The Storage Technology of Renewable and Green Energy Act of 2010 (S. 3617)
Background
On July 20, 2010, the STORAGE Act was introduced by Alliance honorary chair Senator Jeanne Shaheen (D-NH), honorary vice-chair Senator Jeff Bingaman (D-NM) and Senator Ron Wyden (D-OR). The legislation is a revision of a similar bill introduced in 2009 by Sen. Wyden. It has been referred to the Senate Finance Committee. One supporter of the bill is David Nemtzow, former President of the Alliance and now Chief Policy Officer of Ice Energy, a thermal energy storage provider.
The STORAGE Act would provide several types of incentives to promote the growth of the energy storage industry. While the bill’s chief aim is to expand opportunities for renewable and thermal energy, the bill has several implications for improving energy efficiency.
Legislative Summary
For large-scale energy storage devices that can feed back to the grid and that are able to sustain a power rating of at least one MW for at least an hour, the bill would create an investment tax credit of 20 percent, worth up to $30 million. The bill would create similar incentives for public power and cooperatively owned utilities, which cannot benefit from tax credits, by making $3.5 billion in clean renewable energy bonds (CREBs) available for investments in these energy storage devices. Eligible technologies include hydroelectric pumped storage and compressed air energy storage, regenerative fuel cells, batteries, superconducting magnetic energy storage, flywheels, thermal energy storage systems and hydrogen storage, as well as combinations of the preceding and other technologies as may be determined by the Department of the Treasury in consultation with the Department of Energy. One criterion for project selection under the 20 percent investment tax credit is the degree to which the project would enable greater grid efficiency.
For energy storage devices whose primary purpose is to provide on-site renewable energy, the bill would provide a 30 percent investment tax credit worth up to $1 million. Eligible devices must be capable of storing at least 20 kW and capable of releasing at least 5 kW for four hours. Property used to charge plug-in and hybrid electric vehicles is eligible for the credit if it is equipped with smart-grid services that control time-of-day charging and discharging. Eligible devices must have a roundtrip energy storage efficiency of at least 80 percent.
The bill would also provide a residential energy tax credit of 30 percent for smaller storage devices whose primary purpose is to provide on-site renewable energy. Eligible devices must be capable of storing at least 2 kW and capable of releasing at least 500 watts for four hours. Property used to charge plug-in and hybrid electric vehicles is eligible for the credit if it is equipped with smart-grid services that control time-of-day charging and discharging. Eligible devices must have a roundtrip energy storage efficiency of at least 80 percent.
Implications
By encouraging the development of the energy storage industry, the STORAGE Act of 2010 would make renewable energy production more useful and more valuable, facilitating the spread of renewable energy investment itself. However, the act also promotes energy efficiency. The bill sets a minimum efficiency standard on storage devices eligible for some tax credits and places a priority on improved grid efficiency for the large-scale investment tax credit. In a broader context, any support for energy storage devices improves energy efficiency by capturing renewable generation that otherwise would have been wasted and by capitalizing on off-peak fossil fuel generation, which is often more efficient than peak generation.
