Recently, the EPA issued a draft rule regulating greenhouse gas emissions from existing power plants under Section 111(d) of the Clean Air Act. The President praised the agency for creating a flexible scheme that will provide economic and health benefits to the U.S.

The draft rule is the result of hundreds of meetings with stakeholders, including the Energy Storage Association, and the resulting rule sets forth GHG caps for each state while providing flexibility in the particular methodology and technology solutions implemented to attain these goals. Now the clock starts on a 120-day comment period for the public to submit suggestions on how technologies should be quantified and valued in the emissions reduction scheme.

EPA Administrator Gina McCarthy has stressed the flexibility of the rule as well as the ability for cost-effective and innovative solutions to lower emissions, grow the economy, and reduce health impacts from GHG.

As opposed to a rule promulgated under Section 111 (b) of the Clean Air Act in September 2013, calling for new plants to be subject individually to standards and requirements, this draft rule instead provides overarching guidance to the states, which will be responsible—individually or as regions-- for developing plans that will meet the targets.

The rule is scheduled to be completed June 2015 with state implementation plans due June 2016 when the rule will take full effect. The draft rule gives each state different reduction targets under one overarching standard, with a goal of curtailing carbon emissions nationally by 30 percent in 2030, based on 2005 levels. 

You can be sure, that these topics will be discussed at length at the Energy Storage Association's 24th Annual Conference in Washington, DC - as energy storage has a critical role to play in the future of our grid.

A Flexible, Actionable Strategy

The EPA developed this plan in collaboration with hundreds of outside stakeholders, state regulators, the power industry and federal officials; the resulting flexibility will allow states to chart their own courses as to how they will meet their individual targets. While California, New Jersey and New York will continue with aggressive plans and accelerated targets, their progress will be offset by states like which are currently more carbon intensive.

By empowering states to chart their own path forward, the EPA is ensuring the entire energy toolkit we have at our disposal can be leveraged – increased renewable deployment, energy efficiency, demand response, retrofitting, co-firing with low carbon alternatives, regional emissions averaging and markets, and innovative technologies.

Taken as a whole, this rule allows states to work with the power industry and the EPA to develop the solutions that best fit their own specific local needs. In addition, states will be able to join other states in crafting regional plans that maximize energy resources in a given area.

Flexible Energy Assets

Foundational to the rule are the notions that cost-effective, viable, and reliable technologies exist that can move the nation to a lower carbon future. Energy storage certainly meets all of those requirements.

Energy storage is often referred to as the Holy Grail of the energy industry – the key component that can fully unlock the potential of a resilient, on-demand electric grid. Storage can enable expansive growth in renewable generation and empower a more responsive and reliable grid infrastructure.

The full benefit of energy storage lies in the inherent attributes of the myriad technologies available to us today that store energy: electro-chemical batteries working to shift energy from peak to off-peak, flywheels spinning at 60,000 RPMs and delivering sub-millisecond boosts to improve power on the grid, capturing thermal energy to reduce a building's HVAC load throughout the day, advanced flow batteries providing hours of stored electricity.

Each working in harmony, responding to our energy needs in real-time - simply put, the most desired benefit of being able to store electrons to use at a later time is flexibility.

Energy storage is a critical asset in our continuing efforts to reduce harmful emissions of all types in our energy system. Storage devices are already enabling wind farms in Texas and solar arrays in California to operate at their maximum potential – capturing excess production to be delivered when it is needed most. This allows us to maximize our renewable energy output – and sync the delivery of clean, emissions-free energy to when customers and end-users need it most.

But it is not just about augmenting the value of renewables. Energy storage also enhances energy from fossil-fuel plants as well, the focus of the changes to the 111(d) regulations put forth this morning. Energy storage technologies can allow fossil fuel power plants to operate at peak efficiency and not be burdened with the need to respond to minute changes and power fluctuations due to varying demand or the intermittency of increasing renewable generation.

Storage can more efficiently balance supply and demand, and smooth out the peaks and valleys that currently challenge grid operators.

Utilizing stored electrons, energy storage devices are also delivering ancillary services to the grid that otherwise would be fulfilled less efficiently by large, baseload power plants.

In the PJM interconnection, for example, grid operators have instituted a pay-for-performance strategy rewarding technologies that can provide instantaneous and accurate services like frequency response to the grid. Even though the payments to suppliers for these services has nearly tripled, the grid operator has slashed the amount of energy called upon because of fast responding resources’ – like energy storage - inherent accuracy and efficiency. The below chart illustrates these savings in both energy and dollars. 

PJM Frequency The proposed rule outlined by the EPA today paves the way for these dynamic resources to be deployed as a critical component of a more efficient, responsive and flexible grid infrastructure.

It will be critical for the energy storage stakeholder community to engage in the process and ensure that all of these benefits can be valued appropriately in the methodologies states are able to use in meeting their targets.

As a flexible, energy source agnostic asset, storage technology is poised to play a critical role in the plans developed by each of the states. We have already seen procurement targets for energy storage proposed for California, New York, New Jersey, Hawaii and other states across the country – and with these stringent new requirements, we will continue to see demand for energy storage increase.

Whether from a coal-fired power plant, a combined cycle natural gas plant, or a field of wind turbines, storage technologies augment the electricity produced and use it as efficiently as possible - allowing more clean energy to be delivered consistently, when it is needed most, and ensuring fossil fuel is deployed as efficiently as possible.

The proposed regulations allow states, the power industry and the EPA flexibility to leverage all available tools to cut emissions, and that means that collaboration and a mutual understanding of the challenges faced will be essential to progress toward our nation’s goals of a clean energy future.

The energy grid of the future is on course to become an ecosystem that combines distributed and centralized advanced generation technologies and ever-evolving demands, and energy storage is a critical facet of that evolution.