Defining the Greatest Legal and Policy Obstacle to 'Energy Storage'

Abstract

With the increasing penetration of renewable energy generation into the transmission and distribution networks, the problem of managing growing volumes of variable generation needs to be addressed. Energy storage has the potential to help address this problem by storing commercially useful amounts of energy to be discharged as electricity when required. However, energy storage does not have a universally accepted legal definition because it is provided by so many different technologies, operates on different scales and provides a range of functions. This article argues that the lack of a consistent legal definition poses a challenge for legislators who are trying to pick “winners” to receive legislative support and subsidies or other financial incentives. The failure to support one emerging storage technology, while giving preference to another, will almost inevitably have a “chilling” effect on the research and development and any subsequent commercialisation of that technology. This article further argues that the choice of legal definition also affects the ability of multifunctional energy storage technologies to fully participate in an unbundled electricity market structure.

Keywords: energy storage, renewable energy, electricity, generation, regulation, energy, law, legislation, definitions, competition law, market structure, The Skinner Bill, California, Australia, Germany, United States, renewable energy technologies, energy storage technologies

JEL Classification: K10, K30, K32