OUR ESA

Oregon Utility Energy Storage Act

The Renewable Hydrogen Alliance  (RHA) is a trade association whose mission is to promote using renewable electricity to create clean fuels. We are on the front lines of fighting climate change, taking low cost wind and solar power to eliminate fossil fuels.

RHA submitted the Oregon Utility Renewable Energy Storage Act (OUR ESA) into the legislative process that would ensure Oregon can provide 100% fossil-free power. OUR ESA requires utilities to acquire energy storage facilities capable of providing power even when wind and solar are not available.

Washington Governor Jay Inslee signing RHA-promoted legislation in 2019 that led to the first utility-owned renewable hydrogen project in the US. [Ken Dragoon at far right in first row]

OUR ESA will launch Oregon as the country’s leader in demonstrating power grids can reliably supply power entirely from inexpensive wind and solar. It would require a modest capital investment by the utilities that we fully expect will return a net benefit to ratepayers.

You can help by writing, emailing, or calling your state representatives to let them know you support OUR ESA.

But it takes money to skillfully navigate the political process. RHA is asking for your support to hire a lobbyist to take this critical step in the fight against climate change. Please consider giving whatever you can to this project.

 

More About the Proposal

The Renewable Hydrogen Alliance proposes an Oregon bill that would require large investor-owned utilities in the state to obtain energy storage facilities capable of storing 5% of the annual production from their owned and purchased variable energy resources (wind and solar) by 2025, and increasing to 10% by 2030. The bill would allow all energy storage technologies to compete, but specifically including energy stored as heat and chemical fuels (e.g., hydrogen, ammonia, et al). The bill does not require the stored energy to be returned as electricity to the power grid.

 

Intent of the Bill

The intent of this bill is to enable the smooth and least-cost path to decarbonization by:

  • Ensuring that the long term energy storage needed to operate a 100% renewable electric grid is put in place and grows proportionately with the need by tying the amount of energy storage to the amount of wind and solar resources on the system.
  • Making more efficient use of rising super-surpluses of renewable electricity by leveraging them to useful purpose (e.g., heat and fuels) in decarbonizing the state’s energy economy.

 

The Problem

As the state moves toward relying on carbon-free energy it confronts several challenges:

  • The least cost sources of zero-carbon energy are wind and solar electric power whose variability is a challenge to grid operators- at times creating more energy than there is concurrent demand for, and at other times producing an insufficient amount of energy to meet demand.
  • Oregon’s carbon emissions come from three main categories: electric power generation, transportation, and natural gas consumption. Low-cost, low-carbon wind and solar directly reduce emissions from power generation, but the other categories have components that are difficult or expensive to directly electrify.

 

Solution

It is widely recognized that long term energy storage will be needed to power grids with 100% variable renewable electric power. This bill increases storage in proportion to the need by proportioning it to the amount of wind and solar on the power system.

The bill recognizes a broader range of storage technologies than were adopted in rule-making under the former 2015 energy storage mandate, HB 2193. By allowing electric energy to be stored and delivered back in the form of heat or fuels, the cost of storage on an energy basis (i.e., dollars per kilowatt-hour) is vastly reduced and the diversity of available technologies increased. This bill does not mandate that the stored energy return to the electric grid, although it is anticipated that at very high levels of reliance on renewable electricity, that will occur.

In the near term, allowing electricity to be stored and delivered in the form of heat and fuels leverages the increasing surpluses of renewable electricity to decarbonize sectors of the energy economy not easily or cheaply reached through direct electrification (e.g., industrial processes, heavy duty transportation, and aircraft fuels).

 

Economic Considerations

Oregon’s large investor owned utilities’ wind and solar fleets produce about 8 million MWh of energy each year, divided roughly equally between PGE and Pacific Power. The 5% energy storage requirement (if applied today) would require the ability to store about 450,000 MWh of energy.

Storing that amount of energy by creating hydrogen from electrolyzers (technology that extracts hydrogen from water using electricity) running 7,000 hours per year (assuming shut down when renewable are less available and power is inexpensive) would require about 90 MWs of electrolyzers. They would produce about 13 million kg of hydrogen[1]. The capital cost of the electrolyzers represents an investment of less than $180 million and the value of the annual hydrogen production in the range of $15-25 million.

The rough analysis above suggests that the investment in this type of energy storage may pay for itself. This is likely the case, especially considering the other values these storage technologies bring to the power grid. For example, Douglas County (WA) PUD has contracted for the purchase of a 5 MW electrolyzer on the basis of its expected net benefit to their ratepayers.

OUR ESA Process Status

As of September 18, 2020 the basic outline of the proposal had been submitted by Oregon State Senator Lew Frederick to the Oregon Office of Legislative Counsel to be worked into bill language. This is the very beginning of the legislative process and RHA is in talks with other interested parties: Northwest Natural, Portland General Electric, and Eugene Water & Electric Board about potential additions or changes to the proposed bill. We will need a bill sponsor and there is of course no guarantee that the legislation will emerge for a vote even. Public support is crucial to this process.

[1] Note that the produced hydrogen would a nominal energy content of the 450,000 MWh 2025 requirement. If the hydrogen were used to create electricity, it would return a smaller amount (in the range of 30% to 60%) back to the electric grid, depending on the efficiency of the conversion.