Value of Energy Storage in Utility Applications. Ben Kaun Sr. Project Engineer SVLG Energy Committee Meeting November 21, 2013

Transcription

1 Value of Energy Storage in Utility Applications Ben Kaun Sr. Project Engineer SVLG Energy Committee Meeting November 21, 2013

2 Overview of Presentation EPRI Introduction Overview of Energy Storage Role on the Grid CPUC Energy Storage Proceeding Overview of EPRI Analysis for CPUC 2

3 The Electric Power Research Institute (EPRI) Independent, non-profit, collaborative research institute, with full spectrum industry coverage Nuclear Generation Power Delivery & Utilization Environment & Renewables Major offices in Palo Alto, CA; Charlotte, NC; and Knoxville, TN 3

4 EPRI Energy Storage Program Mission Facilitate the availability and use of grid-ready storage options Understanding storage technologies and capabilities Identifying and calculating the costs and values of storage Specification and testing of storage products Implementation and deployment of storage systems 4

5 Energy Storage Role on the Electric Grid 5

6 Storage: A Flexible Asset for a Changing Grid A resource for shifting energy or load from one time to another A local source of capacity to supply peak demand and enhance reliability and resiliency A method to enable load shifting to improve asset utilization and defer capital investment An option to provide flexibility to mitigate variability from renewable generation 6

7 The Roles of Storage on the Grid Bulk Storage Ancillary Services Distributed Storage Thermal Storage Distributed Storage Commercial Storage Residential Storage V2G 7

8 CPUC Energy Storage Proceeding and Ruling 8

9 Background of CPUC Storage Proceeding Initiated by California Assembly Bill AB2514 passed in 2010 CPUC was directed to initiate a 2 year proceeding for energy storage Assess cost-effectiveness of storage Recommend procurement target levels for cost-effective energy storage in 2015 and 2020 CPUC Storage OIR (Order Instituting Rulemaking) R began in 2012, to be completed in October Proceeding to be repeated biannually 9

10 CPUC Energy Storage Decision Summary CPUC Commissioner Carla Peterman GW of storage in California by 2020 Pumped hydro (>50MW) not eligible Bi-annual targets (starting in 2014) with location / utility breakdown ~30% CAGR of storage capacity until 2020 Some reduction possible if storage not costeffective Proposed by Commissioner Carla Peterman (assigned to this proceeding) Approved unanimously by CPUC commissioners on October 17. Available at: ished/g000/m078/k912/ pdf 10

11 CPUC Energy Storage Procurement Targets 11

12 Next Steps for Utilities and CPUC Storage solicitation plan and cost-effectiveness methodology to be submitted by utilities by March 1, First storage solicitation scheduled to begin by December 1, MW of storage in California across all utilities and location domains New Pumped hydro proceeding to begin by 1 st quarter of 2014 because large pumped hydro was excluded 12

13 Energy Storage Cost-Effectiveness Investigation 13

14 Background of EPRI Storage Value Analysis for CPUC EPRI began developing a software tool in 2011: Energy Storage Valuation Tool (ESVT) CPUC approached EPRI for support with the storage proceeding EPRI agreed to self-fund an effort to validate the applicability of the ESVT to enable transparent valuation of energy storage with different locations, uses, and technologies EPRI reviewed lifetime cost-effectiveness of energy storage in 31 different cases, defined by CPUC and stakeholders Issued a report in June, documenting the full process, inputs, results: 14

15 EPRI Energy Storage Valuation Tool (ESVT) Supports this Methodology INPUTS MODEL OUTPUTS Time-Varying Prices/Loads Optimization of Storage Operation Cost / Benefit Cost Benefit Financial Assumptions Detailed Financials Storage Cost / Performance Storage Operation 15

16 How it Works: Simplified Overview of ESVT Model Dispatch Top priority: Local Reliability services / peak shaving Shave peak to offset load growth Load by hour in a year Second priority: System resource adequacy / capacity Co-optimize for market profitability between energy and ancillary services (reg up, reg down, spin, non-spin) Energy Price ($/MWh) Regulation Down Price ($/MW) Regulation Up Price ($/MW) Synchronous Reserves Prices ($/MW) 16

17 CPUC Energy Storage Identified Use Cases 17

18 Cost-Effectiveness: EPRI investigated a subset of these use cases to inform the CPUC 18

19 Overview of Analysis Runs Performed by EPRI Incorporates fixed and variable costs and benefits. Considers time value of money. Does not consider the effects of storage deployment or changing markets. 19

20 Breakeven Capital Cost Results also Provided Highest storage upfront capital cost resulting in positive NPV. Hard to generalize -- Dependent on use case, location, and technology. 20

21 Example Result: Distribution Storage at Substation Result Benefit/Cost Ratio = 1.19 Breakeven Capital Cost: $866/kWh ($3464/kW) Input Summary Year 2015 start 20 year project life, one battery replacement 1MW, 4hr (battery) CapEx = $2000/kW, $500/kWh 11.5% discount rate 83% RT Efficiency Energy & A/S prices escalated 3%/yr from CAISO 2011 $279/kW upgrade cost 2% load growth rate 21

22 Challenges Remain Tools for understanding the value and grid impacts of storage are still in development Grid energy storage is often still a technology, not a product solution Cost assumptions for storage defined in these scenarios have yet to be achieved Grid deployment, integration, and operation of storage are still major unknowns Storage options will not become viable without a concerted, targeted research effort 22

23 Together Shaping the Future of Electricity 23