Storing the future of energy: Navigating energy storage policy to promote clean energy generation

The United States has experienced heightened interest in clean energy sources, with many states implementing renewable technologies for energy generation. These efforts are critical for moving states and the nation toward decarbonization and decreased emissions within the transportation and power industries. A challenge with renewable sources (particularly solar and wind) is the inherent variability of energy generation due to climate and geographic influences. Consequently, there is increased interest in addressing energy storage technologies to better capitalize on excess power from high‐production periods for use in times of low generation. Energy storage comes in many different forms with varying duration. Several forms of energy storage are explored in this report to demonstrate the variety of technology options. Following research of the current state of energy storage policy, this work proposes three areas of potential policy improvements for industry: (1) implementation of a policy framework for states to produce ambitious energy storage procurement metrics; (2) amending of the federal investment tax credit for energy storage technologies to be duration‐based; and (3) incentivization of sustainable battery practices. It is imperative for state legislatures to create informed energy storage goals alongside current renewable energy metrics. Amending the modern federal investment tax credit system to include duration‐based incentivization will encourage the deployment of long‐duration technologies to combat variation in electricity generation over the course of seasons. Finally, for the continued deployment of batteries, sustainable practices must be implemented to mitigate material and environmental challenges posed by them, including recycling practices and alternative chemistry utilization.


On December 8, 2021, President Joe Biden signed Executive
Order 14057, titled "Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability." In the order, the United States is slated to be a global leader in sustainability by setting goals for greenhouse gas emissions (GHG) reductions. A pathway is outlined in the "Federal Sustainability Plan" to achieve reducing emissions by 50%-52% from 2005 levels by 2030. This plan includes 100% carbon pollution-free electricity by 2030 with 50% on a daily and hourly basis and investing in climate resilient infrastructure and operations. 1 In 2021, renewable energy accounted for 20% of all U.S. electricity generation, as shown in Figure 1. This overall share is projected to grow to 22% in 2022 and 24% in 2023 according to the U.S. Energy Information Agency (EIA). 2 Specifically, variable renewable energy (VRE) is expected to grow, which refers to solar and wind energy systems. Historically, VRE systems have benefited from federal investment tax credits, which have decreased manufacturing costs for these energy sources. The solar investment tax credit included within the Consolidated Appropriations Act in 2021 was extended through 2023, which has spurred rapid growth in the past 2 years. 3 Wind energy development has had the recent decline in its typical annual growth but is projected to increase by 16% in 2022 and 4% more in 2023. The EIA attributes this slower growth to the production tax credit ending its benefit program after 2022 and the recent supply chain challenges. 2 Development of VRE systems is limited by generation, transmission, and resiliency challenges. These come from the current nature of the U.S. electricity grid: one of the oldest and most complex technological structures in the country.
Electricity and the supply chain that delivers it from producers to consumers can be characterized in three functional groups: generation, transmission, and distribution. Generation includes all plants and generators that contribute to the fuel mix, which is over 7000 operational power plants in the country. 4 Transmission refers to the infrastructure that transports the electricity from generation sites to more localized distribution systems, which will include step-up substations, transmission power lines, and step-down substations. In the United States, there are over 360,000 miles of transmission lines, with about half of those miles being high-voltage lines. 4 This infrastructure finally leads to distribution systems to deliver electric power to a community level, which includes lower-voltage distribution power lines and the ultimate end use by customers.

The transmission and distribution infrastructure across North
America is subdivided into four power grids known as the interconnections, which are the Eastern Interconnection, the Québec Interconnection, the Western Interconnection, and the Electricity Reliability Council of Texas Interconnection. The Eastern Interconnection includes about two-thirds of the continental U.S. and three Canadian provinces, while the Western Interconnection covers the remaining states and two provinces. The remaining two interconnections are confined to their respective regions of Québec and Texas. 4 The wholesale sale of electricity is managed by regional transmission organizations (RTOs) and independent system operators (ISOs), which will be discussed further in Section 3 of this report.
Across the U.S. electric grid, electricity that is produced is transmitted immediately. Because there is no utility-scale electricity storage, transmission operators must coordinate with generation plant operators so that demand is met with the appropriate amount of electricity production. The demand varies throughout a given day and across seasons, as shown by Figure 2. Various peaks occur throughout a day, placing demand on generation plants to ramp production in short time periods to satisfy requirements. For generation, baseloading power plants provide a level of demand that is satisfactory for off-peak hours, while peaking power plants ("peakers") become active to anticipate times of higher demand. These peaking plants are commonly natural gas-fired plants that can come online quickly but at high fuel and environmental costs. 4 These changes in demand are especially challenging for VRE systems, as peak demands may occur at times when they are not able to produce electricity. Furthermore, without some demand or location to take in the electricity produced by VRE systems, the electricity produced when appropriate conditions are met can be wasted. This leads to the entire grid adapting to the variable schedule of renewable generation, which is a burdensome task for an aging infrastructure.
Finally, it is important note that due to this variability, any shortcomings in VREs' production must be met by peakers or nuclear energy. 4 Despite the challenges VRE systems face with the modern electricity grid, there exists a class of technology to mitigate reliability challenges and to increase the overall usage of renewable energy: energy storage. In a broad sense, energy storage systems (ESSs) work by taking excess electricity and storing it in various forms for later use. The advantage of integrating this technology with VRE systems is that energy produced during non-peak times can supplement demand, even when production conditions may not be optimal. This reduces F I G U R E 1 2021 Electricity mix. Renewable energy sources accounted for approximately 20% of all electricity generation. The unmarked portions include geothermal energy (0.4%) and other sources (0.6%) 2 the need for fossil fuels or other emitting energy generators to offset peak demands that cannot be met by VRE systems.
In Section 2 of this report, many different energy storage technologies will be explored. A key takeaway from this technology exploration is that many different ESSs may be applicable for the modern grid, but the differentiating factor is storage duration. In this work, short-duration energy storage (SDES) is defined as any technology that stores energy up to 8 h, while anything longer is classified as long-duration energy storage (LDES). The LDES duration can include timeframes as long as days, months, and even seasonal storage. The implementation of ESSs and specific technologies is inherently application-based, so the discussions will include what types of grid application each technology can best support.

| ENERGY STORAGE METRICS AND TECHNOLOGIES
Energy storage technologies can aid the power grid through frequency regulation, peaking capacity, and energy arbitrage. 5 The basis for storage is the ability to retain electricity during periods of peak production for use in times of enhanced demand, or, in the case of VREs, when energy production is limited. Table 1 provides a summary of energy storage technologies and some qualitative comparisons among them. For the purposes of this report, the technologies explored will be divided among electrochemical, mechanical, and additional technologies, which will encompass new and emerging forms of chemical, thermal, and electrical storage.

| Electrochemical storage technologies
Battery storage technologies rely on electrochemical reactions in an electrolyte solution or membrane that transfer electrons from a cathode (positive electrode) to an anode (negative electrode) during charging and inversely for discharging. The rate and lifetime of charge cycles is dependent on the operating conditions of the battery and the chemistry utilized. Furthermore, physical and operational constraints affect a battery's application, including power output and duration of discharge. 7 In this report, battery storage technologies explored included lead-acid, nickel-based, lithium-ion, sodium-based, and flow batteries. For consistency, "large-scale" battery energy storage systems (BESS) refer to systems with a nameplate power capacity greater than 1 MW and are grid-connected, while "small-scale" BESS includes all other systems.

| Lead-acid batteries
One the first batteries developed in the nineteenth century, and one of the oldest forms of energy storage, is the lead acid battery (PBB).
PBBs are widely used for vehicles, accounting for less than 1% of large-scale BESS. 7 With a lead cathode and lead dioxide anode immersed in sulfuric acid solution, build-up of lead sulfate on the cathode leads to performance reduction of PBBs and hinders their discharging capability. 7 PBBs are associated with low upfront capital costs but shorter life spans of about 3-6 years. 5 Because of this, use of PBBs for widespread grid applications has been limited, with lithium-ion batteries displacing PBBs used at utility-scale. However, in scenarios where upfront costs have a strong influence, such as microgrids or other off-grid applications, PBBs are still utilized. Globally, PBBs account for 2% of energy storage deployment as of 2018. 5

| Nickel-based batteries
A BESS used in early development of large-scale systems is the nickelbased battery (NIB). These systems are associated with higher costs but offer operational advantages such as being fully discharged and handling overcharging more effectively than PBBs. 8 These operational improvements reduce, or even eliminate, the need for charge controllers when integrated NIBs into an energy system. NIBs are characterized in three main chemistries: nickel-cadmium (Ni-Cd), nickel-zinc (Ni-Zn), and nickel-metal hydrides (Ni-MH). Overall, deployment of NIBs has been limited due to material cost and comparatively short cycle life. While cycle lives may be more optimal than PBBs, NIBs are associated with long holding times rather than consistent recharging and discharging cycles. 7,8 Furthermore, NIBs require the usage of metals that are detrimental to the environment.

| Lithium-Ion Batteries
The leading battery in installed power and energy capacity for largescale BESS operating in the United States is the lithium-ion battery (LIB). In 2019, LIBs accounted for more than 90% of such capacities. 7 These batteries are one-third the weight of PBBs, but with the same or greater energy density. With lower internal resistance losses, LIBs F I G U R E 2 Daily system demand profile. 4 The red numbers indicate societal activity, which are as follows: (1) sleeping, (2) breakfast preparation, (3) morning activities, (4) lunchtime, (5) afternoon activities, (6) dinner preparation, (7) dinnertime, (8) evening activities, and (9) retiring.
can charge and discharge at high rates and have double the lifetime of PBBs. 5,7 Most planned solar projects that integrate battery storage utilize lithium iron phosphate (LFP) batteries. Like NIBs, LIBs still require environmentally detrimental and scarce metals, namely cadmium. Production costs of LIBs have been drastically reduced since their inception, making this technology an easily implementable form of storage for many SDES applications. 7

| Sodium-based batteries
An emerging alternative to the LIB is the sodium-based battery (NAB), accounting for 2% of the U.S. large-scale power capacity and 4% of energy capacity. 7 The most prevalent form of NABs is sodium-sulfur batteries, which utilize more accessible materials and have comparable lifetimes to LIBs. 5 The minimal deployment of these batteries can be attributed to the high operating temperatures (300-350 C) to maintain molten sodium, posing higher operating costs and safety consid-

| Mechanical storage technologies
Historically, mechanical energy storage has been the most common form of energy storage in the world. Storage is accomplished in these systems through the kinetic energy of a spinning mass or by moving a mass or volume to a greater potential. 5  (TW) of capacity for a 10-h storage duration. 10 The results of this study may serve as a resource for states, regional transmission organizations (RTOs), and independent system operators (ISOs) for performing project assessments for closed-loop PSH in their respective regions.

| Flywheel technologies
Flywheel energy storage systems (FESS) consist of a rotor (flywheel), bearings, and motor-generator and reciprocally convert electricity from the source to rotational kinetic energy. Their long life, quick response time, and low maintenance make FESSs ideal for a variety of grid services, especially frequency regulation. However, FESS deployment has been limited beyond smaller-scale applications due to high costs on an energy basis compared to BESS or PSH technologies.  12 The largest commercialization of the technology is diabatic CAES (D-CAES) which does not recover the released heat from gas compression, requiring an external heat source for expansion. Adiabatic CAES (A-CAES) can store heat from the gas compression at a higher temperature and in some systems supplies additional heat during expansion to generate more power. 12 The energy capacity costs of CAES systems are generally lower since the components of the system have been well-established. When coupled with suitable geologic formations, the duration of CAES can be longer than other systems.

| Alternative storage technologies
The remaining alternative storage technologies include chemical, thermal, and electrical storage. There are multiple chemical candidates for use in chemical storage, including hydrogen, ammonia, and methane.
Hydrogen has garnered the most funding and research given its high energy density and applicability to the energy industry, so that will be the only chemical explored here for energy storage. Thermal energy storage refers to technologies that store heat from energy generation, whether by converting the heat to electricity or applying the heat directly to a system. Finally, electrical storage includes supercapacitors and superconducting magnetic energy storage (SMES), which both have fast response times and high-power capacities. 5 For this work, only SMES will be discussed given its few commercial applications and that supercapacitors are not yet deployed at utility scale.

| Chemical storage
Chemical storage using hydrogen involves the production of the gas and eventually converting it back into electricity through a chemical reaction. Generally, large scale production of hydrogen, including for energy storage, will require water and electricity feedstocks. One of the oldest is electrolysis, where water subjected to electricity will yield hydrogen and oxygen. With the low voltage required for the splitting of water atoms, renewable energy such as solar and wind power are candidates for direct electricity sources for hydrogen production. 5 Currently, 97% hydrogen produced in the United States comes from steam methane reforming (SMR) of natural gas. 14 After hydrogen is produced, safety and economics challenges are presented regarding how it is to be stored. For the purposes of this report, the terms "goal," "target," and Virginia's general assembly, the former mandating 5 MWh of storage by 2020 and the latter mandating 3.1 GWh by 2035. 23,24 With these goals, target, and mandate definitions, a spectrum of   is far more common in the space of clean energy is the procurement of VREs. Figure 3 shows a map of the states that have developed The cohort of states that have developed ambitious energy storage goals, targets, or mandates did so with a policy framework that could be modeled in states that have not achieved similar legislation.
This framework is as follows: Conversely, the value of LDES systems is not in the ancillary services they can provide, but in their capacity. These technologies can displace transmission lines, diesel generators, or power plants in their entirety rather than just a few hours from SDES. LDES systems will be able contribute to overall base load of the grid and lessen the need for load-following power plants that are in nearly constant operation. 61 The ability of LDES technologies to be profitable depends on the shifting value of electricity during a given period. The essence of energy arbitrage is to buy electricity at times of lower value and to sell it during a higher-value time. SDES systems can only capitalize on charging lower-value electricity and quickly selling over the course of a few hours. LDES system will be able to charge electricity and discharge at much later, more valuable times. Therefore, the higher upfront costs of LDES technologies can be offset when a system has many "steps" in value. 61 With these market conditions understood, it is evident that the

| Emphasize sustainable storage practices
While the previous recommendation addresses LDES growth, there is no evidence of SDES growth slowing down. In particular, energy storage integration with VREs, specifically with BESS, will grow in the coming years. According to the Energy Storage Association, some 60% of solar projects announced in the next 2 years are hybrid systems with LIBs. The concern with LIBs is the use of toxic materials and their international supply chain. Therefore, this section addresses the sustainability of BESSs from the standpoint of environmentalfriendliness and longevity for the United States.
LIBs have specifically received policy support in the recent years.

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Executive Summary
In the recent years, the United States has experienced heightened interest in clean energy sources, with many states implementing renewable technologies for energy generation. These efforts are critical for moving states and the nation toward decarbonization and decreased emissions within the transportation and power industries.
A challenge with renewable sources (particularly solar and wind) is the inherent variability of energy generation due to climate and geographic influences. Consequently, there is increased interest in addressing energy storage technologies to better capitalize on excess power from high-production periods for use in times of low