My organization, NAATBatt, focuses on energy storage technologies that have application both in electric vehicles and grid-connected energy storage. As a consequence, the storage technology we talk about at our conferences and meetings tends to be systems that will be installed in electricity distribution systems, rather than bulk storage systems that might be operated by or in connection with a generator or used to support transmission systems.
Distributed energy storage (DES) systems will be located in buildings or communities, close to the customer, in or adjacent to substations, or on the customer side of the meter. While third party ownership and financing of DES systems is possible, non-customer owned DES systems will probably be owned by utilities as regulated assets. Accordingly, deploying DES systems will require utilities to be able to make the case to their PUC's that expenditures on DES systems are "just and reasonable".
Today that is a difficult case to make. As one senior utility executive observed, it is cheaper to generate an electron than to store one. Recent white papers by EPRI, SCE and Sandia (all of which you can read on our Web site) purport to calculate the current cost of storage relative to peak generation. Until that equation changes, DES systems will be an interesting technology relegated to government-funded demonstration projects.
There are two ways to change the equation. The first is by improving the technology of DES systems in order to lower their cost. Zinc-air, sodium-ion, advanced lead acid and secondary use of EV batteries all offer the prospect of reducing significantly DES system cost. But they need further work.
The second way to alter the equation is to recognize (and better to design DES systems so that PUC's will recognize) that an electron generated by a DES system may be more valuable than an electron generated by a gas peaker plant or other spinning generation reserve asset. The reasons why this is the case are numerous and beyond the scope of this response.
As to why David Mohler thinks that, in essence, it will be cheaper to store an electron rather than to generate an electron by 2015, as I said in my post, I am a little unclear. But my assumption is that David thinks we will be make sufficient progress on both solutions to the aforementioned storage vs. generation equation by 2015 for this to be the case.