Valuation of Utility-Scale Energy Storage in Production Cost Models

Transcription

1 Valuatin f Utility-Scale Energy Strage in Prductin Cst Mdels David Palchak September 2017

2 Outline Value f strage Price-taker Prductin cst mdels Energy Strage in India Markets fr maximizing strage value 2

3 Valuatin Appraches Price Taker apprach marginal value using histrical market data - Apprximates revenue t a merchant strage plant - Applicatin t India may be different than market regins depending n ff-taker (guaranteed fixed and variable csts versus market prices) Full system value using prductin cst mdels - Operatinal value t a utility r value t sciety, with sme insight int market value 3

4 Price-Taker Value in Restructured Markets Use histrical market data t estimate what a strage plant wuld have received if ptimally dispatched (big caveat) Typically single unit ptimal dispatch simulatins Based n histrical price and lad patterns Use a mixed-integer linear prgram r ther ptimizatin technique Net Energy Sld (% f Pwer Capacity) Net Energy Sld Electricity Price Thu Fri Sat Sun Mn Tue Wed Day Electricity Price ($/MWh) 4

5 Price-Taker Apprach Advantages Readily available data Fast and relatively easy t run simulatins Generally accepted apprach in the academic literature Disadvantages Relies n externally generated prices and typically assumes perfect fresight f prices Examines a static histrical system Examines nly a marginal unit, ignres the rest f the generatin stack Des nt cnsider values nt captured in tday s markets Nt applicable t least-cst planning studies Nt always applicable t meritrder based dispatch 5

6 Wrk-Arunds Add Imperfect Fresight Use histrical dispatch t reflect uncertainty Value f Strage ($/kw-year) Backcasting Perfect Fresight Accuracy % f Theretical Value Captured Year 85 Add price impacts f different lad shapes via price/lad relatinships But price taker appraches are fundamentally limited in evaluating the future rle and value f energy strage. 6

7 Prductin Cst Mdel Apprach Prductin cst mdel (PCM) used t simulate the chrnlgical, least-cst peratin f the reginal pwer grid (i.e. security cnstrained unit cmmitment and ecnmic dispatch mdel) Mdel selects the least-cst mix f generatrs needed t meet annual hurly lad while maintaining reliability requirements. Outputs Ttal cst t meet lad (fuel, VO&M, emissins, and start-ups) Lcatinal price f generatin Transmissin usage/cngestin 7

8 Mdeling Strage in a PCM 1. Revenue PCM Revenue: Run a PCM fr a given scenari with strage and then calculate revenue based n marginal prices and strage dispatch Price-taker (hybrid): Run a PCM fr a given scenari and then run a price-taker mdel with PCM prices 2. Difference-Based Value Run a PCM fr a given scenari Add strage t the scenari and re-run Value f strage is difference between runs 8

9 Mdeling Strage in a PCM 1. Revenue PCM Revenue: Run a PCM fr a given scenari with strage and then calculate revenue based n marginal prices and strage dispatch Price-taker (hybrid): Run a PCM fr a given scenari and then run a price-taker mdel with PCM prices 2. Difference-Based Value Run a PCM fr a given scenari Add strage t the scenari and re-run Value f strage is difference between runs 9

10 Case Study f Strage in India 2022 Greening the Grid RE Integratin Study - Cllabratin with Berkeley Lab and POSOCO Prductin cst mdel f India built fr analyzing the impact f 100 GW slar, 60 GW wind Sensitivity - value f strage: 1) Des strage help in mitigating challenges assciated with RE integratin? 2) Is strage is an effective alternative t cal capacity? 10

11 2022 Assumptins 100 GW slar, 60 GW wind target met Pwer system built based n CEA/CTU plans fr lad grwth, generatin, and transmissin Dispatch mdeled fr each 15-minute perid f the year Strage sensitivity: 20 GWh f strage ttal added in six states in India (Gujarat, Rajasthan, Maharashtra, Tamil Nadu, Karnataka, and Andhra Pradesh) 2.5 GW at 8 hurs at full discharge 75% efficiency Dispatch fixed frm day-ahead schedule 11

12 D batteries reduce perating csts? Hypthesis: In systems with high levels f renewable energy, batteries can absrb RE energy when it isn t needed and discharge during peak demand. Less wasting f RE results in less fuel usage and less variable cst Western Regin in 2022 scenari 12

13 Results f Base Scenari N Strage Lad and generatin balanced fr all perids year 1.6% RE curtailment Majrity in the Suthern Regin during mnsn seasn 13

14 D batteries reduce perating csts? Batteries charge n slar during the day, but als n cal Relatively lw curtailment cupled with minimal pprtunities fr arbitrage and battery lsses lead t a negligible savings in the 15-minute dispatch timeframe 14

15 Des strage ffset cal capacity if dispatched ptimally? Peak Cal Generatin (GW) Difference with Batteries (GW) Peak Gas Generatin (GW) Difference with Batteries (GW) 100S-60W S-60W with batteries (0.66%) (4.5%) Displaces the need fr sme cal, althugh mre expensive generatin displaced first 15

16 Prductin Cst Mdel Apprach Advantages Disadvantages Can d mst things Very cstly (even when free) Time cnsuming t learn Lng slve times (hurs t mnths) Data intensive Frequent and mysterius crashes In summary, running PCMs is ften an incredibly expensive, frustrating, and cnfusing experience. 16

17 Strage Ptential in India Utility-scale Energy Likely, but at what RE penetratin des this add value t the system? Challenge: can batteries get paid fr the value they add (e.g., increasing energy ramping)? Ancillary services Likely, but hw big is this market? Prpsed CERC regulatin is less than 10 GW f spinning reserve, much f which can be cvered by headrm already present frm current dispatch. Firm capacity Unknwn. PLFs f cal plants suggest that there is adequate planning reserve margin. Behind-the-meter (Tesla pwerwall, cmmercial, etc.) Replacing the need fr captive pwer Will increased grid reliability displace the need fr these? 17

18 Thank yu! Cntact: References: Palchak, D., J. Cchran, R. Deshmukh, A. Ehlen, B. McBennett, Michael Milligan, Ilya Chernyakhvskiy, Nikit Abhyankar, S.K. Snee, S. R. Narasimhan, M. Jshi, P. Sreedharan Greening the Grid: Pathways t Integrate 175 Gigawatts f Renewable Energy int India's Electric Grid, Vl. I -- Natinal Study. LBNL Much f this was adpted frm wrk by Paul Denhlm: Denhlm, P. and R. Marglis (2016) Energy Strage Requirements fr Achieving 50% Slar Phtvltaic Energy Penetratin in Califrnia NREL/TP-6A Eichman, J.; P. Denhlm; J. Jrgensn; U. Helman (2015) Operatinal Benefits f Meeting Califrnia s Energy Strage Targets NREL/TP Denhlm, P., V. Diakv, R. Marglis (2015) The Relative Ecnmic Merits f Strage and Cmbustin Turbines fr Meeting Peak Capacity Requirements under Increased Penetratin f Slar Phtvltaics. NREL/TP-6A Sishansi, R., S.H. Madaeni, and P. Denhlm. (2014) A Dynamic Prgramming Apprach t Estimate the Capacity Value f Energy Strage IEEE Transactins n Pwer Systems 29(1) Denhlm, P., J. Jrgensn, M. Hummn, D. Palchak, B. Kirby, O. Ma, and M. O'Malley (2013) Impact f Wind and Slar n the Value f Energy Strage. NREL Reprt N. TP-6A Denhlm, P., J. Jrgensn, M. Hummn, T. Jenkin, B. Kirby, O. Ma, M. O'Malley, and D. Palchak. (2013) Value f Energy Strage fr Grid Applicatins. NREL Reprt N. TP-6A

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