Smart grid and energy storage: Policy recommendations

Traditional energy grid designs marginalize the value of information and energy storage, but a truly dynamic power grid requires both. The authors support defining energy storage as a distinct asset class within the electric grid system, supported with effective regulatory and financial policies for development and deployment within a storage-based smart grid system in which storage is placed in a central role. This would enhance load and market operations through realization of the full range and value of services from storage technologies. Energy storage technologies provide significant opportunities to further enhance the efficiency and operation of the grid. Its ability to provide application-specific energy services across different components of the grid make it uniquely suited to respond quickly and effectively to signals throughout the smart grid. Therefore, energy storage as a distinct asset class will increase the value of storage investments while enhancing the operation of the smart grid. To further this goal, storage requires policy support. Research, development and demonstration (RD & D) policies will increase operational experience and reduce costs; investment tax credits will accelerate investment in storage projects; and continued market deregulation will augment revenue streams, enhance competition, and provide more accurate prices for storage services.