Statements on Introduced Bills and Joint Resolutions

Floor Speech

Mr. WYDEN. Mr. President, today I am being joined by my colleagues Senators COLLINS, MERKLEY, and KING on the introduction of the Storage Technology for Renewable and Green Energy Act of 2013 or the STORAGE 2013 Act. The purpose of the bill is to promote the deployment of energy storage technologies to make the electric grid operate more efficiently and help manage intermittent renewable energy generation from wind, solar, and other sources that vary with the time of day and the weather.

Traditionally, peak demand has been met by building more generation and transmission facilities, many of which sit idle much of the time. The Electric Power Research Institute's White Paper on storage technology observed that 25 percent of the equipment and capacity of the U.S. electric distribution system and 10 percent of the generation and transmission system is needed less than 400 hours a year. Peak generation is also often met with the least efficient, most costly power plants. Energy storage systems offer an alternative to simply building more generation and transmission to meet peak demand because they allow the current system to meet peak demands by storing less expensive off-peak power, from the most cost-efficient plants, for use during peak demand.

The growth of renewable energy from wind and solar and other intermittent renewable sources, like wave and tidal energy, raises yet another challenge for the electric grid that storage can help address. These renewable sources deliver power at times of the day or night when they might not be needed or fluctuate with the weather. Energy storage technology allows these intermittent sources to store power as it is generated and allow it to be dispatched when it is most needed and in a predictable, steady of stream of electricity no longer at the vagaries of weather conditions. And equally important, it allows this intermittent generation to more closely match demand. Instead of trying to find a place to sell power at 3:00 am in the morning when demand is down, wind farms for example would be able to sell their power at 3:00 pm in the afternoon when demand is up.

The STORAGE 2013 Act is substantially similar to the STORAGE Act of 2011 I introduced last Congress. It offers investment tax credits for three categories of energy storage facilities that temporarily store energy for delivery or use at a later time. The bill is technology neutral and does not pick storage technology ``winners'' and ``losers'' either in terms of the storage technology that is used or in terms of the source of the energy that is stored. The electricity can come from a wind farm or it can come for a coal or nuclear plant. Pumped hydro, compressed air, batteries, flywheels, and thermal storage are all eligible technologies as are smart-grid enabled plug-in electric vehicles.

First, the STORAGE 2013 Act provides a 20 percent investment tax credit of up to $40 million per project for storage systems connected to the electric grid and distribution system. A total of $1.5 billion in these investment credits are available for these grid connected systems. Developers would have to apply to the Treasury Department and DOE for the credits, similar to the process used for the green energy manufacturing credits the ``48C'' program. This is a 20 percent credit so that means the actual cost of the project that would be eligible for the full credit would be $200 million.

The act also provides a 30 percent investment tax credit of up to $1 million per project to businesses for on-site storage, such as an ice-storage facility in on office building, where ice is made at night using low-cost, off-peak power and then used to help air-condition the building luring the day while reducing peak demand. This is a 30 percent credit so the cost of the actual projects that would get the full credit amount would be around $3.3 million.

One change from last year's version of the bill is that the minimum size for storage systems to be eligible for this credit is now 5 kWh, whereas it was 20 kWh before. 20 kWh is a reasonable size or industrial energy consumers and big-box stores, but a 5 kWh limit is a size that makes sense for small businesses. This change will allow small businesses to participate in pioneering storage on the grid, and will incentivize storage companies to create leasing models for residential users. Leasing models are proving very successful at increasing grid-connected residential solar, and this credit will open up a whole new market for storage to follow suit.

But if homeowners want to install storage on their own, they will be able to. The Act also provides for 30 percent tax credit for homeowners for on-site storage projects to store off-peak electricity from solar panels or from the grid for later use during peak hours.

As the EPRI white paper noted "(d)espite the large anticipated need for energy storage solutions within the electric enterprise, very few grid-integrated storage installations are in actual operation in the United States today.'' The purpose of the STORAGE 2013 Act is to help jump start the deployment of these storage solutions so that renewable energy technologies can increase their economic value to the electric grid while reducing their power integration costs as well as to improve the overall efficiency of the electrical system.

I urge my colleagues to take a closer look at what storage technologies can do to help reduce the cost of electricity and improve the performance of the electric grid and renewable energy technologies. If they do, I am confident my colleagues will join Senators COLLINS, MERKLEY, and KING in supporting this bipartisan legislation.

Mr. President, I ask unanimous consent that the text of the bill be printed in the RECORD.

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