questions from Chairman Lisa Murkowski 

Question 1: There are many current applications for energy storage technologies in microgrids, 

which can increase both reliability and resilience. Alaska has been a pioneer in hybrid energy 

microgrids. Can you please discuss how you see energy storage technologies- both today' s 

technology as well as future technology enabling the deployment of microgrids to provide 

continuous power to high value assets? 

Answer 1: Unlike most other grid infrastructure, battery-based energy storage provides grid 

operators, including microgrids, with the unique ability to store excess electricity and deliver it 

when and where it is needed. This enables microgrids to island from the larger grid if needed, 

store and deliver as much of their generated energy as possible to service critical industries such 

as hospitals or can be connected directly to the grid to provide reliability and flexibility if 

generation assets elsewhere go offline. Storage-enabled microgrids can also provide "black start" 

services- providing the external power needed to restart electric power stations or portions of 

the grid after a partial or complete shutdown. 

Question 2: FERC recognized the importance of the advent of mass deployment of energy 

storage technologies with a new Notice of Proposed Rulemaking last year, followed by a policy 

statement this year. This is something that ENR will continue to track in our oversight role. We 

have heard testimony about the various grid services that can be provided by different types of 

energy storage technologies. The industry is grappling with how to properly evaluate and 

commoditize those benefits moving forward. l believe that our role should be to remove barriers 

to market for energy storage technologies. As the markets evolve, are there any specific 

challenges in terms of rules or regulations that deserve our attention? 

Answer 2: As l mentioned in my written testimony to the committee, at the federal level, we are 

pleased to see the proposed rulemaking from the Federal Energy Regulatory Commission that 

would provide fair and equal access for storage resources to wholesale power market products 

and services. We are also pleased to see FERC provide the direction that storage resources 

providing a transmission function can seek cost recovery through cost-based and market-based 

rate structures. We believe these are important policy initiatives at FERC that can create lasting 

wholesale market changes that fully value the unique capabilities that storage brings and to 

encourage consideration of storage use for infrastructure needs. 

Question 3: Some see energy storage, and the integration of electric vehicles, as a potential 

challenge to the current utility business model. How could utilities leverage energy storage 

technologies within their existing operations? 

Answer 3: Utilities across the United States are already leveraging energy storage within their 

existing operations. In the decade that we have been developing energy storage solutions for 

utilities in six countries, we have deployed systems ranging from 15 minutes to 4 hours in 
101 

U.S. Senate Committee on Energy and Natural Resources 

October 3, 2017 Hearing 

To Examine the Status of Energy Storage Technologies, Reviewing Today's 

Technologies and Understanding Innovation in Tomorrow's Technologies 

Questions for the Record Submitted to Mr. Praveen Kathpal 

duration. In shorter durations, energy storage can regulate mismatches between energy supply 

and demand on the grid on a second-by-second basis, giving operators enough time to rebalance 

the system. In longer durations, energy storage can provide capacity that enables utilities to 

better integrate renewable generation, maintain system reliability and reduce the need for more 

fossil fuel peaking power plants. Storage can also in certain cases help utilities defer investments 

in a variety of fundamental, single-function grid assets like wires, poles, transformers and 

substations, and in the process help utilities get the most value from the transmission and 

distribution lines they already own and use. 

Questions from Senator Ron Wyden 

Question 1: Mr. Kathpal, I am also concerned about the delay of the FERC Notice of Proposed 

Rulemaking on storage as you noted in your written testimony. 

In the case where FERC does not move swiftly on this issue, I wonder if you have any 

suggestions about what could be done to ensure energy storage technologies are valued 

properly and get a fair shake? 

Answer 1: Integration of energy storage resources provides various benefits to the grid. 

However, while some of the benefits can be monetized through wholesale products and services, 

there are several categories of benefits that our existing wholesale power markets do not 

compensate fully. As an example, existing thermal generation plants run more efficiently with 

energy storage, which leads to reduced emissions. Energy storage also enables traditional 

generation facilities to start up and stop less frequently, reducing maintenance and fuel costs, as 

well as reduces curtailment of renewable generation. None of these benefits are currently 

compensated by our power markets. The best way to address this would be to reform wholesale 

market products to reflect these benefits; however, we recognize this would be a long and 

arduous process, one that takes several years. In the interim, policies such as an investment tax 

credit for standalone energy storage could serve as a proxy for these currently uncompensated 

categories of benefits that storage delivers for our electric grid. 

Question 2: Mr. Kathpal, as the penetration of renewable resources increases, batteries of many 

types will become more valuable. My bill, S.1876, has a call out for a focus on relatively 

underdeveloped and potentially transformative storage technologies. 

What types of energy storage technologies would you suggest should be part of that focus? 

Answer 2: We believe that lithium-ion battery chemistries are fairly mature and private capital 

from large battery manufacturing companies can move them forward with respect to achieving 

scale and further reduction in costs. Government should continue funding R&D on other earlystage battery chemistries that have the potential to achieve greater capabilities. 

2 
102 

U.S. Senate Committee on Energy and Natural Resources 

October 3, 2017 Hearing 

To Examine the Status of Energy Storage Technologies, Reviewing Today 's 

Technologies and Understanding Innovation in Tomorrow's Technologies 

Questions for the Record Submitted to Mr. Praveen Kathpal 

The national labs, through the Department of Energy, are doing a great job in advancing the 

modeling and visualization of benefits that energy storage brings to the grid. These are complex 

analytic simulations that require the use of state-of-the-art power market models and a high 

degree of computational rigor. We also believe that the government should encourage and 

increase funding for the DOE and labs to continue this work. This is a critical piece of 

commercialization because it provides a strong analytic base to looking at costs and benefits of 

deploying energy storage for specific applications. 

Question 3: In your testimony, you highlighted an AES project with Arizona Public Service to 

install a battery in a small town outside of Phoenix in lieu of transmission upgrades. You said 

your project reduced the costs to consumers by half. 

What other parts of the country do you see as having potential for similar projects? 

Answer 3: Much of the nation's electric grid is in need of modernization, whether to keep up 

with load growth in specific areas, or to provide service more efficiently. Utilities could deploy 

energy storage projects like the one we are building for Arizona Public Service across their 

service territories to defer or in lieu of new transmission or distribution infrastructure 

investments, which typically provide far more capacity than is needed for projected load growth. 

As mentioned in my written testimony, in a number of cases, energy storage enables utilities to 

defer or avoid entirely investments in a variety of fundamental, single-function grid assets like 

wires, poles, transformers and substations, and in the process, get the most value from the 

transmission and distribution lines they already own and use. Adding reliability to its distribution 

network is what originally led Arizona Public Service to work with AES on its first two projects, 

adding reliability on its distribution feeder in neighborhoods with high adoption of intermittent 

solar. 

Question from Senator Mazie K. Hirono 

Question: Hawaii has set the goal of getting I 00% of its electricity from renewable sources by 

2045, and energy storage will play a key role in achieving that goal. As you mentioned during 

your oral testimony, AES partnered with the Kauai Island Utility Cooperative to develop a 20 

megawatt PV solar system with a 20 megawatt energy storage system. Can you please explain 

the cost savings or other benefits that you expect the project to bring to Kauai? 

Answer: On island grids like Hawaii's, the cost savings from systems like AES' 28 MW solar 

and 20 MW 5-hour storage system are derived from reduced fuel use for the island's current 

baseload oil-fired generation, which help reduce electricity rates for its customers. For power 

delivered from the system, KIUC will pay AES less than its recent fuel costs 

for its existing oil-fired generators attached chart). 

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3 
103 

U.S. Senate Committee on Energy and Natural Resources 

October 3, 2017 Hearing 

To Examine the Status of Energy Storage Technologies, Reviewing Today's 

Technologies and Understanding Innovation in Tomorrow's Technologies 

Questions for the Record Submitted to Mr. Praveen Kathpal 

Questions from Senator Catherine Cortez Masto 

Ouestion 1: What are the largest reasons the private sector is choosing to make investments in 

energy storage? 

Answer 1: As mentioned in my written testimony, energy storage solves three problems at once 

for both utilities and independent power producers. Energy storage lowers costs to utilities and 

their customers by avoiding the need to build new gas-fired peaking power plants, and by 

avoiding or deferring transmission and distribution infrastructure needs. It can be built in rightsized increments rather than the typical lumpy investment profile where large generation or grid 

assets are built often overbuilt in anticipation of future demand growth that, with increases in 

efficiency in generation, delivery and demand, is increasingly uncertain. Energy storage also 

enables utilities and power generators to operate existing generating assets and transmission and 

distribution lines more efficiently. Energy storage is also fuel-agnostic, meaning utilities can 

charge their facilities with the lowest-cost energy sources. Lastly, storage has additional 

advantages that make it faster and easier to permit, site and enter commercial operational, 

including no associated water use, no direct emissions that impact local air quality, no need for 

fuel infrastructure like natural gas lines, and does not need to be co-located with generation 

assets. 

Ouestion 2: In terms of deployment, have utilities been most interested in deploying energy 

storage to help meet peak energy needs? What are other factors have been driving investment? 

Answer 2: Utilities have been increasingly interested in deploying energy storage to help meet 

peak energy needs, notably in California but with other states now considering storage as a 

replacement for traditional generating assets like natural gas peaking plants. The rapid growth of 

renewable generation has driven utilities to consider storage to provide for local capacity 

reliability needs. 

Utilities are also increasingly looking at application of storage on the transmission and 

distribution system for increasing reliability and efficiency of the system. Lastly, as noted in my 

written testimony, storage can add resilience and protect electric grids during extreme weather 

events, helping communities to get power back online faster following crises. Many communities 

that weathered storms like those experienced in September of 2017 are now looking to invest in 

storage to support their grids as a hedge against future weather events. 

As mentioned in my written testimony, the Dominican Republic's grid operators ordered our 

colleagues at AES Dominicana to keep online and operational during both Hurricanes Irma and 

Maria its two 10 MW, 30-minute duration Advancion energy storage arrays at its Andres and 

Los Mina Dominican Power Partner facilities. The two arrays, completed in February and May 

of 2017, were operated from one of Dominicana' s thennal plant control rooms and remotely 

monitored by the AES Energy Storage team to ensure proper operation and to provide the local 

4 
104 

U.S. Senate Committee on Energy and Natural Resources 

October 3, 2017 Hearing 

To Examine the Status of Energy Storage Technologies, Reviewing Today's 

Technologies and Understanding Innovation in Tomorrow's Technologies 

Questions for the Record Submitted to Mr. Praveen Kathpal 

operators with remote assistance if required. As each storm struck, power lines were damaged, 

distribution lines were disconnected in high-risk areas, and almost 40 and 55 percent of the 

generation assets on the island were forced offline, respectively, putting additional stress on the 

system. To maintain grid frequency during hours of volatile fluctuations during each storm, both 

energy storage arrays performed more than double the amount of work as normal, which helped 

keep the Dominican grid operating as the storm passed. The additional power output delivered 

by the energy storage arrays was equivalent to instantaneously adding a thermal power plant of 

approximately 30 MW to the grid. 

5 
105 

U.S. Senate Committee on Energy and Natnral Resources 

October 3, 2017 Hearing To Examine the Status of Energy Storage Technologies, Reviewing 

Today's Technologies and Understanding Innovation in Tomorrow's Technologies 

Questions for the Record Submitted to Mr. Simon Moores 

Questions from Chairman Usa Murkowski 

BENCHMARK 

MINEJ;;;\L 

Monday 30 November 2017 

Question 1: It is widely known in the mineral world that China has a monopoly on 

critical minerals. The United States imported 100 percent of 20 different minerals in 

2015, nine of which China was the primary source, and at least 50 percent of another 

30 minerals. But, I am also concerned that China is attempting to control other parts 

of the supply chain, like the factories which produce batteries. 

a. What threats does this foreign dependence, especially on China, pose to the United 

States? 

those that control the lithium ion battery supply chain will control 

auto and energy storage industries. 

long term 

Foreign dependence on mined mineral concentrates and, particularly, the battery grade 

chemicals will undermine US competitiveness electric vehicle and utility energy 

This poses quite a few threats along the supply chain. The main links are as follows: 

Raw Materials Semi processed Batteries Battery Mobile/ 

products Packs EV /Utility 

Lithium Anode Cells 4-7Wh Smartphone 

Graphite Cathode Various 7-10 kWh Home 

Cobalt Separators form factors 40-85 kWh EVs 

(18650) >500 kWh 

China does not control the lithium and cobalt industries from a raw materials perspective. 
106 

U.S. Senate Committee on Energy and Natural Resources 

October 3, 20 17 Heming To Examine tbe Status of Energy Storage Technologic.~, Reviewing 

Today's Technologies and Understanding Innovation in Tomorrow's Technologies 

Questions for the Record Submitted to Mr. Simon Moores 

China imports over 90% of its lithium. the vast majority is spodumene material from 

Australia that is chemically within its borders into grade material. 

However, China's domestic resources- botll brine and rock- are nowhere near 

the grade to commercialise to a significant scale. 

The US also the vast majority of its lithium from Chile and Argentina and has a small 

brine operation Silver Peak, Nevada. However, the US has a great opportunity to build up 

its own lithium mining operations in Nevada (brine, clay) and North Carolina (hard rock). The 

US, like China, does have grade processing knowhow and technology the 

likes of Albemarle, FMC, technology developers in Nevada and new in 

Alberta. 

China's strangle hold is on the batte1y grade processing of spodumene rock. It has become 

the leader in this and is now this technology outside of its borders to Australia. One 

such $1 bn project is being built by Tianqi in Kwinana, Western Australia. 

These Chinese chemical converters Sichuan Tianqi and Ganfeng Lithium being the largest 

- have also been investing resource assets outside of China (Australia, Argentina, 

Canada, Europe) over the last? years. In the last two years this investment push has 

intensified especially in Canadian company Lithium Americas and most recently, other 

Australian hard rock assets. 

Lithium is an area where the playing field with investment into new mines and extraction 

technology could be levelled but at present is the favour of China. 

It is a similar situation with cobalt where China 

which is from the Democratic Republic of 

capacity and knowhow in the battery grade 

limited exposure and control. 

100% of its supply, the of 

China controls the bulk 

stage- an area where the US has very 

Supply of cobalt from supply security and ethical sourcing I corporate social responsibility 

perspectives is a significant risk. 

Graphite- as the largest raw material into a lithium ion battery- is also a significant 

risk to the US from an Flake graphite is the precursor to make lithium ion 

anode materials and the has zero flake and zero natural 

processing capacity. The US can make quantities graphite anode, 

however, the hyper growth in the lithium ion battery market means the US will need to 

source from China to secure the required volumes. 

Much like lithium, without steady and high quality supply graphite anode, lithium ion 

batteries not be produced and battery supply the auto and energy storage industries 

will be stifled. 

Some foreign dependence threats to consider: 

> Trade taxes or embargoes battery raw material supply from China in favour of value 

added production of cathodes, anodes or finished lithium ion batteries 

> US consumers of lithium, graphite, and nickel are a! the mercy of other political 

regimes such as the stifled supply of lithium from Chile over the last 3 years 

> Corporate social responsibility issues with cobalt and graphite is a significant risk to large 

US public companies like Apple and Tesla; if these input raw materials into a lithium ion 

2 
107 

U.S. Senate Committee on Energy and Natural Resources 

October 3, 2017 Hearing To Examine the Status of Energy Storage Technologies, Reviewing 

Today's Technologies and Understanding Innovation in Tomorrow's Technologies 

Questions for the Record Submitted to Mr. Simon Moores 

battery are found to be from illegal, unethical sources (polluting, human rights violations), or 

banned (North then the and investment into these large 

Silicon players could be 

> Favouring of Chinese lithium chemical convertors for new supply: The US does have 

battery grade processing facilities in North Carolina via Albemarle and FMC but not yet the 

capacity to fuel an energy storage revolution; China is presently doubling its capacity of 

battery grade lithium carbonate and hydroxide production and investing cash into the 

supply chain. Tl1is means as large auto manufacturers secure their supply chains, 

chemical producers will be first in line. 

> Securing flake graphite precursor US has no active flake mines- the 

precursor to anode material - and is on primary sources, and Brazil. While 

these have provided stable sources of flake graphite for the US, China is cutting back its 

mining activities and this could starve the US of flake raw material long term, particularly 

relation to the ballery industry. Brazil poses less of a risk but is historically slow on 

expanding production. 

b. What advantages will China have if they control not only the supply of minerals, but 

the processing of minerals? 

When you focus on the upstream portion of the lithium ion supply chain, these is no doubt 

that those that control the battery grade processing step- both in the knowhow and the 

capacity will hold the sway of industrial power. 

Those that control the resources will have a major say but this is secondary to the 

processing knowhow which allows these materials to be applied into the lithium ion battery 

industry. It is to note that we are dealing with a chemicals rather 

than a and therefore each customer receives product and works 

their suppliers for long term benefit. 

China presently has 60,000 !annes of lithium chemical conversion capacity rising to 200,000 

tonnes in the nexl4 years. Sichuan Tianqi is investing in offshore capacity in Australia 

in a A$800m, 48,000 tonne facility in Kwinana, Western Australia. 

c. China has lower environmental standards for mining than the United States and has 

lower labor costs. Assuming the United States can't compete in these categories, in 

what categories can we be competitive -for example energy costs and processing 

technology superiority? 

Technology is !he strongest assets for the US. New techniques to extract and process 

lithium more efficiently can change the economics of the whole supply chain from mine to 

market 

Pr:tmn,lnn'v in creating new Cathode formulations will also directly impact the volume and 

minerals used in batteries. 

And long term, technologies to develop new batteries for a post lithium ion world can 

sway the of industrial power for a post 2030 in favour of !he US. The most 

promising is solid state but this is far a commercial reality. At Benchmark, we believe 

advanced lithium ion is the next successor lithium ion. What this means is nano 

engineering the cathode and anode to increase capacity of the battery. 

3 
108 

U.S. Senate Committee on Energy and Natural Resources 

October 3, 2017 Hearing To Examine tbe Status of Energy Storage Tecbnologies, Reviewing 

Today's Tecbnologies and Understanding Innovation in Tomorrow's Tecbnologies 

Questions for tbe Record Submitted to Mr. Simon Moores 

Question 2: You mentioned in your testimony the potential to develop minerals in the 

United States. 

a. What is our mineral potential in the U.S.? 

Very strong, especially in Nevada (lithium brine and clay), Alabama (graphite). Alaska 

(graphite), North Carolina (lithium hard rock). 

While some of these resources may not be the highest grades, US technology and 

innovation can circumnavigate this. 

b. Of the four that 

we produce 

listed -lithium, graphite, cobalt, and nickel which ones can 

Graphite, lithium, cobalt and nickeL The US has some strong resources for all of these key 

battery raw materials. The critical factor will be to the battery grade refining step in 

tandem with the resources, however. This is more 

For lithium ion batteries, the US needs to 

speciality chemicals one and help them go 

out of a commodity mind set and into a 

!he niche the mainstream. 

c. How can we bring more investment on ail ends of the supply chain to the United 

States? 

> Examining mining permits- across the board permitting is a major issue for new mines in 

the US; is worth looking at Quebec or Ontario as a template for some states. 

> Regular discussion on a Senate level about these key raw materials will help bring noncommodity funds into the space 

> Creation of a International Materials Agency as proposed by David Abraham would be 

the ideal forum for this regular discussion to take place and encourage industry to lake 

action 

Question 3: Your testimony focused on the use of lithium-ion batteries in electric 

vehicles, and it a risk for price increases in the minerals needed for 

on a projected increase in demand for lithium of a factor of ten 

a. Are we talking about doubling the price of an electric vehicle, or something 

significantly less? What is the scale of the impact and what is the likelihood of 

price increases stalling out demand for electric vehicles? 

While raw materials are 60% of the cos! of a cell, the cost of the ba!!ery for the vehicle is 

much lower. 

For example, lithium has gone from 3% of the cost a battery cell to 7% 

spike. However, the cost of a lithium ion cell through mass production and "LI'""'''L"''u 

makers has fallen to $140/kWh. The price impact a 

is and well under 1%. the auto makers and battery producers are 

absorbing this impact for now. 

The last for a 1-3 years until new 

price shock will also the EV industry long term as its investment 

and existing businesses to change their blueprints for an EV future. 

4 
109 

U.S. Senate Committee on Energ_v and Natural Resources 

Octo be•· 3, 2017 Hearing To Examine tbe Status of Energy Storage Technologies, Reviewing 

Today's Technologies and Understanding Innovation in Tomorrow's Technologies 

Questions for the RL'Cord Submitted to Mr. Simon Moores 

b. We know that lithium-ion batteries are used in many other applications, including in 

the defense industry. If the demand increases as you expect, what will happen to the 

other technologies that also require lithium? Will we still be able to meet the demand 

for those sectors? 

In the medium term 3-5 

for lithium and other 

stationary storage. 

the situation will no doubt cause disruption to existing markets 

battery applications outside of ion cells for EV and 

Long term however (>5years), investment into new supply will benefit all users of lithium and 

could indeed spark growth in these other markets such as lithium aluminium alloys for 

aerospace. 

Ultimately, it's in the interest of the suppliers to maintain their customer base as this leads to 

a healthy stable business. 

Question from Senator Ron Wyden 

Question: Mr. Moores, ! understand that the life 

batteries is something that needs to be kept in 

and environmental safety of 

as the storage industry grows. 

What would you suggest should be done at the federal level to address this problem? 

Creation of an International Materials Agency- as mentioned above- would also be a great 

addition to this issue. 

Energy storage is the major megatrend that will define the next generation. The supply 

chains should be seen on the same level as the oil and gas supply chains. And regular 

professional forum which includes federal involvement and industry experts would solve this 

issue and encourage industry to take a bigger role. 

I would suggest an annual gathering in Washington to discuss all issues from the 

international slate of play to policy to investment Benchmark Mineral Intelligence would be 

more than happy to lead such an initiative from an industry perspective. 

Questions from Senator luther Strange 

Question: Mr. Moores, in your testimony you mention two graphite companies {one in 

Alabama and one in seeking to mine and process flake graphite for battery 

grade material. Can you more on where graphite is currently being sourced 

and on potential strategic advantages for the U.S Department of Defense? 

The US is sourcing its natural graphite from China and Brazil. 

a. Is it possible North Korean graphite could currently be finding its way into the U.S. 

supply chain? 

concentrate small amounts. The trade route of 

of the country into a very famous graphite producing 

5 
110 

U.S. Senate Committee on Energy and Natural Resources 

October 3, 2017 Hearing To Examine tbe Status of Energy Storage Technologies, Reviewing 

Today's Technologies and Understanding Innovation in Tomorrow's Technologies 

Questions for the Record Submitted to Mr. Simon Moores 

This is where most of China's flake graphite is produced and it is also a hotspot 

ion battery anode production. 

So while !he volumes and probability is on the lower side, there is a possibility !hal 

lithium 

Korea graphite could be in the anodes that are used in Asia lithium ion balleries. In turn 

these are the batteries that Major US consumers purchase. So there is a chance that North 

Korea graphite could be these cell phones, tablets, laptops and EVs. 

b. Can U.S. graphite compete with China on cost? With consistency and 

quality? Environmental footprint 

From a value added products perspective believe the US can. There are many large 

specialist companies in the US that have taken advantage of low cost raw material 

China to process into higher value products. For the battery anode industry there is a 

huge opportunity to become a supplier of this critical lithium ion battery component 

which at the moment is dominated by 

For lithium ion batteries, producers require a very high quality and constant product These 

are nano battery raw materials that require specialist knowledge which does 

exist in the 

Simon Moores Managing Director Benchmark Mineral Intelligence I London I UK 
111 

U.S. Senate Committee on Enet·gy and Natural Resources 

October 3, 2017 Hearing 

To Examine the Status of Energy Storage Technologies, Reviewing Today 's 

Technologies and Understanding Innovation in Tomorrow's Technologies 

Questions for the Record Submitted to Mr. John Seifarth 

Questions from Chairman Lisa Murkowski 

Ouestion 1: FERC recognized the importance of the advent of mass depl0)1nent of energy storage 

technologies \Yith a new Notice of Proposed Rulemaking last year, followed by a policy statement this 

year. TI1is is something that ENR will continue to track in our oversight role. We have heard testimony 

about the various grid services that can be provided by different types of energy storage technologies. The 

industry is grappling with how to properly evaluate and commoditize those benefits moving forward. I 

believe that our role should be to remove barriers to market for energy storage technologies. As the 

markets evolve, are there any specific challenges in terms of rules or regulations that deserve our 

attention? 

Answer: We agree that there is legislation that can help such as: H.R. 2880, Promoting Closed-Loop 

Pumped Storage Hydropower Act; S.\455, Energy Storage Goals and Demonstration Projects Act 

S.l460, Energy and Natural Resources Act of 2017: S.l85 L A bill to require the Secretary of Energy to 

establish an energy storage research program, demonstration and deployment program, and technical 

assistance and grant program, and for other purposes; S.\876, A bill to direct the Secretary of Energy to 

establish a progran1 to advance energy storage deployment by reducing the cost of energy storage through 

research, development and demonstration, and for other purposes; S.l868, A bill to amend the Internal 

Revenue Code of 1986 to provide tax credits for energy storage technologies, and for other purposes. 

We generally feel that reducing the barriers will help make the technology accessible to the market. 

Barriers and artificial stimulus of certain technologies arc not helpful to a market that needs to develop for 

the long tem1. 

Despite providing grid stability and flexibility, paving the way for intermittent sources of energy to be 

added to the grid, and enabling the grid to work reliably and efficiently, energy storage development 

continues to lag behind demand. Unfortunately, there is no mechanism to accurately price these services 

on the market. If they arcn 't priced or valued correctly, storage won't get built until it's too late and our 

grid becomes unstable. 

We're encouraged that FERC is taking a closer look at these challenges, as is DOE through its grid study. 

We do think there are strong pumped storage hydro pilots and R&D programs that should be supported. 

As I stated in my written testimony, streamlining the licensing process for hydropower will also have a 

positive impact on pumped storage hydro development, as would re-instating the production tax credit for 

hydropower (as it has been for wind, solar, etc.). The regulatory issues that slow hydropower 

development have a significant impact on pumped storage. This committee has done great work on many 

of these fronts and we encourage you to continue that valuable work. 

Question 2: Some see energy storage, and the integration of electric vehicles, as a potential challenge to 

the current utility business model. How could utilities leverage energy storage technologies within their 

existing operations? 

Answer: As you know, we are an OEM for generation equipment and pumped storage hydro and would 

recommend that you direct this to the fully vertically integrated utilities that control the path and flow of 
112 

U.S. Senate Committee on Enet·gy and Natural Resources 

October 3, 2017 Hearing 

To Examine the Status of Energy Storage Technologies, Reviewing Today 's 

Technologies and Understanding Innovation in Tomorrow's Technologies 

Questions for the Record Submitted to Mr. John Seifarth 

energy from generation to end users, They can provide feedback on where the most value can be 

generated by inserting and modernizing various storage technologies within their own operations. 

Pmnped storage hydro technologies provide bulk storage, various degrees of rapid response, base load, 

inertia, reserves, blackstart capabilities, frequency control, etc., all of which have value in one form or 

another in an electricity system. As mentioned in the previous question, the valuation for these items is 

not clearly defined which makes building a business case around many of these technologies very 

difficult. Improving the clarity and consistency of the valuations nationally or regionally will go a long 

way toward improving the implementation of these technologies within existing utilities. 

The very basis of this question speaks to those challenges with pricing storage in generaL There is no 

doubt that utilities face challenges associated with an evolving energy landscape, and storage is a big part 

of combatting those challenges. The expansion of electric vehicles \Vill require even more flexibility in 

the power generation supply. 

Question 3: Your testimony mentions pumped storage as a storage resource, but in many respects, a 

traditional dam on a river also can provide the power grid with many of the services provided by pumped 

storage. Can you describe the similarities and differences between traditional hydro and pumped hydro in 

relation to grid operations? 

Answer: In generating mode, both types of power plants usc the water head difference to produce 

electrical power and both technologies can avoid curtailment of wind and solar (in case of run-of-the-river 

within the river level limits). 

There are many differences, however, including: 

Run-of-the river power plants cannot store bulk energy since the river flow has to be maintained 

in certain limits and there arc no pumps available. Therefore, the ancillary services arc limited. 

The produced energy from a run-of-the river power plant is a pure function of the river water 

flow and its head. TI1e electrical power is not really dispatchable, but it can be reduced (to zero if 

necessary). Unfortunately, run-of-the-river flows would then be handled by the spillways thus 

spoiling the generation of renewable energy. 

Run-of-the-river (as well as thermal power plants) cannot handle negative residual load (residual 

load = demand - renewablcs (PV, wind, hydro) - must run power plants (like nuclear and 

lignite)). Pumped storage hydro can handle such negative residual load since it is equipped with 

pumps. The power of pumped storage hydro is fully dispatchable in a positive and negative 

direction. 

Ptmtped storage hydro can provide grid scale load changes in both generating and pumping 

modes in case of variable speed technology. Pumped storage hydro provides significant ancillary 

services (since it is equipped with a significant storage capability) such as: 

o spinning reserve (primary control) in generating and pumping mode, 

o fast balancing reserves for secondary and tertiary grid frequency control, 

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113 

U.S. Senate Committee on Energy and Natural Resources 

October 3, 2017 Hearing 

To Examine the Status of Energy Storage Technologies, Reviewing Today's 

Technologies and Understanding Innovation in Tomorrow's Technologies 

Questions for the Record Submitted to Mr. John Seifarth 

o fast compensation of forecast errors created by wind and solar, 

o congestion management of high-voltage transmission lines (re-dispatch), 

o voltage control in synchronous condenser mode, 

o grid stability, such as islanding operation and black start capability. 

Question 4: You mention in your written statement that pumped hydro storage is "underutilized" Can 

you explain this further? If it were more fully utilized, to what extent would pumped storage displace 

other energy storage technologies on the grid? 

Answe•·: Energy storage is clearly needed across all types of grids throughout the United States. Pmnped 

storage hydro is the only proven, large-scale form of storage and accounts for 97'Yo of grid storage 

capacity, but ifs not the only storage option. In fact, it shouldn't be the only option since its unique 

topographical requirements limit where pumped storage hydro facilities can be built. We don't view 

expanded pumped storage hydro as displacing other storage technologies, but rather supplementing and 

working in concert with them. As is the case with our energy supply, we need to responsibly utilize all 

available technologies and sources to meet future demand. 

Today, pumped storage hydro is significantly underutilized. The Department ofEnert,')··s Hydropower 

Vision Report identifies many of these opportunities, and detem1ined that pumped storage hydro can 

grow by 36 gigawatts -more than doubling current installed capacity. TI1at statistic alone illustrates the 

extent to which pumped storage is undemtilized. 

Question 5: Dams and hydro facilities have an impact on the environment- as do batteries and other 

technologies. Arc you aware of any analysis comparing the environmental impacts of these technologies? 

Answer: We arc aware of comparisons currently being studied in academia and industry. Some of the 

themes that arc becoming evident include: 

batteries have a limited life time due to chemical process with a ma:ximum of 15 to 20 years. 

whereas pumped storage hydro is I 00 years 

the load cycle of a battery is limited- 3000 to 5000 load cycles compared to pumped storage 

hydro at 50,000 to 950,000 load cycles 

the chemical recycling and disposal of used/damaged batteries is not yet finalized 

life cycle greenhouse gas emissions for a typically sized pumped storage facility of more 

than 1 GW capacity and more than 8 hours load cycle are substantially lower than the 

erection and operation of a comparably sized battery storage facility 

Question from Senator Ron Wyden 

Question: In your testimony, you described innovations in the technology behind pumped hydro storage 

that allow systems to respond to grid more quickly. I recently introduced a bill, S.l875, that would 

increase the flexibility, efficiency, and reliability of the grid. 

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U.S. Senate Committee on Enet·gy and Natural Resources 

October 3, 2017 Hearing 

To Examine the Status of Energy Storage Technologies, Reviewing Today 's 

Technologies and Understanding Innovation in Tomorrow's Technologies 

Questions for the Record Submitted to Mr. John Seifarth 

Do you believe that, given sufficient R&D investment, further innovations in pumped hydro storage 

are possible that would increase its value to the grid of the future? 

Answer: Yes, absolutely. While pumped storage hydro follows the same basic principles that it did when 

it was introduced over a century ago, the technology has advanced significantly. Not only is pumped 

storage hydro more efficient, but it is also able to respond to grid demands within milliseconds. This 

reduces power outages and ensures a steady flow of power to customers, while also allowing for a more 

streamlined integration of renewable sources into the grid. 

In my written testimony, I applauded the work of Senator Cantwell to include new investment in grid 

storage R&D in the Energy and Natural Resources Act of 20 17. That's a great first step, because I do 

believe the federal government, through the Department of Energy and FERC, can play a positive role in 

researching and ultimately developing new energy storage technology. We encourage researchers to work 

with private industry on their efforts to ensure these technologies can be deployed. 

We also applaud you and your colleagues' work on grid reliability and storage in general, as represented 

by S. 1875. How we utilize these technologies will only grow in importance over the coming decades and 

tl1e committee deserves credit for proactively examining these issues. 

4 
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David S. Abraham 

Senior Fellow 

New America 

The world is on the precipice of an amazing advancement: the ability to produce and store 

vast amounts of energy. We will soon look back at today' s smartphone battery as we do the 

calculator and see it as useful, but extremely limited. 

As the size, power and capacity of energy storage technologies increase from powering 

phones to running cities, we must understand that there are resource implications to this 

transition. 

As we increase our reliance on batteries, especially for vehicles, this revolution will free the 

average American from the gas pump, uncoupling them from the resource dependencies of 

the last generations. But this transformation will not free us from our reliance on 

resources. Instead, we are trading one resource dependence for another with entirely new 

economic, geopolitical, environmental and security implications that must be understand. 

Battery materials made from elements including cobalt, lithium, nickel, graphite, rare earth 

elements and vanadium are at the forefront of this new revolution in energy. Some are 

concerned we are running out of these resources. After all, many of these battery materials 

were just scientific curiosities a generation ago. Now they are entering mass use. 

The U.S. Department of Energy and the European Union both fear that the resources needed 

to produce many of the next generations' products may face shortages. The American 

Chemical Society reported earlier this decade that half the elements are at risk of resource 

shortage over the coming century. 

I do not believe that we now face a geologic resource shortages for any mineral. However, I 

am concerned that we will face resource shortfalls over the next decade that will otherwise 

limit the adoption of battery technologies due to non-geologic reasons: spikes in demand, the 

slow development of supply chains of battery-grade materials and the resource policies of 

other countries. 

Understanding the Resource Dynamic 

To meet our energy storage ambitions, it is critical to examine the flow of these resources, 

understand where they are produced and how they get to the companies that need them. 

Indeed, some of the companies who rely on these batteries often have little idea the long-term 

risks of battery-material supply lines. The challenge for them and our economy is to ensure 

that our supply lines will produce enough of the right material, in the right grade that gets to 

the right supplier at the right time and cost (both environmental and economic). 

Today's battery-powered gadgets are spreading around the world far faster than any other 

manufactured product in history. Within four years of the smartphone's launch, nearly six 

percent of the world's population had one. No product, not the air-conditioner, telephone or 

radio, spread around the world more quickly. A few years later the tablet computer 

accomplished the same feat with greater speed. Our newer products will face even faster 

demand dynamics in an increasingly wealthy world. We must ensure that the rapid 

1 
116 

development in new technology demand does not outpace our ability to produce the material 

needed for them. 

Potential shortfalls-- and fears of them from increased demand and uncertain supply-- will 

lead some companies to choose inefficient battery technologies. This is not some abstract 

theory. Just over five years ago, wind power companies such as General Electric shied away 

from designs that used rare earth elements. At that time, the price of rare earths spiked after 

Beijing cut off exports to Japan and employed greater export restrictions. In a globalized 

world, U.S. companies must have access to the resources they need. 

Today, large multinationals are beginning to act to ensure battery resources. Volkswagen 

announced this month a contract for purchasing cobalt. While it does not use cobalt directly 

in its products, the company needs roughly 8-12 kg of cobalt material in each of the batteries 

in installs as it hopes to produce to millions of electric vehicles yearly. 

The Challenges of Production 

Often mining and material processing companies cannot just turn on the spigot to increase the 

number of battery materials to meet a spike in demand as is done for oil. Like fine scotch 

whiskey, production of new supplies takes time, in many cases, years. 

Ensuring a timely, stable, and sufficient flow of materials faces many hurdles: 

l) Developing a new mine takes a huge capital investment in markets that are slow 

moving and inefficient at allocating capital quickly. Mines can take several years to 

fund and up to l 0 to 15 years to open. 

2) Many of the battery materials are byproducts so they are not mined directly and are 

dependent on the production of a base material whose demand is not often linked to 

its byproduct. 

3) Producing battery materials from minerals is a balancing act of acids and heat that can 

take many years to develop. There is often no "cookbook" to produce some of these 

materials. 

4) Most of these materials are traded off exchanges in backroom deals, making it 

difficult to ascertain the size of the market, complicating investment decisions. 

5) Regulations to establish a mine often take years to meet, meaning promising 

developments cannot be brought on quickly. 

6) Often one country or one mine dominates the production of many critical battery 

materials leading to concentration risk. 

Battery Material Demand 

Each battery technology relies on very specific amounts of materials, with chemistries refined 

uniquely for a product's end use. But there are some general trends, led by the lithium ion 

batteries that are most in demand. 

The research from Benchmark Mineral Intelligence is instructive. Last year the world needed 

80 GWh of batteries to meet vehicle demands. By 2025, the demand is expected to be nearly 

ten times that at 650 GWh. For some perspective, 650 GWh produces 12 million Tesla 

Model 3-sized cars, 8.1 million sedan-style cars or 1.6 million e-buses or trucks. 

2 
117 

The race to produce batteries is on. While the western media heralded the announcement of 

the Tesla Gigafactory, which will have the capacity to produce 35 GWh of batteries by 2020, 

a Chinese competitor, CATL has a far loftier goal: it is building a facility nearly three times 

larger, with a capacity of I 00 GWh. 

The lithium ion megafactories are coming by 2021 

35GWh 34GWh 

111 Ill 111 111 111 

To supply the market, the amount of lithium battery material produced must increase from 

80,000 tonnes to 600,000 tonnes, an increase of 650 percent. The demand would continue to 

grow by 10 to 20 percent per year post-2025. Cobalt demand will likewise would spike. 

According to Benchmark, the cobalt market would grow from 48,000 tonnes produced 

annually to I 00,000 tonnes of battery-grade cobalt material. (The total amount of cobalt 

produced in last year was 96,000 tonnes). Nickel would also face similar spikes. It should be 

highlighted that the resource risk does not stem solely from the total amount of resources in 

the ground but also the capacity of processing lines to tum minerals into materials. 

Geopolitical Risk 

We also must be cognizant of where these resources are mined and produced. The countries 

in parenthesis is where most the material is mined or produced: lithium (Australia, Chile, 

China), cobalt (DRC, China), manganese (South Africa, China, Australia), vanadium (China), 

and rare earths (China). 

Cobalt is of particular concern. More than half is produced in the Democratic Republic of the 

Congo, which is historically unstable and corrupt. What's more, approximately one-fifth 

comes from artisanal mining, raising environmental and human rights concerns as well. 

After the mining, much of the world's cobalt is processed in China where the risk continues. 

Indeed, most of the battery materials, especially critical ones, are almost exclusively mined in 

China, like rare earths, or processed there, as in cobalt. Therefore, the chokepoint for future 

resource could well be in Asia. 

As China embarks on its new industrial policy, Made in China 2025, the country is well on its 

way to dominating the mining, production and deployment of the entire global battery supply 

3 
118 

line. Beijing is using battery technologies and the materials that go into them to dominate the 

production of green energy technologies and the next generation of transport. It will see less 

reason to export battery materials freely to ensure supplies for these domestic industries. 

The Role of Government 

To ensure we can continue to develop resources, the U.S. must develop a new generation of 

mineralogists and material scientists who can focus on battery technologies. Too many 

potential students have been guided to other careers, leaving few to replace the large numbers 

leaving the fields. Funding to support our research universities is criticaL 

The government must also encourage the development of standards to lead to more efficient 

use of resources, and regulations when needed to encourage greater recycling and reuse of 

materials with a focus on supporting a circular economy. The market does not always lead to 

efficient post-use material disposal, as, for example, recycling batteries is not often 

profitable. At the same time, permitting for mining should be re-examined as development 

policies must maintain clear, stringent environmental standards, but allow for faster 

development of resource areas. 

We also must consider restoring offices in the Department of State that look at mineral 

resources and fund the United States Geological Survey to reinvigorate a resource department 

that has been hurt through attrition and funding cuts over the decades. 

The International Materials Agency 

Internationally, U.S. trade policy has worked to encourage the free flow of resources. Such 

work is vital but insufficient for battery materials. To produce more informed market data 

and reduce the specter of conflict over resources that will increase over the next generation as 

the world relies on more mined resources, it is critical to develop an international forum to 

discuss mined resources. 

I propose the International Materials Agency in the mold of the International Energy Agency, 

which researches oil and energy markets and promotes diversity, efficiency and flexibility 

within all energy sectors. The Agency would also introduce transparency to markets that are 

often lacking in it. 

The International Materials Agency would address potential resource concerns, collect 

statistics, draft market analyses, and create a forum for dialogue in an attempt stem resource 

conflict. Currently, resource conflicts are ineffectively addressed at the World Trade 

Organization. 

A century ago we adopted the use of oil and gas as the mainstay of our economy without 

considering or appreciating the impact. We are now well placed to understand the new 

energy dynamic behind energy storage and make sure we have the resources needed to 

support it. 

4 
119 

OCHH01J WED 10:22 AM CALMAC MANUFACTURING 

.ATTN! u.s. Senate Committee on Energy & Natural Re•ources 

304 Dirksen senate Bllllding 

Wa$hlngtcn, oc 20510 

~hone: {202) 224-4971 

Fax: (lO~) 224-!!153 

FAX No. 2011971522 

IJ·Muil; inl~llfll('1tl!llnc,~<om 

Web: \vww.c':~hml~.<.tQnt 

I fully enjoyed today's full Committee Hearlnato Examine Energy Storage Technologies and ilsterilng t~ the discussion around 

batteries and pumped hydro however there was a huge piece of the PU><Ie missing •• Thermal Energy Storage(TES]. 

As the New Vorl< Times pointed,out on June~. TES is a different type cf battery. TES ls as common as hot Water heaters and 

as innovative as Ice slo,..geconllng tanlis found In high proflle buildings around NYC as well as in high schools, hospitals, retall, 

government fat!litles and many-ather appUcattons. C:urrently1·there.are..over 4,500 Installations 1U'itf"l,OOO MW of lee based TES 

tn 60 countries. Qur _organization manutdctUres fee thermal et\.ergy storage tankS in New Jerseyj S.UltPOftlng local job creaticm. 

What makes TES a smart Investment for Amerltan business Is that lt cost a tenth of what batteries cost and replaces peaking 

plants at a fraction of the price. Plus, ice TES is proven to work and the raw materials are 99% reusable or recyclable. 

In addition, TES addresses the ewnomlc and societal problems associated w~h alr oond~ionlhg on the grl<!, Why is this 

Important? A!r·conditlonlng alone makes up to 40% ofthe grid's yearly peak demand. This air-conditioning demand drives up 

the prfee of grid electrloity.-and Is :the main reason utifities need to ha\le more peaking plants.. Tt,ese pea'king plants are many 

times sited In the most disadvantaged neighborhoods. 

Cleaner, more reliable, flexible energy storag<> resources pan replace these peaking plants and TES Is best suited to do so since 

TES stores cooling- the main culprit behind the need for peaking plants. Batteries address electrioalloads for lights, 

however, It would be highly Inefficient and costly to store energy In a battery only to have lttransformed yet again to. create 

instantaneous cooling. Instead, distributed scale TES and batteries must be Implemented together 1o provide capacity and 

poirwlth renewables. · 

A peak demand set by the 2008 heatwaveln CA led to more power plants being built in case of sn emef1!1'n~y. This has led to. 

California ratepayers footing a bill almost $7 billion higher than they hail in 2008 according to the LA Times. "Although 

California uses 2.6%1ess electrlclty·annuallyfrom the powei grid now [In 20i7] than in 2002, residential and business 

customers together pay $6.8 billion more fur power than they did then." If new power plant construction and new 

transmission lines are avoided and retired fllants are replaced with energy storage, ele<trldW costs can be reduc~d. And 

utilities faz:;ing lower energy r;onsumptian. E;:an be fairly compensated by charging based on cuStomer peak demand. 

tn ccm:!us!on) J invite you to consider more serfou;!y the ro!¢ of TES for the Am'!tic:an·Grld~ consider, fOr example,-tax 

deductions for businesses that lnstarl TES.. Out organization has 120 years Of ener~Y st~rage experience to share and would b~ 

honored to be heard at a futuro ~aring.ln the meanwhile, keep •n eye out for an ypcom(ngPSS Ask This Old House Segment 

which will showcase our lee based TES system tied to solar at a home I~ North carolina an_d si!e the promise of lee thermal 

energy storage for American homes for yourself. 

Jasmine Wl!liams 

Marketing Communications M&>agor 

JWilliams@Calmac.com 

CA~MAC Corp. 

p. 001 
120 

Colin Zeigler 

2858 Kalmia Ave. 

Boulder, CO 80301 

Senate Committee on Energy and Natural Resources 

Date of hearing: October 3, 2017 

Subject: to Examine Energy Storage Technologies 

The efforts by this Committee to examine and assess the viability of energy storage 

technologies and to forecast the innovation of tomorrow's technologies are the right steps 

forward in ensuring energy security for future generations as well as providing new methods to 

adequately respond to natural disasters. 

Need for Legislation 

As a nation we have endured the negative impacts oflarge-scale emission based energy 

production; impacts that we now know far outweigh the inexpensive prices today on electricity 

generation and supply. We must turn to renewable outlets to subsidize our need for energy 

security, to further ensure economic prosperity while balancing our responsibilities as stewards 

of the environment. The issue that arises within these renewable technologies is the environment 

society relationship itself The sun can loose intensity based on cloud coverage, the wind changes 

direction throughout the day and American society requires a reliable supply of energy to 

function. If we are to travel this path of energy source transition, we must also develop the 

capacity to store and ultimately distribute the energy produced, while keeping what energy is 

leftover. This can be achieved by further conversations on the subject of energy storage and the 

proposals of legislation that will assist in the development of these technologies as we move 

towards a cleaner national energy grid. Assembly Bill 2514 enacted in the legislature of 

California provides an excellent blueprint for how we should approach national energy storage 

policies. By incentivizing large utility companies to invest in storage technology we will be able 
121 

to "streamline the time and costs associated with interconnecting new energy resources" 2 

Legislation along a similar vein would reinforce the commitments to national grid restructuring 

that requires adaptation to the new forms of electricity production and distribution. 

Issues of Market Dominance 

The technological advancement within the United States, in terms of eners'Y storage is 

vastly diverse yet, untested. These include: Pump Hydro (PH), Flow Batteries, Fuel Cells, 

Hydrogen, Thermal, Phase-Change materials, among others currently in development. Each of 

these show promise while containing various issues including: possibilities of market 

domination, geography, access to materials, negative cost-benefit relationship and technological 

shortcomings. PH, for example, accounts for a large percentage of back-up and storage capacities 

currently in use; they are however hindered within some geographic areas that lack adequate 

elevation differentiations as well as the likely requirement of damming1 Between 2010 and 2014 

the storage capacity has nearly doubled from 160 MW to 350 MW which is attributed to the 

nearly 91% market share ofPH2 It is within our best interest to ensure the diversification of grid 

energy storage technologies to avoid the inequities that may arise in this rapidly changing 

market, as well as possible geographical limitations. Assembly Bil12514, does well to avoid the 

dominance of a singular type of storage by limiting MW capacity3

. Reforming the Energy Vis on 

1 Taczi, L, & Szorcnyi, G. (20 16). Pumped Storage Hydroelectric Power Plants: Issues and 

Applications. Energy Regulators Regional Association (ERRA): Budapest. Hungary. 

2 Cara Marcy, U.S. Energy Information Administration (EIA), "Nonhydro Electricity Storage Increasing 

as New Policies Arc Implemented," April 3, 2015, 

3

California Public Utilities Commission. Order Instituting Rulemaking Pursuant to AssemblY Bill2514 to 

Consider the Adoption of Procurement Targets for Viable and Cost-EfTectiYe Energy Storage Systems, 

2013. Southern California Edison. 

2 
122 

a energy strategy for New York addresses this as well, calling for a far more competitive market 

in the energy sector as well as the distributive technologies4 Non-Hydro energy storage 

technologies will require additional support through legislative action which in turn will make 

enhance the market price trends projected. According to the Gird-Connected Energy Storage 

Report from Energy Storage Intelligence Service, between 2012 and 2015 the average price of 

lithium ion batteries fell 53 percent and are projected to fall even further within the decade5 

Humanitarian Aid: 

As we approach the new reality of increased storm intensity across the globe with 

warming surface water temperatures we will need to be more prepared than ever to address 

natural disaster recovery efforts. According to studies in recent years the rates of catastrophic 

level storms have been increasing along with a growing concentrated populations near disaster 

prone locations, leaving hundreds of millions in the wake of these disasters6 Further 

emphasizing the need for more efficient disaster relief efforts. Recent natural disasters like 

hurricane Maria crippled entire energy grids, tearing down power lines leaving the 3.4 million 

residents of Puerto Rico without power. This lack of a functioning gird crippled all energy 

dependent infrastructure. The ability for assessments to damage, policing efforts, communication 

4 New York State Public Service Commission. (20 14). Reforming the energy vision. Staff Report and 

Proposal. Case 14-M-0101. 

5 Wilkinson, Sam. Price Declines Expected lo Broaden tbe Energy Storage Market IHS Says. (IHS, 

November 23, 2015) 

6 Jennifer Leaning, and Debarati Guha-Sapir, "Natural Disasters, Armed Conflict, and Public Health,'' 

National England Journal of Medicine, November 2013. 

3 
123 

capabilities, and economic institutions to function, all coalesce to form an even larger problem 

related to their ability to access abundant and reliable sources of electricity. 

Hospitals first and foremost would benefit from a resilient type of energy grid in postdisaster response. Currently we are seeing Puerto Rican hospitals rely on generators in effort to 

continue to care for pre-disaster patients and accommodate new patients post-disaster. This 

reliance on a finite resource does little more than impose an even greater burden on these 

facilities along with the already daunting task of caring for those affected on limited supplies. 

The introduction of portable battery systems would be able to supply a backup energy source in 

these type of events, easing the recovery process. 

If the United States is to continue being a purveyor of humanitarian assistance, on a 

national and intemational scale, we must look to integrate newer resilient energy storage 

technologies to ease the process of recovery and avoid the exacerbation of the crisis. This 

Congress should look to appropriate greater funds to disaster relief specifically concerning the 

deployment of energy storage technologies along with further funding to research ways to 

diversify these mediums of portable storage to enhance our domestic energy security. Within the 

framework of systems thinking, it is highly unlikely that any singular entity will provide the 

answer or act upon that answer "without strong regulatory structure companies will not risk 

capital investment and require payback of many years, however good the teehnology"7

• 

7 Confino, Jo. (2012, October 15). The Art of System Thinking in Driving Sustainable 

Transformation. Retrieved from !!.'''P...':.:il-"'!..!Y..'!!!c-'!!~.""''-'"-"-'-'-'-L-"''!!_ll~2~''..'!.l'"-""~"-"-''..'!.l-~'.12:~~'2:: 

thinking-sustainable-transformation. 

0