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A rendering of Cross Town Energy Storage project under construction in Gorham. Battery storage systems will be key to the renewable energy transition. Who will own them — and profit from them — is still in question. Plus Power rendering

Battery ownership question remains unresolved

Nearly two years after the Legislature began debating whether storing energy — in batteries, or reservoirs, or fuel cells — should be considered generation or distribution and whether utility companies should be allowed to have an ownership stake in it, the question remains unresolved.

In a report released last March, the Public Utilities Commission, which the Legislature tasked with studying the question, wrote that it planned to keep looking into it and would work on guidelines spelling out when and if it is appropriate for utility companies to own or control energy storage systems. The guidelines would likely deal with projects on a “case-by-case basis.”

In an email on Friday morning, PUC spokesperson Susan Faloon said “the Commission is still reviewing the report and studying the issue to determine next steps.”

The answer will have big implications for utility companies like Central Maine Power and Versant, who, under state law, are mostly prohibited from owning plants that generate electricity. 

Utility companies (CMP and Versant) used to own both the means to generate electricity (like hydroelectric, coal, nuclear and natural gas plants) and the poles and wires that brought that electricity to homes and businesses. 

That changed in the 1990s, when the legislature forced companies to sell their generating assets and forbade them from acquiring new ones, separating the “generation” of electricity from its “transmission and distribution.” (Need a refresher on the difference between generation and distribution of electricity in Maine? Check out this piece from 2023.)

Both CMP and Versant have argued that energy storage should not be considered generation, and that they should therefore be able to own and control such projects.

“Battery storage has a number of potential use cases and benefits, and Versant Power believes that a number of different stakeholders can and should benefit from owning and operating battery storage,” said Versant spokesperson Judy Long in an email. 

“Control of energy storage will be important to maintain stability and reliability of the grid, especially as we add more distributed generation sources. We also see potential opportunities to improve reliability and reduce constraints.”

The ability to store energy will be essential for a grid that relies on renewables like wind and solar, which generate electricity intermittently and not always at times that align with when people are using the most electricity, like at night and during the winter.

Maine is one of just a handful of states with energy storage targets. In recommendations released late last month, the Governor’s Energy Office reported that companies have installed 6 projects totaling 63 megawatts of utility-scale energy storage in the state. That’s about 16% of the way toward the goal of 400 megawatts installed by 2030.

Most of the projects installed to date are relatively small – all under 21 megawatts – and are shorter duration, meaning they can generate power for between four and six hours. 

But several larger projects are in the works, including a 175-megawatt project in Gorham developed by Texas-based Plus Power that will be a resource for Maine and New England. And in August, Maine officials announced that a former paper mill in Lincoln would be redeveloped to house the world’s largest long-duration energy storage system, an 85-megawatt facility with the ability to discharge energy for up to 100 hours over four days, enough to power between 64,000 and 85,000 homes.

Until recently, most of the energy storage in the United States took the form of hydroelectric pumped storage, typically connected to large, conventional dams. The system is fairly intuitive: excess electricity is used to pump water from a reservoir at the bottom of a hill up to a reservoir at the top. When electricity demand spikes, water is released from the top reservoir and sent through a turbine, generating electricity.

Most of the new storage systems in the United States rely on lithium-ion batteries, although pumped storage has also enjoyed somewhat of a renaissance globally, particularly in Europe, China and Australia, as a way to store lots of energy for long periods of time. Some of the projects are connected to conventional dams, particularly in Africa and China, but others, particularly in Europe, are not.

Maine will likely be able to meet its short-term energy storage goals via the competitive market, with more than 1,000 megawatts in the current interconnection queue, according to the March PUC report. 

But some parts of the state may have trouble attracting private investment for energy storage systems, concluded the authors of the report, in which case “There may be limited circumstances where it benefits ratepayers for T&D Utilities to own energy storage systems.”

This episode of the Odd Lots podcast from Bloomberg on how electricity rates are actually set.

While The Maine Monitor does not place its content behind paywalls, some newsrooms we link to in this newsletter may. 

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