The summer of 2016 was one of dire warnings for Southern California energy consumers.

A massive methane leak from the Aliso Canyon natural gas storage facility outside Los Angeles had drained the region's natural gas supply, and the word went out that gas shortages could disrupt the region's power deliveries by the summer of 2017.

Amid fears of rolling blackouts across the nation's second-largest metro area and beyond, utilities like Southern California Edison and San Diego Gas & Electric latched on to a solution that for years had been quietly deployed, but needed an event like a looming gas shortage to be thrust into prime time.

The solution was large-scale battery storage.

Thanks in part to California's crisis, but also improving economics and new state policies, the technology is preparing for unprecedented growth in the United States over the next several years. As much as 1,800 megawatts of new energy storage — mostly from lithium-ion batteries — is expected to come online by 2021, according to GTM Research, which tracks the sector for the Energy Storage Association.

That's eight times larger than total U.S. installed energy storage capacity in 2016 and should translate into nearly 5,900 megawatt-hours of stored electricity that can be dispatched quickly to address power outages, shave peak demand charges or simply enhance grid reliability, according to experts.

Energy storage is also critical to solving the intermittency challenges associated with renewable energy. That's because batteries can smooth the ebbs and flows associated with wind and solar power by supplementing the grid when those resources are not available.

“One of the trends we're seeing lately, and what could be a game-changer, is the level of utility interest and involvement,” said Anissa Dehamna, a principal research analyst and head of the energy storage team at Navigant Research. “We've had growth of a little over 200 percent [annually] in the past, and we're expecting that trend to continue in the North American market.”

World's largest lithium-ion battery system

By early next year, the two Southern California utilities responding to Aliso Canyon — SCE and SDG&E — will bring 104.5 MW of new energy storage capacity online in one of the largest and fastest deployments of clean energy technology in history, according to Ravi Manghani, director of energy storage at GTM Research.

The projects will also move California closer to meeting a 2013 mandate that the state's three largest investor-owned utilities install 1.3 gigawatts of energy storage capacity by 2020.

“Even by the standards of energy storage, this process has been fast, meaning that successful implementation would be a milestone for energy storage and a clear differentiator when utilities face immediate capacity shortfalls,” Manghani said.

The SCE projects, designed and built by a handful of major firms, including Tesla Motors, General Electric and Greensmith Energy, are part of a utility-backed program to boost its energy storage portfolio to roughly 400 MW, which would make SCE the largest utility owner of storage in the country.

Paul Griffo, an SCE spokesman, said the utility's commitment to storage is based on both performance and cost analyses of the technology. In many cases, officials found that storage is less costly, more nimble, and easier to site and permit than new natural gas peaker plants. “It's tough to find sites that work for peakers in highly urbanized areas,” he noted.

In San Diego, AES Corp. will install what is expected to be the world's largest lithium-ion battery system linked to a utility grid. The 30-MW Escondido project, scheduled to begin operation in January, will be able to deliver up to 120 MWh of power to SDG&E's grid for four hours. It will be joined by a smaller 7.5-MW storage battery at El Cajon, Calif., that will be able to deliver an additional 30 MWh of power.

Roughly 3,000 miles away from sunny Southern California, in Colchester, Vt., Green Mountain Power is also raising the profile of energy storage, but in a completely different market from Los Angeles and with a different set of priorities and desired outcomes.

A “turning point”

The Vermont utility, which serves roughly 265,000 residential and commercial customers, recently began deploying storage technology in the city of Rutland, where a 2.5-MW solar array combined with a 4-MW lithium-ion battery is helping to shave peak demand charges for GMP's customers, in some cases by as much as $200,000 per hour.

The company is also partnering with battery maker Tesla to install hundreds of Tesla Powerwall battery systems in Vermont homes. Customers can lease the batteries for $37.50 a month or purchase the battery through the utility and recover their costs via energy credits, according to GMP officials.

Meanwhile, in the Midwest and Mid-Atlantic, developers have installed more than 250 MW of energy storage on the PJM Interconnection grid to aid frequency regulation since 2012.

Currently, PJM accounts for 74 percent of all utility-scale storage capacity, but the market is expected to shift heavily toward California as the Aliso Canyon projects come online, combined with broader development spurred by the state's approaching 1.3-GW storage mandate.

“When we combine solar and battery storage, it opens a whole world of possibilities for our customers,” Mary Powell, GMP's president and CEO, said last October. “This is the future of energy, and it's never been more exciting.”

Experts agree. Energy storage — whether applied at the utility scale in California or deployed by individual businesses and homeowners for backup power and peak-shaving in states like Vermont — has emerged as a key component in the nation's clean energy transformation.

“I think this past year has been the turning point for storage,” said Lewis Milford, president of the Clean Energy Group, a nonprofit that advocates for renewables and clean tech solutions. “We've moved from a question of, 'Is this technology ready for the marketplace?' to 'How do we get enough systems out there to prove the economics of it?'”

Reprinted from ClimateWire with permission from E&E News. E&E provides daily coverage of essential energy and environmental news at www.eenews.net.