I had a good exasperated chuckle at this breathless account of customer-side energy storage that appeared in the Atlantic last week as part of a broader series on "The Great Energy Shift".
The report starts with the ominous warning that "trouble lies ahead" for utilities because customers are going to start installing battery storage systems that help them avoid peak pricing rates.
This is a bit of a facile observation given that utilities are increasingly changing their rate structures to reflect the true costs of providing service, particularly at peak times, that they provide incentives for load management, are experimenting with utility-side energy storage systems, and are in some cases set to provide incentives for customers to do the same.
In what way does this constitute "trouble"?
I appreciate that a hotel operator may have difficulty implementing load management strategies. I mean, turning off air conditioning in the summer in a San Francisco hotel isn't doable, not because guests who pay $300 a night won't tolerate it, but because there just isn't that much air conditioning load when it's only 62 degrees outside!
And installing an energy storage system is not "pulling the plug on the utility", it is load management, pure and simple. And, demand rates have not risen thirty percent in California over the past three years - customers are now seeing peak usage charges for fifty or so hours out of the year.
It makes sense for the utility and/or their customers to manage that peak load. It drives the capacity ratings of the distribution system up, and really kills on the generation side, where marginal costs can spike to well over a dollar a kWh during peak periods.
I'll credit author Todd Woody with at least providing some context around energy storage, including noting that California utilities have been authorised to install 1350 MW of storage by 2020 (the costs of which will be reflected in customer rates, by the way), and that sixty percent of the costs of the system installed at the Intercontinental were covered by incentives (which will also be paid out of rates).
And yes, the system is financed by the maker of the system (Stem), though that is hardly novel, as there isn't a PV array that isn't financed today. (Stem also indicates that they sell utility-side storage systems.)
But I have to say, given all of the regulatory impetus behing real-time utility pricing, orders to install utility-side storage, and subsidies for customer-side storage, I just don't see that the "traditional utility business model, which for over 100 years ago has served its purpose well, has come to an end."
If anything, the utility business model, enabled by the regulatory process, makes the energy storage market viable.