How Can The Utility-Startup Relationship Grow and Develop?

This year’s Energy Storage North America (ESNA) conference was considerably different than the event in years past. Not only was the crowd larger, more diverse, and more knowledgeable about energy storage opportunities, but it also included some surprising attendees: an unparalleled number of utility companies.

Ron Nichols, President of Southern California Edison, kicked off the conference as the keynote speaker. Beyond the symbolism of starting the conference with a utility perspective, Nichols’ speech was markedly authentic in its passion for energy storage. “We are nearing a tipping point in the way we are transforming energy,” he explained. “Five years ago, I would not have believed that we would run solicitations… in the timeframe we have.”

Although California’s energy storage mandate, emissions reductions goals, and renewable energy targets certainly encouraged this type of adoption, SCE is one of many companies (both in and outside California) that are going above and beyond a bottom-line interest in storage. Alectra Energy, TFC Utilities, and SDG&E are just a few of the other players around North America proactively breaking into the energy storage sector.

“Going back to traditional services is not going to cut it,” explained Neetika Sathe, Director for Emerging Technologies at Alectra. “We need to offer solutions that give the customer choices.”

This was a mantra heard throughout the conference. A number of the ESNA panels and workshops focused on the relationship between utilities and energy storage. While each one contributed a different perspective, there seemed to be resounding agreement that energy storage is the future of the grid, and there is ample room for involvement along the way.

Yet there is an elephant in the energy storage room, and it comes in the form of market diversity. While utilities have been running valuable pilots with newer startups, regulatory concerns and high proof-of-concept metrics create high entrance barriers in the space on a commercial scale. Large energy storage projects are primarily implemented by a few of the bigger companies, such as Tesla, stem, and AES, deepening the chasm between idealized options for energy storage and projects that are actually being implemented.

Although utilities recognize the need to partner with a diverse array of innovative developers, forging relationships between traditional energy providers and small-scale companies is still an uphill battle.

“Utility entrance into this space… should lead to fair and controlled access for everyone,” said Polly Shaw, VP of Regulatory Affairs and Communications at stem. Not only from an ethical perspective, but in order to create room for valuable, yet unprecedented, technologies to flourish. Sathe echoed this sentiment: “There’s a certain power in partnerships.”

Beginning this conversation at ESNA was extremely valuable for any new company looking into energy storage. The question now is just how to carve that path forward for smaller companies.

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