An EPRI perspective on the future of Distributed Energy Storage. by Barry MacColl, Electric Power Research Institute - International

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1 An EPRI perspective on the future of Distributed Energy Storage by Barry MacColl, Electric Power Research Institute - International

Nonprofit Chartered to serve the public benefit Collaborative Bring together

2 Three Key Aspects of EPRI Independent Objective, scientifically based results address reliability, efficiency, affordability, health, safety and the environment Nonprofit Chartered to serve the public benefit Collaborative Bring together scientists, engineers, academic researchers, industry experts Independent Collaborative Nonprofit 2

3 Our Members 450+ participants in more than 30 countries EPRI members generate approximately 90% of the electricity in the United States International funding of over 25% of EPRI s research, development and demonstrations 3

4 International EPRI R&D Collaboration NORTH AMERICA Canada Mexico EUROPE Belgium Czech Republic Finland France Germany Greece Hungary Ireland Italy Netherlands Norway Scotland Slovakia Slovenia Spain Sweden Switzerland United Kingdom Middle East UAE Saudi Arabia ASIA Japan India Malaysia People s Republic of China R.O.C. Taiwan South Korea SOUTH AMERICA Argentina Brazil AFRICA South Africa AUSTRALIA Australia New Zealand Over 25% of EPRI Collaboration Membership is International 4

Storage Changes Supply Chains Refrigeration transformed food supply by allowing preservation of a highly perishable product Changed delivery mechanisms E.g. No more milk man Created new supply and demand patterns E.

5 Storage Changes Supply Chains Refrigeration transformed food supply by allowing preservation of a highly perishable product Changed delivery mechanisms E.g. No more milk man Created new supply and demand patterns E.g. Winter produce from Chile Energy storage may similarly transform when and where electricity is produced, transmitted, and used GE Monitor-Top refrigerator, c Picture rom digital collection of Mike Manning, retrieved 31 Oct 2013 from

The Drivers for a Storage Transformation Policy and Regulatory

and targets Q $ Economic Transformation Rapidly declining costs

environmental awareness Desire for reliability and resiliency

6 The Drivers for a Storage Transformation Policy and Regulatory Shifts Regulatory evolution to accommodate storage Policy incentives and targets Q $ Economic Transformation Rapidly declining costs Monetization through markets and tariffs Societal Change Increased environmental awareness Desire for reliability and resiliency Technological Advancement New storage technologies Maturing product and understanding 6

7 Are we reaching the Tipping Point for Storage? Massive investment in lithium ion battery manufacturing has caused the cost of the technology to plummet over the last two years Installed costs less than $500/kWh reported for 2016 EPRI estimates have been $350 - $500/kWh by 2020 Prices have reached a very interesting level Still too high for classical storage applications such as load leveling But applicable in niche applications such as peak shaving for asset deferral, and peaker replacement 7

No Integrated Inverter Installed Cost: ~$950/kW per hour of storage Tesla PowerWall 2 Announced October

8 Residential Storage: The Difference a Year Makes 2x Energy 2x Power 60% less space Tesla PowerWall Announced April 30, 2015 Power: 2 kw Energy Capacity: 6.4 kwh Weight: 214 lbs. No Integrated Inverter Installed Cost: ~$950/kW per hour of storage Tesla PowerWall 2 Announced October 28, 2016 Power: 5 kw Energy Capacity: 13.5 kwh Weight: 264 lbs. Fully Integrated Inverter Installed Cost: ~$580/kW per hour of storage 8

Source: Solar City Solar + Storage: The Difference a Year Makes September 2015: Kauai Island Utility Cooperative signs a Power Purchase Agreement with Solar City/Tesla 17 MW solar array + 52 MWh

9 Source: Solar City Solar + Storage: The Difference a Year Makes September 2015: Kauai Island Utility Cooperative signs a Power Purchase Agreement with Solar City/Tesla 17 MW solar array + 52 MWh battery 13.9 cents / kwh under 20 year PPA January 2017: Kauai Island Utility Cooperative signs a PPA with AES 28 MW solar array MWh battery 11 cents / kwh under PPA (unspecified period) May 2017: Tucson Electric Power signs PPA with NextEra 100MW solar + 30MW / 120MWh battery 4.5 cents / kwh over 20 year PPA 9

Aliso Canyon: Less than a year from inception to installation Aliso Canyon (California): Gas

to be installed to replace gas peakers by the end of 2016 Several large-scale battery systems

(SCE) 2 MW / 8 MWh Powin Energy system at Irvine (SCE) 30 MW / 120 MWh AES Energy Storage at

5 MW / 30 MWh AES Energy Storage at El Cajon (SDG&E) Other systems to come Systems were

10 Aliso Canyon: Less than a year from inception to installation Aliso Canyon (California): Gas storage plant issues pushed California Public Utilities Commission to call for energy storage to be installed to replace gas peakers by the end of 2016 Several large-scale battery systems installed 20 MW / 80 MWh AltaGas Pomona Energy (SCE) 20 MW / 80 MWh Tesla Energy at Mira Loma (SCE) 2 MW / 8 MWh Powin Energy system at Irvine (SCE) 30 MW / 120 MWh AES Energy Storage at Escondido (SDG&E) 7.5 MW / 30 MWh AES Energy Storage at El Cajon (SDG&E) Other systems to come Systems were installed at breakneck speed RFO / RFP issued in June 2016 Awards / CPUC Approval in September 2016 Several systems online by December 31 st, 2016 Final commissioning Jan/Feb

11 Has energy storage arrived? Aliso Canyon shows that lithium ion batteries can be attractive as peaker replacements years before expected Special conditions (reduced availability of gas) make energy storage the preferred choice even though prices may be somewhat higher than gas turbines ($2000/kW) By 2020, storage at $1400/kW for 4 hours may be directly competitive with natural gas turbines in some locations But technology maturity is more than just cost! Does storage have a track record of safety, reliability and predictable performance? How are we using the storage, and what is the business model? How do we incorporate storage into grid planning and operating practice? 11

Gaps to Energy Storage Implementation Real-world performance data 12 Testing and evaluation

Understanding the value of storage Learning how storage can be used to improve grid design

adaptation to new technology availability Developing best practices for design, deployment,

12 Gaps to Energy Storage Implementation Real-world performance data 12 Testing and evaluation in lab and field settings Collecting data from deployments to build track record Understanding the value of storage Learning how storage can be used to improve grid design and operation Getting the most value out of an energy storage deployment Organizational adaptation to new technology availability Developing best practices for design, deployment, integration, operation, and disposal Incorporating storage into existing planning and operations procedures

Building a Utility Energy Storage Deployment Program:

TESTING AND DATA Get the Data Specify relevant data to

Performance/reliability track record MODELING Analyze the

optimal location Design for optimal lifecycle value

13 Building a Utility Energy Storage Deployment Program: Pillars to Support Transition from R&D to Operations TESTING AND DATA Get the Data Specify relevant data to safety, reliability, value Consistent comparison Performance/reliability track record MODELING Analyze the Options Identify and screen opportunities Feasible and optimal location Design for optimal lifecycle value IMPLEMENTATION Put into Practice Guidelines for deployment Customized tools Technical training 13

Electricity inventory for reserves PQ: Maintain voltage and power quality How can we dispatch storage to optimize these

14 Understanding the Value of Storage What are the potential benefits of energy storage? Capacity: Peaker replacement or non-wires alternative Flexibility: System ramping, renewable variability Reliability: Electricity inventory for reserves PQ: Maintain voltage and power quality How can we dispatch storage to optimize these benefits? How do benefits stack and do they justify the costs? What benefits are easily monetizable? The industry is developing analysis methodologies and tools to support these studies 14

StorageVET : Publicly-accessible storage valuation tool Goal: support common understanding of storage value between stakeholders Consistently analyze storage across range of uses,

15 StorageVET : Publicly-accessible storage valuation tool Goal: support common understanding of storage value between stakeholders Consistently analyze storage across range of uses, technologies, locations Ongoing collaborative effort to apply and refine tool through open forum - EPRI Energy Storage Integration Council (ESIC) More info at 15

Energy Storage Integration Council (ESIC)

set of evolving publicly available guidelines

technical staff from utilities, developers,

16 Energy Storage Integration Council (ESIC) Mission To advance the integration of energy storage systems through open, technical collaboration Develop and publish a robust set of evolving publicly available guidelines and tools in collaboration with ~1000 technical staff from utilities, developers, and research organizations Guided by Public Benefit Vision Practical Needs for Real Deployment More info on products and enrollment at 16

suppliers and research community Identify Gaps Publication and application Define Work Needed

17 Energy Storage Integration Council (ESIC) Develop energy storage integration guidelines and tools through industry collaboration Started in 2013, 700 participants from utilities, suppliers and research community Identify Gaps Publication and application Define Work Needed Published products at ESIC website: Working group review Collaborative development 17

18 ESIC Products Published to Date Energy Storage Implementation Guide Energy Storage Cost Tool and Template Energy Storage Technical Specification Template Energy Storage Safety Guidelines Energy Storage Test Manual Energy Storage Commissioning Guide Common Functions for Smart Inverters V4 StorageVET and Supporting Documentation ( Coming Soon: Request for Proposal Guide Available at ESIC Website: 18

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20 EPRI Research Questions on DER and AECs 1. What are the costs and benefits of customer-owned DER to achieve specific types of grid benefits? 2. With respect to design and deployment, where are optimal locations in a utility service territory that offer the greatest benefit to ratepayers and the grid? 3. How can we evaluate distribution systems and optimize DER penetration? 4. How can we obtain useful insight into expected customer adoption and the impacts to the distribution grid? 5. How can we evaluate the design and sizing of microgrids and assess their benefits? 6. How can we develop demonstrations targeting specific types of communities such as low income housing, new residential construction, college campuses, and industrial and agricultural facilities with a goal of understanding distribution system impacts? 7. How can technologies to aggregate multiple types of DER be developed and demonstrated to enable both utilities and aggregators to deploy and control DER effectively? 8. How can we develop customer programs to promote DER adoption that is targeted with respect to both technology and location? 9. What are the economics and effectiveness of off-grid applications? 10. How can emerging technologies be integrated through AECs to enable underserved segments of the customer base such as low income, rural, and small business customers? 11. What innovative financing strategies can support development of such communities and make them financially attractive or practical relative to developments lacking advanced energy attributes? 20

21 Developing Technologies of the Future 21

22 Today s Key Takeaways Energy Storage has Real Possibilities: Even after cutting through the tremendous hype, grid energy storage has substantial potential to make inroads into the electricity industry, through niche applications and specialized technologies at first, but proceeding into broader uses, with potential widespread adoption beginning between 2020 and Lithium Ion Batteries are the Immediate Opportunity: A sharp drop in lithium ion prices in the last two years, and strong interest among developers and regulators, have resulted in a number of prominent deployments in niche applications. If successful, these deployments point the way towards broader application of battery storage in specific locations and uses, though prices are still far too high for more classical uses of storage such as load leveling or bulk storage of renewables. Other storage technologies will find it difficult to compete in the near term but may benefit from a mature storage market in the 5-10 year time frame. Long-Term Research is Critical to Success: Present-day technologies meet some needs on the grid, but future needs require radically better technologies with more energy density, higher efficiency, better reliability and lower cost. These technologies cannot be developed without a systematic approach to research and development covering the entire spectrum of Technology Readiness Levels, from early proof-of-concept through demonstration, pilots, and deployment. 22

23 Together Shaping the Future of Electricity 23

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25 The U.S. Department of Energy (DOE) defines microgrids as a group of interconnected loads and distributed energy resources (DER) within clearly defined electrical boundaries that act as a single controllable entity with respect to the grid. A microgrid can connect and disconnect from the grid to enable it to operate in both grid-connected and island mode. 25

26 Energy Storage Implementation Guide A practical reference guide to the complete lifecycle of an energy storage project that organizes ESIC products and publically available materials, developed for utility project managers Download at 26

27 Energy Storage Cost Tool and Template Excel tool for supporting that all energy storage project costs items are accounted for and quotation requests and responses are clear Vendor Quote Cost Line Item Cost Input Options Vendor Input Units Vendor Quote Units Total ESS Equipment Included-Itemized USD $1,525,000 USD Battery / Energy Storage Medium Included-Itemized $1,000,000 USD $1,000,000 USD Power Conversion System (PCS) Included-Itemized $350,000 USD $350,000 USD Control Software Included-Itemized $25,000 USD $25,000 USD Control Equipment Included-Itemized $50,000 USD $50,000 USD UPS & Other Electronics Excluded USD Excluded USD ESS Thermal Management System Included-Itemized $100,000 USD $100,000 USD Pre-Engineered ESS Structural Components (e.g. containers & racks) Excluded USD Excluded USD Other ESS Purchases N/A USD N/A USD Download at 27

28 Energy Storage Technical Specification Template Adaptable Excel tool for requesting requirements and receiving specs for energy storage products and projects. Download at 28

29 Energy Storage Safety Guidelines Guidance on energy storage safety throughout a project, including reference codes and standards organized by functional area. Example Probability Risk Assessment Download at 29

Energy Storage Test Manual Manual to support consistent characterization of energy storage performance and functionality, including specific, detailed procedures.

30 Energy Storage Test Manual Manual to support consistent characterization of energy storage performance and functionality, including specific, detailed procedures. Auxiliary load determination Volt-VAR regulation Round-trip efficiency Charge/Discharge management* Available energy capacity Peak power limiting* Charge duration Startup/Shutdown time* Rated continuous power Self-discharge* Response, rise, settling time Autonomous frequency regulation* Harmonic distortion *To be included in 2017 revision 30 Download at

31 Energy Storage Commissioning Guide Develop a written commissioning plan with requirements, schedule, and budget Refine commissioning plan and formalize through contract language Develop a decommissioning plan with risk assessment, safety plan, disposal plan, and shutdown procedures Commissioning, field and factory acceptance tests ensure system is operating to specification Re-test or recommission as required by maintenance or performance monitoring Guidelines for energy storage commissioning throughout a project, including recommissioning and decommissioning. Download at 31

definitions for communication and responses IEEE 1547,

32 Common Functions for Smart Inverters Guide to industry on smart inverter functionality for PV/Storage function definitions for communication and responses IEEE 1547, IEC-61850, Rule 21 DNP3, SEP 2.0, Modbus IEC Download at 32

Storage Value Estimation Tool (StorageVET ) www.

com Sophisticated web-hosted and publicly available

33 Storage Value Estimation Tool (StorageVET ) Sophisticated web-hosted and publicly available storage optimization and costbenefit analysis tool supporting cross-stakeholder communication about CBA of projects 33

34 Energy Storage Request for Proposal Guide Guide to support clear communication of project requirements and scope in an RFP with links to other ESIC products supporting storage procurement Publication expected November 2017 Responsibility matrix tool 34

35 Get involved with ESIC For more information, visit Enroll today by sending an to with: Name Title Organization Address Phone 35

Modeling the Value of Energy Storage

Modeling the Value of Energy Storage StorageVET Demonstration Giovanni Damato Technical Leader CESA Webinar 2017-02-16 Agenda 1) Overview of StorageVET (30min) 2) StorageVET Demo (30min) 3) Open Discussion