Discussion Existing Energy Storage Projects Based on the definitions accepted under the use cases and Section 2835(a), we find that all of the storage projects identified in the Proposed Plan should be counted towards the IOUs’ procurement targets provided that they meet the following requirements: The project demonstrates its ability to meet one or more of the following purposes: grid optimization, integration of renewable energy, or reduction of greenhouse gas emissions. The project is under contract or was installed after January 1, 2010. The project is operational by no later than the end of 2024. Other IOU storage projects that were not identified in the Proposed Plan, such as PG&E’s Vaca-Dixon Battery Project and Yerba Buena Battery Project, should also count towards the IOU’s procurement targets once they have reached commercial operation and meet the three requirements above. Similarly, energy storage capacity that could be obtained from plug-in vehicles and programs/systems that utilize electric vehicles for grid services (Vehicle to Grid) could count towards procurement targets. We further emphasize that since the objective of AB 2514 is to increase the use of energy storage systems, and not to identify existing energy storage systems, we do not believe it would be reasonable to count projects that were in existence prior to January 1, 2010 towards the procurement targets. This limitation is consistent with Section 2835(c), which defines a new energy storage system as a “system that is installed and first becomes operational after January 1, 2010.”
Cost and Value Accounting Approach” which would calculate standard value pricing numbers that would be available for each service that storage technologies provide. Clean Coalition states that under its proposed approach, developers would bid their projects based on standard value pricing, which are deemed to be cost-effective. IEP proposes that the Commission “compare viable storage with viable alternatives on a range of measures, including grid reliability, avoided curtailment, capacity value, and ancillary services value.” Most parties oppose imposing a cost cap. SCE states that it does not support a cost cap for individual offers. It argues that “[g]iven the diverse array of storage technologies, applications and benefits, it would be impossible to develop a single number that would appropriately apply.” PG&E agrees with SCE, noting that any cost ramps could be a leading mechanism to check costs. MEA contends that a cost cap “would create artificial influences that would inhibit communication of true costs within the Energy Storage market.” In a similar vein, CESA argues that it is more important to consider the net benefits provided by resources than to set cost caps. TURN does not think that cost caps are necessary if IOUs have greater flexibility in storage procurement. DRA thinks that if cost caps are imposed, then they should be applied at the program level to ensure market discipline. Megawatt Storage argues that “there is no testimony, evidence or analysis that can be used to set a cap.” AB 2514 requires that energy storage targets and procurements must be “viable and cost-effective.” To that end, we have devoted a great deal of attention and effort into formulating a cost-effectiveness approach that would be sufficient to meet Section 2836.2(d).