Energy Storage Basics for State Policymakers: Technology, Policy, Economics, and the State of the Industry

Transcription

1 Energy Storage Basics for State Policymakers: Technology, Policy, Economics, and the State of the Industry January 18, 2018 Todd Olinsky-Paul, Clean Energy Group/ Clean Energy States Alliance Seth Mullendore, Clean Energy Group

2 Housekeeping Use the orange arrow to open and close your control panel. Join Audio: Choose Mic & Speakers to use VoIP Choose Telephone and dial using the information provided Questions: Type in questions and comments via the Questions panel. Raise your hand to be unmuted for verbal questions. We will be answering questions throughout the webinar, and during a Q&A at the end. This webinar is being recorded. Slides and a webinar recording will be sent to you via within 48 hours, but these webinar materials will not be posted publicly on CESA s website or elsewhere. 2

3 Energy Storage Basics for State Policymakers: Technology, Policy, Economics, and the State of the Industry Todd Olinsky-Paul, Project Director, Clean Energy Group/ Clean Energy States Alliance Seth Mullendore, Vice President and Project Director, Clean Energy Group 3

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5 Energy Storage Technology Advancement Partnership (ESTAP) (bit.ly/estap) ESTAP is supported by the U.S. Department of Energy Office of Electricity and Sandia National Laboratories, and is managed by CESA. ESTAP Key Activities: 1. Disseminate information to stakeholders ESTAP Project Locations: ESTAP listserv >5,000 members Webinars, conferences, information updates, surveys. Oregon: 500 kw Energy Storage Demonstration Project New Jersey: $10 million, 4-year energy storage solicitation: 13 projects New York: $40 Million Microgrids Initiative Vermont: 4 MW energy storage microgrid & Airport Microgrid Massachusetts: $40 Million Resilient Power/Microgrids Solicitation: 11 projects $10 Million energy storage demo program 2. Facilitate public/private partnerships to support joint federal/state energy storage demonstration project deployment 3. Support state energy storage efforts with technical, policy and program assistance New Mexico: Energy Storage Task Force Alaska: Kodiak Island Wind/Hydro/ Battery & Cordova hydro/battery projects Hawaii: 6MW storage on Molokai Island and HECO projects Northeastern States Post- Sandy Critical Infrastructure Resiliency Project Connecticut: $50 Million, 3-year Microgrids Initiative: 11 projects Pennsylvania Battery Demonstration Project Maryland Game Changer Awards: Solar/EV/Battery & Resiliency Through Microgrids Task Force 5

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7 Supporting 50+ Projects Affordable Housing Critical Facilities Both Chicago Housing Authority: 1,900 public housing units; senior, childcare, and health centers Massachusetts Community Clean Energy Resiliency Initiative: 11 communities, 28 projects California Multifamily Affordable Housing: AB ,000 units City of Boulder: emergency center, shelter, wildfire center, wastewater treatment, public housing New York/New Jersey: 9 multifamily affordable housing projects, community shelter 7

8 ENERGY STORAGE VALUE 8

9 ENERGY STORAGE VALUE : LOCATION Source: RMI The Economics of Battery Storage 9

10 WHAT IS ENERGY STORAGE? Power kilowatts (kw) vs. Energy / Capacity kilowatt-hours (kwh) vs. Duration hours (h) 10

11 LOTS OF STORAGE TECHNOLOGIES 11

12 Source: GTM Research LITHIUM-ION DOMINATING MARKET Lithium Ion = >95% market share U.S. Energy Storage Projects by Technology Type in 2016 (including announced projects) Source: University of Michigan U.S. Grid Energy Storage Factsheet 12

13 LITHIUM-ION PRICES ARE FALLING 13

14 SO ARE RENEWABLES+STORAGE PRICES Electricity from: 2.1 cents / kwh 3.6 cents / kwh Source: Xcel Energy 2017 All Source Solicitation 30-Day Report 14

15 2016 Energy Storage Market Snapshot UTILITY NON-RESIDENTIAL (C/I) Deployed capacity by state (MW) RESIDENTIAL 15

16 ECONOMICS : CUSTOMER SAVINGS Nearly all medium and large commercial customers in every state are obligated to pay demand charges This includes traditional commercial customers (private and nonprofit businesses) as well as a wide array of additional customer types such as community facilities, public buildings, and multifamily housing properties 16

17 ECONOMICS : DEMAND MANAGEMENT 17

18 CASE STUDY: MA PUBLIC HOUSING 18

19 WHERE ARE DEMAND CHARGES HIGH? Source: NREL, CEG - Identifying Potential Markets for Behind-the-Meter Battery Energy Storage: A Survey of U.S. Demand Charges 19

20 Energy Storage: The Policy Landscape and State Policy Tools Source: The 50 States of Grid Modernization: Q Quarterly Report 20

21 Utility markets: capacity and transmission cost reductions New England California Increased solar production is reducing midday demand for grid power Grid sales flat or falling Peak demand rising 2 21

22 Result: Capacity costs increasing 3 22

23 Vermont: GMP Microgrid, Rutland (Stafford Hill) This single 2-hour battery discharge saved GMP $200,000 Peak hour 3:00-4:00 PM Project summary: 4 MW batteries (lithium ion and lead acid) + 2 MW PV microgrid, sited on closed landfill (brownfield redevelopment); provides resilient power for school (public shelter) Project partners: Green Mountain Power, Dynapower, VT DPS, DOE, Sandia, CESA Economics: Project saved $200,000 in 2 hours Massachusetts: SMLD Microgrid, Sterling Project summary: 2 MW / 3 mwh lithium ion battery project, connected with 3.4 MW solar PV at utility substation; islanding capability to support municipal emergency facility. Project partners: SMLD, DOER, DOE-OE, SNL, CESA Economics: Project saved $399,000 in year 1 2 hr = $17,000 savings 23

24 Behind the Meter Markets Demand Charge Management Resiliency Demand Charge Management: Commercial customers pay as much as 50% of their monthly electric bill for demand charges Energy storage can reduce demand charges by managing peak demand 24

25 Federal landscape Investment Tax Credit 30% over 5 years + accelerated depreciation Storage must be charged from eligible renewables Scheduled to sunset FERC orders in wholesale markets 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 Order 794: Frequency Response R&D (national labs) Project support, state/municipal partnerships DOE-OE Sandia National Laboratories Pacific Northwest National Laboratory 25

26 FERC Order 755 Pay for Performance Created new compensation rules for frequency regulation Recognizes value of speed and accuracy 26

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28 States Policy Landscape Procurement targets o CA, OR, MA, NY Grant programs o NY, NJ, MA, CA, WA, OR, VT, others Rebates o CA, NJ o MA? Other incentives o State tax incentive (MD) o Storage adder in solar incentive program (MA) o Resiliency and microgrids programs (MA, CT, NY, NJ, RI, others) o IRP reform (NM, WA) 28

29 California Utility Procurement Mandate: GW by 2020 (+ 500MW additional BTM storage) IOUs have individual targets Sub-targets for transmission, distribution and customersited storage CPUC prioritizes public sector and low-income customers Utility ownership is limited SCE procurement exceeded requirements California Self Generation Incentive Program (SGIP) SGIP budget approximately $566,692,308 through % of incentives reserved for energy storage 15% reserved for residential storage 29

30 Massachusetts Energy Storage Initiative Current Policy/Programs CCERI $40M resiliency grants ( ) Energy Diversity Act (2016) Utilities can now own projects DOER to assess need for utility procurement target State of Charge report (2016) State energy storage roadmap and analysis; recommendations for energy storage policy and programs ACES $10M Energy Storage Demonstration Grants (2017) Utility Procurement Target 200 MWhs by 2020 (announced July 2017) Policy/programs in development SMART Solar Incentives with storage adders Microgrids program Resilient fueling stations program Grid modernization Storage inclusion in energy efficiency plans (pilots proposed) Storage inclusion in Alternative Portfolio Standard Storage rebate program 30

31 State Policy Tools 1. Studies and planning 2. Grants (demonstration projects) 3. Longer-term policy and programs Utility mandates/procurement targets and portfolio standards Incorporating storage into existing incentive programs Tax incentives, alternative (3 rd party) ownership structures Rebates Financing, clean energy financial institutions Market-based tools and regulatory reform Technical assistance, tools, and resources 31

32 Conclusions Energy storage offers many benefits including energy cost savings, resiliency, grid services, and guarding against the devaluation of solar. Storage markets are underdeveloped, and many valuable services are not yet monetizable; but state policies and programs can help. In some markets, solar+storage systems can pay for themselves; however, market failures and barriers must still be addressed. Until markets support full monetization of all the benefits storage can provide, and until standard third-party financing is widely available, public support will be important. 32

33 Conclusions (continued) Incorporating storage into existing incentive programs that support solar deployment, such as SREC programs, solar incentives, energy efficiency subsidies and procurement mandates, can be a fast and effective way to provide support for BTM solar+storage. Energy efficiency programs, in particular, can represent a significant untapped resource; storage should be made eligible. Technical assistance is important to ensure projects will be successful. There is no silver bullet. States should incorporate a variety of policy approaches customer incentives, utility procurement standards, financing support, regulatory reform, soft cost reductions. 33

34 Join the Discussion Type your questions and comments into the Questions box on your webinar console. Raise your hand to be unmuted for verbal questions. This webinar is being recorded. Slides and a webinar recording will be sent to you via within 48 hours, but these webinar materials will not be posted publicly on CESA s website or elsewhere. 34

35 Todd Olinsky-Paul Project Director Clean Energy States Alliance Seth Mullendore Vice President and Project Director Clean Energy Group Learn more about the Energy Storage Technology Advancement Partnership (ESTAP) on CESA s website at: For more information and resources about resilient solar+storage, visit Clean Energy Group s Resilient Power Project webpage at 35