Eric Hittinger, Rochester Institute of Technology Inês Azevedo, Carnegie Mellon University

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1 THE PARADOX OF "RENEWABLE ENERGY STORAGE": ECONOMICS AND EMISSIONS Eric Hittinger, Rochester Institute of Technology Inês Azevedo, Carnegie Mellon University 1

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3 Policy Makers are also thinking about Renewable Energy Storage In the US, Sen. Wyden and Collins introduced the Storage Technology for Renewable and Green Energy Act of 2013 (STORAGE) Act. The New Jersey Board of Public Utilities Office of Clean Energyproposed that some renewable energy funding be shifted from wind/solar to renewable energy storage. Germany has launched a subsidy program for energy storage linked to residential-level Solar PV

4 What is Renewable Energy Storage? My Definition: Any form of bulk energy storage used to time-shift renewable energy to more useful times of day. I m not addressing: Energy storage for other services (such as frequency regulation) The value of storage if you are transmission constrained 4

5 The problem with Renewable Energy Storage Energy storage has become increasingly associated with renewable energy Energy storage is perceived as a technology that can or does lead to lower emissions by the electricity sector But this way of thinking about energy storage is misleading 5

The operation of bulk energy storage has two effects that tend to increase emissions 1. Generally, dirty electricity replaces clean electricity.

6 The operation of bulk energy storage has two effects that tend to increase emissions 1. Generally, dirty electricity replaces clean electricity. Natural gas as marginal generator Coal as marginal generator Note: This effect still holds when you charge your storage from renewable energy sources 2. Storage is less than 100% efficient Image: 6

7 The Research Questions For different locations in the US, How does revenue from bulk energy storage change when it is limited to charging from renewable energy? What are the net emissions from the operation of bulk energy storage, with and without this limitation? 7

8 The Approach In each of 34 locations, assume a co-located wind farm and energy storage system 100 MW wind farm (Data from EWITS and WWD) 80 MWh of storage, 20 MW maximum charge/discharge, 75% round-trip efficiency Using hourly market clearing price data from local or nearest market, determine the revenue-maximizing operation of storage Both perfect and imperfect information With and without charging limited to wind energy Use marginal emission factors (MEFs) to determine the net emissions resulting from operating the storage 8

9 Locations 9

10 Under perfect information, storage is charging/discharging frequently, taking advantage of every price fluctuation Power Output (MW) Electricity Price ($/MWh) Electricity Prices Storage operation (perfect information, charging from the grid) Time (Days) 10

11 Without knowledge of future energy prices, storage is more conservative and operates less frequently Power Output (MW) Electricity Price ($/MWh) Electricity Prices Storage operation (imperfect information, charging from the grid) Time (Days) 11

12 When storage is also constrained to charge only from wind energy, this further limits its ability to cycle Power Output (MW) Electricity Price ($/MWh) Electricity Prices Storage operation (imperfect information, charging from wind) Time (Days) 12

13 Bulk energy storage revenue varies significantly $1M/yr $2M/yr $3M/yr Scenario: perfect information, charging from the grid Given Perfect Information about future electricity prices, storage earns an average of 90% more revenue (range: 60% to 150%) When constrained to charge from wind energy, storage earns an average of 8% less revenue (range: 1% to 22%) 13

14 Emissions effects are calculated using Marginal Emissions Factors For 1400 plants: location, fuel type, stack height and hourly emissionsof CO 2, SO 2, NO x, PM 2.5 Data from: CEMS ( ), egrid (2009), NEI (2005) 14

15 Example: Temporal trends SERC (South) Source: Siler-Evans, Azevedo, Morgan,

16 Net CO 2 emissions due to storage are significant Scenario: perfect information, charging from the grid 150 kg/mwh 200 kg/mwh 250 kg/mwh 300 kg/mwh 5000 tonnes/yr 7500 tonnes/yr tonnes/yr12500 tonnes/yr Average US coal plant emissions: 950 kg CO 2 /MWh Average US natural gas plant emissions: 500 kg CO 2 /MWh Emissions Reference: Jaramillo et al, Comparative Life-Cycle Air Emissions of Coal, Domestic Natural Gas, LNG, and SNG 16 for Electricity Generation, Environ. Sci. Technol. 2007, 41,

17 Net NOx emissions from storage vary widely, but are generally small or negative 0 kg/mw h 0.25 kg/mw h 0.5 kg/mwh Scenario: perfect information, charging from the grid 0 tonnes/yr 5 tonnes/yr 10 tonnes/yr 15 tonnes/yr Average US coal plant emissions: 2.5 kg NOx/MWh Average US natural gas plant emissions: 1.2 kg NOx/MWh Emissions Reference: Jaramillo et al, Comparative Life-Cycle Air Emissions of Coal, Domestic Natural Gas, LNG, and SNG 17 for Electricity Generation, Environ. Sci. Technol. 2007, 41,

18 Net SO 2 emissions from storage vary over an order of magnitude and can be quite large Scenario: perfect information, charging from the grid 0 kg/mwh 0.5 kg/mw h 1 kg/mwh 1.5 kg/mw h 2 kg/mwh 0 tonnes/yr 25 tonnes/yr 50 tonnes/yr 75 tonnes/yr Average US coal plant emissions: 6 kg SO 2 /MWh Average US natural gas plant emissions: 0.25 kg SO 2 /MWh Emissions Reference: Jaramillo et al, Comparative Life-Cycle Air Emissions of Coal, Domestic Natural Gas, LNG, and SNG 18 for Electricity Generation, Environ. Sci. Technol. 2007, 41,

19 Specific conclusions: Limiting bulk energy storage to charging from renewable energy is inefficient, reducing potential revenue by 5-10%. Regardless of the source of energy, bulk energy storage has significant emissions, varying by location General conclusions: Energy storage is not a green technology: Whether bulk storage is used to maximize revenue or shift energy to higher demand hours, system emissions are increased. Energy storage is not a renewable energy technology: Rather, it is used to improve operational and economic efficiency, regardless of the root cause. 19

20 $1M/yr $2M/yr $3M/yr 150 kg/mwh 200 kg/mw h 250 kg/mwh 300 kg/mw h 5000 tonnes/yr 7500 tonnes/yr tonnes/yr12500 tonnes/yr 0 kg/mw h 0 tonnes/yr 0.25 kg/mwh 5 tonnes/yr 10 tonnes/yr 0.5 kg/mwh 15 tonnes/yr 0 kg/mwh 0.5 kg/mw h 0 tonnes/yr Questions! 1 kg/mwh 1.5 kg/mw h 25 tonnes/yr 50 tonnes/yr 2 kg/mwh 75 tonnes/yr 20

21 MEF Example Marginal Fuels, : MRO Region (Midwest) Source: Siler-Evans, Azevedo, Morgan,

22 The scenarios/locations that result in the most revenue tend to produce the greatest emissions 12 x 106 CO2 Emissions (kg / yr) Im. Info. / No Wind Limit Perfect Info. / No Wind Limit 2 Im. Info. / Wind Charging Perfect Info. / Wind Charging Revenue ($M / yr) x

A framework for climate change decisionmaking under uncertainty

A framework for climate change decisionmaking under uncertainty Ines Azevedo Associate Professor Department of Engineering and Public Policy Carnegie Mellon University Co-Director Climate and Energy Decision