Developing a legal framework for energy storage technologies in the U.S: The case of pumped underground storage hydro

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Department of Social Sciences


The Energy Act of 2020 authorizes $1 billion over five years from 2021 to 2025 to support energy storage development in the United States. In addition, the Federal Energy Regulatory Commission (FERC) Orders 841 and 2222 opened the wholesale energy markets for distributed energy resources, including energy storage. The statute and orders pave the way for novel energy storage technologies to participate in electricity markets as the qualifying facilities, thereby expanding opportunities for energy storage development. However, the existing policy, legal, and regulatory regime, including these much-welcomed newcomers, fails to recognize and support the entire spectrum of benefits that some forms of energy storage create. In this paper, we focus on Pumped Underground Storage Hydro (PUSH), a variant of pumped hydro storage (PHS), which currently provides over 90% of the world's energy storage capacity. PUSH operates with the same principle as PHS; however, it is an entirely underground variant of PHS. In addition to becoming competitive in the wholesale electricity market, PUSH facilities can be developed as community infrastructure in the postindustrial landscape, particularly in abandoned underground mines. Given federal energy law and policy development, this paper identifies how communities with abandoned mines, technically feasible for PUSH facilities and operating as municipal-owned utilities or cooperatives, can participate and take advantage of federal legislation. We further look into the implications through the lens of technical, economic, and social aspects of energy justice. We consider energy justice as a conceptual framework that seeks to explain the occurrence of injustice within energy system decisions and outcomes and how policymakers can respond to these injustices. We use it as a conceptual tool for understanding policy formulation and detailing the energy system's missing ethical and justice dimension. We argue that as a technically mature technology, PUSH facilities can act as a potential means to speed up the energy transition in the United States. The federal and state law along with utility market structures are vital in shaping the potential opportunities and barriers for energy storage facilities like PUSH. We show that although it supports PUSH development, there are gaps in the current market structure, specifically in the regulatory framework, when seen through the lens of justice and valuation of just energy services. These gaps limit the realization of utility-scale energy storage technology's potential to fully contribute to a decarbonized energy system that is more resilient and more just than the incumbent system.

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Electricity Journal