SMUD Rejects Storage Procurement Targets

11 Sep 2014

In response to a staff analysis finding energy storage costly, the Sacramento Municipal Utility District decided against setting a storage procurement target, something the muni was mandated to do by state legislation.

SMUD’s board voted unanimously Sept. 4 to not establish energy storage procurement targets.

“Data from the demonstrations show that distributed storage technologies are considerably more costly than bulk storage or conventional gas turbines,” board member Howard Posner said. “SMUD staff said it does not expect to see distributed generation storage be a cost-effective option within the next 10 years.”

State law requires that the governing board of each publicly owned electric utility initiate a process to determine whether to adopt energy storage procurement targets to be achieved by the end of 2016 and the end of 2021.

Posner said the muni will re-evaluate its decision within the next three years. In the meantime, it plans to continue investing in demonstrations and pilots and continue exploring the potential development of its Iowa Hill pumped hydro project.

In March 2012, SMUD launched a process where the muni would consider energy storage as part of its integrated resource planning process. SMUD’s research and development group conducted several pilot projects, with each designed to test the viability and cost-effectiveness of energy storage.

The pilots included:

• A photovoltaic and smart grid pilot in the Anatolia solar smart homes community;

• A feed-in tariff for PV and storage demonstration in South Sacramento County;

• A residential energy smart community demonstration in mid-town Sacramento; and

• A solar charging station near SMUD’s headquarters building.

Also during the meeting, SMUD General Manager Arlen Orchard said the muni has applied to amend the license for its Upper American River Project, which just received a 50-year relicensing in July. The change would allow SMUD to build a 2.7 MW powerhouse and a special water release valve near Slab Creek Dam, Orchard said.

Upper American River is a 688 MW hydroelectric project consisting of 11 reservoirs and eight powerhouses spanning an area from the crest of the Sierra Nevada mountains to the foothill communities of the Sacramento valley. It provides about 15 percent of SMUD's customers' yearly power needs.

The valve is necessary for SMUD to meet the new license’s conditions, Orchard said. It calls for higher volumes of water to be released downstream. Electricity generated at the new powerhouse is expected to help SMUD meet its goal of 33 percent renewable energy by 2020. Hydro power qualifies as a renewable resource as long as the capacity doesn’t exceed 30 MW.

The new facilities are to be built a quarter-mile downstream from Slab Creek Dam outside the town of Camino. The cost is to be covered by a $1.5 million grant from the U.S. Department of Energy.

“We’re hopeful that [the Federal Energy Regulatory Commission] will approve the license amendment by next summer and if they do, the plan would be to begin construction in 2016,” Orchard said.

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