The unresolved question of battery ownership in Maine’s emerging energy landscape is a pressing topic that has been under legislative and regulatory scrutiny for nearly two years. The debate centers around whether energy storage systems such as batteries, reservoirs, or fuel cells should be categorized under “generation” or “distribution,” and consequently, whether utility companies should be permitted to have an ownership stake in these storage systems. This distinction is critical for utility companies like Central Maine Power (CMP) and Versant Power, who are largely prohibited by state law from owning electricity generation plants.
Legislative and Regulatory Scrutiny
The Role of the Maine Public Utilities Commission (PUC)
In March, the Maine Public Utilities Commission (PUC), which was asked by the Legislature to study the issue, released a report. However, instead of providing a definitive answer, the PUC indicated it would continue to investigate and develop guidelines to determine when, if ever, it is suitable for utility companies to own or control energy storage systems. The suggestions would likely consider individual cases to decide the appropriateness on a project-by-project basis. As of now, the PUC is still reviewing the report and studying the matter further to decide on the next steps.
The PUC’s cautious approach reflects the complexity of the issue. Determining the distinction between “generation” and “distribution” involves examining the technical, operational, and economic aspects of energy storage systems. The PUC’s ongoing investigation aims to balance the interests of utility companies, private investors, and the public. This approach implies that the final decision regarding utility ownership will take into account various project-specific factors, including location, capacity, and impact on grid reliability.
Historical Context and Legislative Changes
The resolution of this question holds significant implications for utilities like CMP and Versant. Historically, these utility companies owned both electricity generation plants and the distribution infrastructure comprising poles and wires that transmit electricity to homes and businesses. However, the regulatory landscape shifted in the 1990s when legislation mandated the utilities to divest their generation assets and prohibited them from purchasing new ones. This legislation effectively separated the “generation” from “transmission and distribution” of electricity, creating two distinct sectors within the energy market.
The legislative changes of the 1990s aimed to promote competition and reduce monopolistic control in the energy sector. By separating generation from transmission and distribution, policymakers hoped to encourage innovation and lower electricity costs for consumers. However, as renewable energy sources and energy storage technologies have evolved, the lines between generation and distribution have become increasingly blurred. This shift presents a challenge for regulators and legislators tasked with creating a fair and efficient regulatory framework.
Utility Companies’ Perspective
Arguments for Utility Ownership
Both CMP and Versant have asserted that energy storage should not be classified as generation. They argue they should be allowed to own and manage these storage systems because of their many advantages and the reliability benefits they could bring. Judy Long, Versant spokesperson, stressed the importance of energy storage in stabilizing and maintaining the grid’s reliability, especially with increasing distributed generation sources. She also highlighted potential opportunities to enhance reliability and mitigate constraints, suggesting various stakeholders could and should benefit from owning and operating battery storage systems.
The utility companies’ argument revolves around the critical role energy storage plays in managing the grid. As renewable energy sources like wind and solar power become more prevalent, the grid faces new challenges in balancing supply and demand. Energy storage systems can help address these challenges by storing excess energy generated during periods of low demand and releasing it during peak demand times. This capability is particularly important as Maine continues to integrate more renewable energy sources into its energy mix.
Benefits of Energy Storage for Grid Stability
Energy storage is essential for a grid increasingly dependent on renewable energy sources like wind and solar. These sources generate power intermittently, not always aligning with peak electricity demand times, such as nighttime and winter months. Therefore, the ability to store energy generated during surplus periods for use during high-demand periods is crucial to ensure grid stability and consistent power supply.
In addition to stabilizing the grid, energy storage systems can provide other valuable services. These include frequency regulation, voltage support, and backup power during outages. By enhancing the grid’s flexibility and resilience, energy storage can help reduce the need for costly infrastructure upgrades and improve the overall efficiency of the electricity system. Utility companies argue that their expertise in managing and operating grid infrastructure makes them well-suited to own and operate energy storage systems, ultimately benefiting consumers and the broader energy market.
Maine’s Energy Storage Goals
Current Energy Storage Capacity
Maine is among a few states with established energy storage targets. As of the latest recommendations from the Governor’s Energy Office, Maine has 63 megawatts of utility-scale energy storage installed from six projects, representing about 16% of the 2030 goal to install 400 megawatts. The installed projects are relatively small, each under 21 megawatts, capable of generating power for durations between four to six hours. Nonetheless, larger projects are in development, including a 175-megawatt project in Gorham by Texas-based Plus Power, intended to serve Maine and New England. Additionally, a former paper mill in Lincoln will house an 85-megawatt long-duration energy storage system, capable of discharging energy for up to 100 hours over four days, potentially powering between 64,000 and 85,000 homes.
These developments highlight Maine’s commitment to expanding its energy storage capacity and integrating more renewable energy into its grid. As the state works towards its 2030 targets, the success of these projects will be closely monitored by regulators, policymakers, and industry stakeholders. The outcome of this work will have significant implications for Maine’s energy future.
Historical and Emerging Storage Technologies
Historically, most energy storage in the U.S. utilized hydroelectric pumped storage, involving reservoirs at different elevations to generate electricity by releasing stored water through turbines. While hydroelectric pumped storage remains prevalent, new storage systems primarily rely on lithium-ion batteries. Globally, pumped storage is enjoying a resurgence, especially in Europe, China, Africa, and Australia, both connected and independent of conventional dams.
The evolution of energy storage technologies has opened up new possibilities for managing electricity supply and demand. Lithium-ion batteries, in particular, offer several advantages, including high energy density, fast response times, and decreasing costs. As a result, they have become the technology of choice for many new energy storage projects. However, other technologies, such as flow batteries, solid-state batteries, and even hydrogen storage, are also being explored for their potential to contribute to a more resilient and flexible grid.
Future Prospects and Challenges
Competitive Market and Private Investment
Maine is expected to achieve its short-term energy storage targets via the competitive market, with over 1,000 megawatts of projects in the current interconnection queue, as per the PUC report. However, the report highlights that some regions within the state might struggle to attract private investment in energy storage systems. In such cases, it may benefit ratepayers for Transmission and Distribution (T&D) Utilities to own the energy storage systems, a conditional argument for utility-owned storage under specific circumstances that benefit the public.
The challenge of attracting private investment underscores the importance of creating a supportive regulatory environment. Policymakers must balance encouraging competition with providing incentives for investment in underserved regions. This balance may involve a combination of policies, such as tax credits, grants, and streamlined permitting processes, to make it more attractive for private companies to invest in energy storage projects throughout the state.
Balancing Interests and Regulatory Framework
Maine’s evolving energy landscape has brought the critical issue of battery ownership to the forefront, a debate that has been under legislative and regulatory scrutiny for nearly two years. The core of the debate questions whether energy storage systems, such as batteries, reservoirs, or fuel cells, should be classified as “generation” or “distribution.” This classification significantly impacts whether utility companies, such as Central Maine Power (CMP) and Versant Power, should be allowed to own these storage systems. Currently, state law largely prohibits these utility companies from owning electricity generation plants, prompting a necessary dialogue about their potential involvement with energy storage. The classification decision is key because it will determine who can invest in and profit from the growing energy storage market. These decisions will shape Maine’s energy policy, influence utility company operations, and ultimately affect the state’s approach to sustainable energy solutions. The resolution of this matter is urgent, as it holds considerable implications for the future of energy infrastructure and regulation in Maine.
