Do Mandates Deliver Cost Reductions for Energy Storage?
In 2013, California implemented a mandate directing the state’s investor-owned utilities to procure 1325 MW of energy storage, to help integrate nondispatchable renewable sources of energy and assist the state in meeting its environmental goals. This paper evaluates this policy’s impact of both battery deployment, and cost, finding that as of 2019, the state was effective in spurring nearly 500 MWh of battery storage deployment over what would have been installed in absence of the policy. This additive deployment would have the effect of reducing global battery cell costs by roughly $1.00/ kWh, based on learning by doing. To support these findings, we utilize both a difference in differences estimation, and a synthetic control analysis, both of which allow us to compare battery deployment in California, to deployment in other states. To pair deployment to cost reduction, we use a learning curve analysis, which links battery shipments to cell and storage block costs. For policymakers, these results provide evidence to the effectiveness of mandates in promoting storage deployment and help explain how these policies can induce downstream effects.