BEFORE THE PUBLIC UTILITIES COMMISSION OF NEVADA ) ) ) )

Transcription

1 BEFORE THE PUBLIC UTILITIES COMMISSION OF NEVADA Investigation regarding battery storage technologies ) ) ) ) Docket No COMMENTS OF THE ENERGY STORAGE ASSOCIATION WITH REGARD TO ENERGY STORAGE ISSUES PERTAINING TO UTILITY PLANNING AND DISTRIBUTION The Energy Storage Association ( ESA ) hereby submits its response to the Commission s request for comments on issues pertaining to utility planning and distribution issued on July 15, 2016 in the above-captioned proceeding. Since its inception 26 years ago, the ESA has promoted the development and commercialization of safe, competitive, and reliable energy storage delivery systems for use by electricity suppliers and their customers. ESA s nearly 200 members comprise a diverse group of electric sector stakeholders, including electric utilities, energy service companies, independent power producers, technology developers of advanced batteries, flywheels, thermal energy storage, compressed air energy storage, supercapacitors, and other technologies component suppliers, and system integrators. ESA submits this filing to the Commission to inform the incorporation of battery energy storage into Nevada utilities resource planning and procurement. NRS (3)(b) requires utilities to develop Integrated Resource Plans ( IRPs ) that compare a diverse set of scenarios of the best combination of sources of supply to meet the demands or the best methods to reduce the demands, which must include at least one scenario of low carbon intensity. Energy storage resources are capable of being modeled both as a source of supply (when directly connected to the electric grid) and as a method

2 of reducing demand (when sited behind a customer meter) in IRPs. Moreover, energy storage can deliver grid services as a part of distribution infrastructure. However, IRPs in Nevada currently do not incorporate grid-sited battery energy storage as an option alongside generation resources to meet expected system demands, and consideration of customer-sited battery storage as a demand resource is absent in such IRPs. Similarly, distribution planning does not include consideration of storage as a resource option. ESA requests that the Commission direct utilities to explicitly consider battery energy storage in both IRPs and in distribution planning using up-to-date modeling inputs and methods. Doing so will ensure that Nevada utilities explore the full range of possibilities necessary to ensure an optimal resource portfolio to delivery reliability at least cost. 1. THE COMMISSION SHOULD DIRECT NEVADA S UTILITIES TO INCLUDE ENERGY STORAGE AS A SUPPLY RESOURCE IN EXISTING INTEGRATED RESOURCE PLANNING EFFORTS. As ESA discussed with the Commission in its previous filing, utilities in other states are already incorporating energy storage into long-term resource planning and meeting peak system needs using storage resources. 1 The continuing lack of consideration of storage as a supply option in Nevada utility resource planning poses a risk to ratepayers that the resulting portfolios will not offer least-cost solutions. 1 See Comments of the Energy Storage Association, filed May 2, 2016 in response to Nevada PUC Docket No Investigation into Battery Energy Storage.

3 As discussed in ESA s previous filing, to ensure resource planning meets leastcost objectives the Commission should first ensure that Nevada utilities evaluate storage resource options using accurate and up-to-date cost and performance data. Additionally, the Commission should ask utilities to remediate the greatest deficiencies for incorporating energy storage into the production cost models that each utility uses for long-term resource planning. 2 In particular, ESA wishes to reiterate that Commission consider directing utilities to account for these known deficiencies by adjusting the cost inputs of energy storage to approximate excluded system benefits, based upon third-party studies that quantify the excluded system value of energy storage in production cost models. 2. THE COMMISSION SHOULD DIRECT NEVADA S UTILITIES TO CONSIDER HOW TO INCORPORATE CUSTOMER-SITED ENERGY STORAGE AS A DEMAND RESOURCE IN FUTURE INTEGRATED RESOURCE PLANNING. Nevada utilities IRPs do not currently contemplate the role of customer-sited energy storage as a demand resource. This is largely due to the long-established convention that IRPs plan for generation to follow load; that is, IRPs treat demand only as an input, forecasting anticipated load amounts and curves and then matching supply to those estimates. Moreover, demand resources as portfolio solutions are generally limited to traditional demand response, i.e., the ability for customers to modify their consumption 2 See Comments of the Energy Storage Association, filed May 2, 2016, as well as Navigant s report Survey of Modeling Capabilities and Needs for the Stationary Energy Storage Industry, published May 2014 and available at

4 when requested, either behaviorally or through load controls. Due to the limited capabilities of traditional demand response, in all states, including Nevada, demand response is not considered in IRPs. Customer-sited battery energy storage is quickly emerging as a more effective form of demand response that will increasingly contribute to system resources. Battery energy storage is faster-responding than behavioral demand response, as resources can be dispatched automatically in response to system control signals and can be dispatched on an ongoing basis without customer intervention. Battery energy storage is also more reliable than behavioral demand response, as resources can be directly measured in realtime to positively confirm deliveries and do not interrupt customer consumption. Furthermore, because battery energy storage is inherently scalable, there are not the same physical limits on flexibility as controllable load demand response. As a result, customer-sited battery energy storage can provide a generationfollowing capability that traditional demand resource cannot. And by modeling customer-sited energy storage deployment, planners can include load that follows generation in their IRPs. As the electric grid is expected to integrate increasing volumes of non-dispatchable renewable generation over the coming decade, utilities will need more flexible resources, and generation-following loads can contribute in a quantifiable and reliable manner to meeting that need. Thus, IRPs should consider customer-sited battery energy storage as a demand resource alongside supply resources as part of possible portfolios to ensure least-cost planning. In this way, customer-sited battery storage can enable broader types of generation procurement with potentially lower cost and better performance relative to any policy goals that could be included in the IRP

5 process. Recent planned deployments in California indicate that customer-sited battery storage can be procured at a scale significant within the planning window of any IRP today. 3 Moreover, general market trends suggest that as customer-sited battery storage economics continue to improve, U.S. installed capacity of customer-sited battery storage in 2020 well within the timeframe of existing IRPs is expected to increase by approximately 20 times the capacity installed in ESA recommends that the Commission direct Nevada utilities to establish a method for assessing the potential contribution that customer-sited storage can make to the solution portfolio. These assessments can then be used in IRPs, as well as inform distribution system planning. 3. THE COMMISSION SHOULD INCREASE UTILITY CAPACITY FOR DISTRIBUTION SYSTEM PLANNING AND DEVELOP PLANNING PROCESSES FOR ENERGY STORAGE, INCLUDING THROUGH THE USE OF PILOT PROCUREMENTS. Energy storage has a unique role to play in distribution system planning as well. Storage can be deployed to defer or avoid costlier distribution system upgrades, as well as increase power quality on distribution circuits. Additionally, energy storage is a critical resource for increasing circuit and substation hosting capacity to meet the system 3 Southern California Edison s 2014 Local Capacity Resource procurement included 135 MW of customer-sited battery energy storage; see The 2016 Demand Response Auction Mechanism procurement included 880 kw of customer-sited battery energy storage; see and installed capacity of customer-sited (residential and non-residential) storage was 35 MW; 2020 estimated installed capacity is 674 MW. See GTM Research, U.S. Energy Storage Monitor: Q2 2016, June 2016, presentation available at _esa_q2_2016_presentation_2016_06_14_final.pdf

6 demands posed by increasing proliferation of distributed energy resources ( DERs ), particularly non-dispatchable generation. And energy storage resources delivering distribution services may be owned and operated by both end-users and utilities to contribute system value. Other states have undertaken a set of actions that the Commission may find informative. New York and California regulators have directed their utilities to develop more transparent distribution system plans, with each state s utility commission eliciting information on the status of distribution infrastructure. 5 New York utilities have additionally piloted all-source RFOs for distribution system capacity, such as in the Brookyln-Queens Demand Management project. 6 Connecticut regulators have directed their utilities to select economic sites for energy storage pilot projects that will defer distribution system upgrades and increase DER hosting capacity, as well as develop an overall planning standard for storage in the distribution system. 7 To increase the capacity of the Commission and utilities to evaluate alternatives to traditional distribution investments, ESA recommends that the Commission direct Nevada utilities to increase transparency and access to information about their distribution systems. Location-specific information on the distribution system, such as substations and circuit loading levels and load profiles, would allow utilities and 5 See details on New York s Distributed System Implementation Plans in New York PSC Case 14-M-0101 Proceeding on Motion of the Commission in Regard to Reforming the Energy Vision and Case 16-M-0411 In the Matter of Distributed System Implementation Plans. See details on California s Distribution Resources Plans at California PUC R Distribution Resources Plan. 6 See ConEd s BQDM Program website at See also similar all-source RFOs for distribution system capacity from NY utility PSEG-LI at and 7 See CT Department of Energy and Environmental Resources, Demonstration Projects for Grid-Side System Enhancements to Integrate Distributed Energy Resources: Request for Proposals from the Electric Distribution Companies, P.A Section 103, issued Aug 12, 2016, available at

7 customers to then determine optimal locations and use cases for energy storage projects, as well as understand what project size, configuration, and technology are best-suited to the site and use case. In turn, both utility- and customer-sited energy storage options can quantify and offer their benefits for distribution system reliability, which the Commission can then evaluate against traditional distribution system investments. ESA also recommends that the Commission direct utilities to develop analytical methods and planning processes for energy storage as a distribution system asset. Using the information collected on distribution infrastructure status, utilities should identify potential energy storage applications on the distribution system and develop an assessment of the potential benefits (as avoided costs and/or associated revenue streams) for energy storage in target distribution system locations. ESA encourages the Commission to focus utilities on hosting capacity analysis, which meets the combined goals of utilities and customers alike. Finally, ESA recommends that the Commission use pilot procurements as a means of driving learning for utilities, Commission staff, and developers to accelerate and inform the development of distribution planning processes generally. ESA recommends the Commission consider directing Nevada utilities to pilot all-source RFOs for distribution system capacity from third-parties. Additionally, ESA recommends the Commission consider directing Nevada utilities to each pilot cost-effective, competitively procured substation-level energy storage projects, in part to drive development of the analytical methods and planning processes specific to storage as a distribution system asset.

8 CONCLUSION ESA commends the Commission for exploring the role that battery energy storage can play in utility planning and distribution. ESA and its member companies look forward to working with the Commission to investigate and ultimately determine how Nevada s utilities can realize the full benefits of energy storage to reduce costs to customers, improve system reliability, and enable system transformation. ESA thanks the Commission for the opportunity to provide comments and looks forward to further participation in this proceeding. DATED August 24, Respectfully submitted, CC: Active Parties Jason Burwen Policy & Advocacy Director Energy Storage Association 1800 M Street NW, Suite 400S Washington DC j.burwen@energystorage.org

9 CERTIFICATE OF SERVICE I hereby certify that I have served the foregoing ENERGY STORAGE ASSOCIATION FILING in Docket No upon all parties of record in this proceeding by electronic service to the following: Tammy Cordova (PUCN) Meredith Barnett Staff Counsel Division (PUCN) tcordova@puc.nv.gov mbarnett@puc.nv.gov pucn.sc@puc.nv.gov Michael Saunders Attorney General s Office Bureau of Consumer Protection bcpserv@ag.nv.gov msaunders@ag.nv.gov Angel DeFazio BSAT TWT NTEFUSA@aol.com info@nvestopsmartmeters.info Info@PUCWatchDogs.com angel@ntef-usa.org Terry Page (EGPNA) Michael C. Tierney Terry.Page@enel.com Mike.Tierney@enel.com Mateo Jaramillo (Tesla) Sarah Van Cleve mjaramillo@tesla.com svancleve@teslamotors.com John Fernandes (RES) Brian Schnall John.fernandes@res-americas.com Brian.schmall@res-americas.com Kathleen M. Drakulich (RTAA)(SolarCity) kdrakulich@mcdonaldcarano.com Adam Green (SolarReserve) Adam.green@solarreserve.com Jason Burwen (ESA) j.burwen@energystorage.org Fred Voltz Zebedee_177@yahoo.com Kenneth L. Wilson (WRA) Robert Johnston Ken.wilson@westernresources.org Robert.johnston@westernresources.org Joseph Petta Sky Stanfield petta@smwlaw.com stanfield@smwlaw.com Suzanne Johnson fuhn@pobox.com Anthony Harrison Anthony.harrison@stem.com Marily Mora (Reno-Tahoe Airport) mmora@renoairport.com Rebecca Wagner (Wagner Strategies) rebwagner@gmail.com

10 DATED August 24, Jason Burwen Policy & Advocacy Director Energy Storage Association 1800 M Street NW, Suite 400S Washington DC j.burwen@energystorage.org