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TRANSCRIPT
What’s Driving Energy Storage
Deployment in the United States?
Presentation to MassCEC and DOER Workshop- October 30, 2015
Cedric Christensen, Strategen Consulting
Jacqueline De Rosa, Customized Energy Solutions
Rahul Walawalkar, Customized Energy Solutions
Electro-Chemical
(Flow battery / Lithium Ion )
Mechanical
(Flywheel)
Bulk Mechanical
(Compressed Air)
Thermal
(Ice / Molten Salt)
Bulk Gravitational
(Pumped Hydro)
Transportation
(Electric Vehicles)
Energy Storage: Diverse Asset Class
Customer
ISO / RTO
Utility
Value Proposition
Use Cases
Technology
Finance / Costs
Interconnection
Configurations
Metering
NEED SOLUTION
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Transforming global energy use to create a clean, prosperous, and
secure low-carbon future.
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Source: http://www.rmi.org/electricity_battery_value
Grid Connected Storage Use Cases
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DescriptionTransmission
SitedDistribution
SitedCustomer
Sited
1. Transmission BenefitsStorage dispatched to reduce transmission load
2. Capacity BenefitsStorage dispatched to provide peak and/or flexible capacity
3. Generator SupportStorage adding to the value of renewable or fossil generators
4. Regulation OnlyStorage providing frequency regulation only
5. Distribution BenefitsStorage dispatched to reduce distribution load
6. Retail BenefitsStorage dispatched for retail tariff benefits
» In addition, all of the above forms of storage except for #3 can theoretically be dispatched during off hours to provide services such as Frequency Regulation, Spinning Reserve, or Energy.
» Rules are not in place to provide full value for all cases in all regions.
Example of attractive ISO/RTO markets for DERs
Western Texas Eastern
Opportunity CAISO ERCOT PJM NYISO ISO-NE MISO SPP
Peak Load 45 GW 70 GW 162 GW 34 GW 27 GW 127 GW 47 GW
Retail Bill Management(Demand and Energy) ◕ ◔ ◑ ◑ ◑ ◔ ◔
Incentive Programs ◕ ○ ◔ ◑ ◑ ◔ ○
Energy Arbitrage ◑ ◕ ◑ ◑ ◑ ◔ ◔Ancillary Service Market Participation ◔ ◑ ◑ ◔ ◔ ◔ ○Capacity MarketParticipation ◑ ○ ◕ ◑ ◑ ◔ ○Growth / Enhanced Value from Regulatory Reforms ◕ ◔ ◔ ◕ ◕ ◔ ○
OVERALL ◕ ◑ ◑ ◑ ◑ ◔ ○
OPPORTUNITY LEVEL: LOW HIGH○ ◔ ◑ ◕
Benefit-to-Cost Ratio Ranges by Modeled Use Case
For each case, a benefit-to-cost (B/C) ratio will be generated to show the direct, quantifiable fixed and variable costs and benefits, incorporating the time value of money, for the modeled project over its lifetime.
A benefit to cost ratio greater than one means that the modeled benefits exceed the project costs; in other words, the net present value (NPV) was greater than
zero
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Utility PartnersScheduling CoordinatorsSoftware / Analytics
Network Management Energy Services Providers (includes O&M)
Many Players & Business Models in the DER Ecosystem
New Players are Moving In
Advanced TransportationStationary Storage Developer
Traditional Power
Systems integrator
ICT – Analysis / Prediction
New Energy EcosystemICT x Energy
#brightbluebox ?
The California Example
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» OTC and SONGS retirement▪ 6,209 MW of Retiring OTC Capacity by 2024
» AB 2514▪ 1,325 MW procured by 2020
» Long Term Procurement Planning ▪ SCE (50 – 600MW)▪ SDG&E (25 – 200MW)
» CAISO Reforms to Wholesale Market▪ Market design updates specific to storage▪ Storage being considered in transmission planning process▪ Updates to interconnection process
» SGIP - $83M/year through 2020
» Net Energy Metering / Rate Design
Seller Resource TypeTotal
ContractsMax Quantity
(LCR MW)
Selected Energy Storage Resources
AES Centralized Battery Storage 1 100.0
Advanced Microgrid Solutions
Customer Sited Battery Storage 4 50.0
Ice Energy Customer Sited Thermal Storage 16 25.6
NRG Energy Customer Sited Battery Storage 1 0.5
Stem Customer Sited Battery Storage 5 85.0
Total 27 261.1
Source: SCE RFO winners. https://www.sce.com/wps/portal/home/procurement/solicit1n/lcr
Southern California Edison chose to procure over 5x the amount of energy storage than required by the CPUC to meet Local Capacity Requirements (LCR)
» 50 MW of energy storage required. 261 MW Procured
» Over 1,800 offers of all resource types competing
From Centralized to Distributed RA
Customer Sited Storage can Provide Grid Services
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• Distributed Energy Resources (DER)
• Can provide several grid benefits:
• Distribution Capacity
• Steady-state Voltage
• Power Quality
• Reliability and Resilience
• Demand Side Management (DSM)
• Energy Efficiency (EE)
• Demand Response (DR)
• New York – Reforming the Energy Vision (NY REV)
• Push for cleaner, more resilient, and cheaper electric system
• Con Edison proposed a combination of customer side Demand Management ($200 million) and moderate substation upgrades ($300 million) to avoid a $1 billion new substation
• Program would shed 52 MW from specific areas by 2018
• The majority of the area’s load is comprised of residential buildings and small commercial loads – i.e. no large industrial load reduction targets
• Demand side management could include energy storage in residential buildings
Brooklyn-Queens Initiative
Energy Storage Applications
Generation
• Energy Arbitrage
• Ancillary Services
– Frequency Regulation
– Spinning Reserves
– Supplemental Reserves
– *NEW* Ramping
• Capacity
– Reliability
– System, Local, Flexible
• Reliability– Voltage
Support/Reactive Power
– Black Start
– Frequency Response
Transmission & Distribution
• Upgrade deferral
– Reduce circuit and line overload
• Grid resiliency
– Outage mitigation
– Back-up power
• Voltage support/power quality
• Congestion relief
End-users
• Reduce Demand Charges
• Optimize Retail Rates
• Power Quality/UPS
• Onsite renewables
• Demand Response
ISO/RTO Markets focus on Energy, Capacity, Ancillary Services, Demand Response, Transmission
Potential Value Streams» In Front of the Meter
• Energy Marketo And possibly ramping
• Ancillary Services o Operating Reserves, Regulation, Frequency, Reactive Power, Black
Start
• Capacity Market
» Behind the Meter:
• Wholesale DRo In addition to Arbitrage, Demand Charge Savings, State/Federal
Incentives
• Capacity Market
» Transmission and Distribution
• FERC Order 890
– Participation by non-generator resources in the RTO/ISO Ancillary Services markets, including Regulation.
– Preventing Undue Discrimination and Preference in Transmission Service
• FERC Orders 719 and 745– Improve DR in the wholesale power markets
• FERC Order 755– Pay for Performance Regulation
• FERC Order 784 – Third-party provision of ancillary services and the accounting and financial reporting
for new electric storage facilities”
FERC Orders
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20
1
14.5
Energy Storage in the Wholesale Markets
PJM ERCOT NYISO MISO CAISO
PJM: Frequency Regulation, ERCOT: Fast Response, CAISO: Regulation, MISO: Regulation, NYISO Frequency Regulation
• Additional Ancillary Services and Compensation:
– Frequency Response• FERC ORDER 794
– Approves NERC BAL-003
• FERC NOPR: Frequency Response Market Based Product NOPR
– Reactive Power• FERC Docket AD14-7
FERC Orders Continued
Areas that are Developing
• Interconnection Rules
– Exporting and Non-Exporting
• RTO/ISO Aggregation Rules
– In front of the Meter and Behind the Meter
– Minimum Size Requirements
• Demand Response Rules
– Measure and compensate Behind the Meter Storage Participating In
Wholesale Market
• State of Charge (SOC) Management and Dispatch Signal
• Metering and Telemetry Requirements/Costs
• Quantify Transmission and Distribution Deferral Benefits,
Transparency
• Capacity Market (Resource Adequacy) Rules/Compensation
Dynapower's manufacturing facility in Vermont
features a 100 KW wind turbine, 101 KW roof
mounted photovoltaic and an on-site energy
management & storage system. Currently in
operation.
Beacon Power 20 MW Flywheel Frequency
Regulation Plant (Hazle Township, PA). In
Operations since June 2014.
Goldman Sachs Manhattan Headquarters, NY . Tanks for ice
thermal storage used to reduce high demand charges during
summer peak. Chilled anti-freeze runs through pipes
connected to the 11-ton vessels during nights to use cheap
power to freeze water. That ice is used the next day in its air-
conditioning system. In operations since 2010.
1 MW , 3.2 MWh UET Vanadium Flow Battery,
Avista Utilities in Washington state. Used for load
shifting, frequency regulation, and conservation
voltage regulation on the Turner distribution
circuit. In operations since June 2015
PG&E’s Vaca-Dixon Substation, Vacaville, CA.
2-MW / 14 MWh Na-S battery used for load
shaping, renewables (PV) integration, and
ancillary services. In operations since 2012.