Energy Storage State Policy Update Jeff Cramer

Transcription

1 Energy Storage State Policy Update Jeff Cramer CELA Webinar November 15, 2017

2 Agenda What is energy storage? Policy tools Q3 policy updates/deep dives IRP update New Mexico and Washington Storage study North Carolina and Nevada Procurement target - Oregon 2

3 3 WHAT IS ENERGY STORAGE?

4 Storage is in all parts of the grid And in microgrids

5 Older Storage

6 Newer Storage

7 Why all the buzz on battery storage? Fastest growing storage type Costs declining rapidly Quick to deploy (Aliso Canyon <6 mo from contract) Located on all part of the grid at any size Operated by utilities, customers, and thirdparties Systems from 5 kw to 30,000 kw in use Can provide multiple services interchangeably 7

8 Costs continuing steep decline Recent projects TEP (AZ): 30 MW, 4-hr storage MW solar = $0.045/kWh Source Cost Past Projected IHS 1 Installed cost 52% reduction % reduction Lazard 2 Installed cost 50% reduction BNEF 3 Battery cost 60% reduction % reduction Navigant 4 Battery cost 50% reduction UBS 5 Battery cost 50% reduction % reduction GTM 6 BOS cost 41% reduction IHS 7 BOS cost 50% reduction KIUC (HI): 20 MW, 5-hr storage + 28 MW solar = $0.11/kWh 8

9 Storage can provide multiple services SOURCE: RMI

10 Deployments across states Front of the Meter Deployments - MW Behind the Meter Deployments - MW State Non- Residential Residential Total Arizona California Hawaii Massachusetts New Jersey >700 New York PJM (Excl. NJ) Texas All Others Total Source: GTM Research Energy Storage Data Hub Source: GTM Research CA will remain in lead, with HI, AZ, TX, MA, & NY vying for 2 nd place through

11 11 POLICY TOOLS RECAP

12 Policy tools fall into three categories Capture the full VALUE of energy storage Ensure accurate market signals that monetize economic value, operational efficiency, and societal benefits Enable COMPETITION in all grid planning and procurements Storage can be a costsaving and higherperforming resource at the meter, distribution, and transmission levels Ensure fair and equal ACCESS for storage to the grid and markets Reduce market and grid barriers that limit the ability for energy storage systems to interconnect

13 Policy tools in the toolbox

14 14 POLICY UPDATES - Q3

15 New Mexico and Washington include storage in resource planning New Mexico Commission voted unanimously to require utilities to include energy storage in planning process Final Order released on 8/2 added energy storage to each relevant section of the IRP Washington Commission now requires utilities to prove they have considered energy storage before rate basing a new asset Final Policy Statement released on 10/ 11 adopted all of ESA s recommendations 15

16 Washington UTC U Policy Statement utilities must be able to demonstrate in any prudence determination for a new resource acquisition that their analysis of resource options included a storage alternative. This policy applies to investments in generation and distribution projects, as well as transmission projects that have not been selected for regional cost allocation through a regional transmission planning process 16

17 Comparison of flexibility attributes Range Utilization Gas Peaker ~80% of capacity--minimum operational limits Low--only to meet peak demand or emergencies Energy Storage 200% of capacity--can act as supply or demand High--simultaneous grid services Service Factor Low--only when spinning (<10%) High always on (50-100%) Dispatch time Minutes Seconds Standby Start/stop costs & Emissions No costs & No direct emissions

18 Net Cost of Capacity = Cost Operational Benefits As outlined in Portland General Electric 2016 IRP Traditional cost of capacity comparison $/kw More expensive Installed Cost Installed Cost Energy Storage Gas CT Less expensive Net cost of capacity comparison $/kw Installed Cost Flexibility Benefits Energy Storage Net Cost Net Cost Electricity Sales Installed Cost Gas CT 19

19 Ongoing implementation of storage Nevada study legislations SB 204 enrolled in May 2017 calls on the Commission to determine if energy storage is in ratepayer interest and set targets by October First workshop at the Commission held on 11/9. Commission will not be conducting modeling. North Carolina HB 589 omnibus bill enrolled in July 2017 calls on Up to $75,000 in matching funds, recently secured $150,000 total Maryland HB 0773 enrolled in May 2017 tasks the Department of Natural Resources with conducting a storage study by December Allocated $125,000 in funds. Unclear if study will include Maryland specific modeling (currently not in scope). 20

20 MA State of Charge study Commissioned by MA Dept. of Energy Resources Part of Gov. Baker s Energy Storage Initiative Explores cost-benefit and policy/regulatory framework for storage Modeled 1,766 MW of battery storage deployment in MA Found $2.3B in ratepayer benefits & $1.1B in storage direct revenues Compared to $1-1.3B in storage cost Ultimately recommends policies to support the deployment of 600 MW $800MM savings over 10 years 350,000 mtco2 reduction over 10 years (equiv. 73K cars) 21

21 Taming peaks is key MA State of Charge Study: 1,766 MW of storage is economically justified Reduced peak capacity Energy price reduction Generator cost reduction T&D deferral DER integration Ancillary service cost reduction $- $500 $1,000 $1,500 $2,000 50% of benefit is reducing system peak 25% of benefit is reducing local peak (T&D deferral + DER integration)

22 Peak capacity is expensive Top 1% of MA hours = 8% of MA cost ($680MM/yr) Top 10% of MA hours = 40% of cost ($3B/yr) 24

23 Oregon moving forward with procurement target Legislation called PGE and PacifiCorp to procure between 5 MWh and 1% of peak load Utilities filed Energy Storage draft evaluation plans on 7/14 PGE filed proposal on 11/1 for utility owned projects ranging from MW of energy storage (maximum procurement allowed in bill) PacifiCorp has not yet filed proposal for projects (statutory deadline for draft proposals 1/1/

24 Key considerations for procurement targets Is there a long term policy signal? Is the target binding? Is there a competitive framework that ensures multiple end-use applications and ownership structures? What technologies are included? 26

25 QUESTIONS?