INTERVIEW: Gridstor policy VP discusses next frontiers of storage

In an interview with NPM, GridStor’s VP of Policy and Strategy Jason Burwen discussed the areas he views as the next frontiers for storage development in the US as well as the current headwinds currently stifling that growth.

Storage development is accelerating in the US with 2024 set to be the first year that sees more than 10 GW of battery storage installed. Burwen expects to see that pace continue throughout the remainder of the decade concentrated in “areas where interconnection queues advance.” He also says the current “50-50 balance of standalone vs. hybrid storage will fluctuate” and predicts a larger share for hybrid projects as new interconnection options remain “slow and scarce.”

However, he says scheduling constraints, largely driven by slow interconnection queues, are threatening to stifle that growth, particularly in new growth areas for storage that are already bogged down in interconnection requests from solar and wind. He says these queues are “holding back an unprecedented level of deployment interest,” though he says he is hopeful “a good amount” of that interest will still turn into deployments by the end of the decade.

Slowdowns from state and local permitting processes are also “contributing to the problem, especially as deployments expand to places unfamiliar with storage,” added Burwen.

Addressing these challenges “would do a lot of the work to unlock deployments more broadly.” He says potential solutions include additional national reforms beyond FERC Order 2023 to speed interconnection, “especially measures that accelerate network upgrade completion.”

“Fortunately, FERC has just discussed some of these concepts,” Burwen said, referencing last month's two-day conference where FERC put together a number of roundtables discussing grid challenges.

Additionally, Burwen says accelerating new transmission builds like MISO is doing through its LRTP portfolios “really merits the status of a national strategic priority given how much American industrial strategy and data center load growth depend on it.”

Finally, Burwen says developers themselves need to dedicate more staff resources and time into community engagements to build relationships and demonstrate commitments early on in project development to help avoid or mitigate local pushback. He notes that state governments can also play a role in dealing with this issue, which is becoming a trend in a growing number of states around the country including Illinois, Michigan, Minnesota, New York, California, Connecticut, Massachusetts, New Jersey, New Mexico, Florida and South Dakota.

Expansion

On the plus side, Burwen says a number of places “look set to grow” their storage pipelines if they can get past these issues. So far, he says the fastest movers beyond the established California and Texas markets are in western states like Arizona and Nevada thanks to 100 percent clean energy laws.

However, he says Michigan is next up on that shortlist thanks to its recently implemented storage mandate requiring utilities to reach 2.5 GW of storage deployment; he notes the state has already tracked roughly 500 MW of announcements since that mandate was passed including, most notably, from utility Consumers Energy’s signing of a project from Jupiter Power.

“If Michigan’s regulators provide the necessary oversight in the IRP process, I’d expect the utilities there to put more in their subsequent plans and turn them into procurements down the line,” Burwen said.

Burwen adds that he expects other states, particularly in MISO, to follow Michigan’s lead on passing storage targets or mandates for its utilities, though he argues it may not be necessary in some states like Indiana where storage is already popping up in utility RFPs.

Burwen points to a few other key areas of potential storage growth around the country including in SPP, where he says states “have the fundamentals to host and value a fast-growing storage fleet depending on how quickly their queues can move.” He also says recent auction prices in PJM may accelerate developers’ plans to move storage projects to completion over the next couple of years and says he is interested to see how New York’s indexed storage credit “experiment” unfolds and “whether we will finally se delivery on the state’s promising target.”

Additionally, despite the record number of storage projects in established markets in Texas and California, Burwen says he doesn’t expect storage buildouts to slow down thanks to market dynamics. In Texas, Burwen sites ERCOT’s “stunning load growth projections” as a potential mitigant to saturation concerns and notes it “remains to be seen how much of the credit-subsidized, fast-lane gas generation will get deployed” through the state’s Texas Energy Fund grant program.

In California, Burwen says policy compliance will “remain a driver of continued deployment,” though notes how much of that is to be determined as the state’s PUC “works out its next plan and directives.” He says he also expects some longer duration projects in California as battery technology costs decline and grid operators begin to see that need.

“I’m excited to see if something beyond lithium-based batteries can achieve commercial deployments at scale by 2030,” Burwen added.

On the offtaker side, Burwen says utilities will continue to be the primary offtakers for storage thanks to resource adequacy and regulatory compliance needs. However, he also says corporate offtakers are “certainly interested insofar as storage can help get large loads online faster and support their supply needs.” Specifically, he cites the rise of tolling agreements in ERCOT as “among the most interesting developments as storage IPPs are now receiving the interest that used to really just be the province of the gas generators.”

“I suspect corporates will have increased interest in standalone storage if we see compliance markets for hourly energy accounting arise from state regulations or from federal incentive requirements,” Burwen said.

In closing, Burwen said GridStor itself is focusing on acquisitions for projects preparing for “nearer-term market entry,” specifically referencing the firm’s recent acquisition of the 220 MW, 2-hour duration Evelyn Battery Storage project in Galveston County, Texas, which has entered construction and is expected to be online by next summer. Additionally, he says GridStor’s greenfielding efforts will “continue to take positions across multiple regions,” including those discussed as growth markets “where we see projects whose value is robust to a variety of future market outcomes with timing and siting optimized for offtaker interest.”

*This story was originally published exclusively for NPM subscribers last month.

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