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Oncor Aiming To Invest $5.2 Billion Into Energy Storage — Will It Be Allowed?

By: James Ayre |

The Texas-based utility company Oncor is looking to invest several billion dollars (at least) into energy storage systems to back up its transmission and distribution network, as per recent reports. But will the company be granted approval for such a stupendous and potentially industry-changing move?

To be specific — Oncor will reportedly be seeking state regulatory approval for up to $5.2 billion in grid-connected batteries. These batteries, which would range greatly in size, would be spread out across the utility’s service territory, not concentrated in one or two locations. If approved, deployment will begin in 2018.

There may, of course, be pushback against the approval of the plan from the power generation utilities in Texas — as they currently “hold privileges in supplying energy and power to the state’s grid under Texas’ competitive energy regime,” as Greentech Media notes.

Much of the reason for Oncor’s bet on batteries is reportedly down to the fact that battery prices are expected to fall significantly over the next few years — thereby being a cheaper means of ensuring grid stability, and lowering the occurrence of power outages, rather than larger-scale renovations of the state’s infrastructure. Supposedly, this would allow for the lowering of electric bills (we’ll have to wait and see on that count, of course…).

Greentech Media provides more:

Oncor hired the Brattle Group to analyze the impact of $5.2 billion invested in distributed, utility-controlled batteries. The Boston-based consulting group reported that ERCOT could see positive impacts from up to 5 GW of “grid-integrated, distributed electricity storage,” based on the presumption that battery prices will fall to $350 per kW-hour, about half the cost of the cheapest lithium-ion batteries available today. At those prices, Oncor’s distributed storage fleet could drive average Texas residential power bills down by 34 cents to $179.66 a month, according to the report.

Oncor’s plan represents one of the biggest potential energy storage procurement opportunities in the country — if it actually comes to pass. As noted in the Dallas Morning News piece, Oncor will almost certainly face formidable opposition from state legislators and energy regulators.

Very interesting — yet another major move being made in the battery industry. Yet another reason that the next few years should prove interesting.

A final note: Oncor is reportedly in talks with Tesla (and a number of other manufacturers) about the sourcing batteries.