Hydrogen Energy Storage (HES) and Power-to-Gas Economic Analysis. CHBC Summer Summit. Josh Eichman, PhD. Downey, California 7/30/2015

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1 Hydrgen Energy Strage (HES) and Pwer-t-Gas Ecnmic Analysis CHBC Summer Summit Jsh Eichman, PhD Dwney, Califrnia 7/30/2015 NREL/PR NREL is a natinal labratry f the U.S. Department f Energy, Office f Energy Efficiency and Renewable Energy, perated by the Alliance fr Sustainable Energy, LLC.

2 Outline Opprtunity fr HES / P2G Markets cnsidered Market valuatin results Future market expectatins Additinal prjects 2

3 Cmplementary Hydrgen Systems Electric Grid Grid Services Grid Services Hydrgen Strage Water Electrlyzer Fuel Cell r Turbine Fuel Cell Vehicles Hydrgen Water Refrmer Pipeline Injectin Chemical and Industrial Prcesses Direct injectin r methanatin Natural Gas Grid Surce: (frm tp left by rw), Warren Gretz, NREL 10926; Matt Stivesn, NREL 12508; Keith Wipke, NREL 17319; Dennis Schreder, NREL 22794; NextEnergy Center, NREL 16129; Warren Gretz, NREL 09830; David Parsns, NREL 05050; and Bruce Green, NREL

4 Opprtunities fr Pwer-t-gas Natural Gas System 305,000 miles f transmissin pipelines 400 undergrund natural gas strage facilities 3.9 Bcf undergrund strage wrking gas capacity Surce: ngpipeline/index.html Strage equates t Undergrund Natural Gas Strage Facilities 38 billin kg f H 2 used t prduce CH 4 frm CO 2 methanatin fr ne fill CO 2 + 4H 2 CH 4 + 2H 2 O (Sabatier prcess) 4

5 Expected Curtailment frm CAISO mdel Results frm CAISO 2014 LTPP mdel (Lng Term Prcurement Plan) Surce: 5

6 Market value varies fr services prvided Energy Electric Price Ancillary Services Vltage Supprt Lad-Fllwing Up/Dwn Regulatin Up/Dwn Spinning Reserve Nn-Spin Reserve Black Start Capacity $150/kW-year Surce: Pfeifenberger, J.P.; Spees, K.; Newell, S.A Resurce Adequacy in Califrnia. The Brattle Grup CAISO Day-Ahead Market Clearing Prices 6

7 Quantify the value f energy strage An peratins ptimizatin mdel is used t quantify value frm electricity markets and the sale f hydrgen Optimizatin mdel can perfrm time-reslved cptimizatin f energy, ancillary service and hydrgen prducts quickly Assumptins Sufficient capacity is available in all markets Objects dn t impact market utcme (i.e., small cmpared t market size) Histrical r Mdelled Energy Prices Reserve Prices Hydrgen Price Operatinal parameters Optimizatin mdel Prfit based n peratin (arbitrage, AS, H 2 sale, etc.) 7

8 Apprach Assumptins fr Price-taker Pumped Lithium In Statinary Steam Methane Prperties Electrlyzer Hydr Battery Fuel Cell Refrmer Rated Pwer Capacity (MW) kg/day Energy Capacity (hurs) Capital Cst ($/kw) $/kg/day 4 Fixed O&M ($/kw-year) % f Capital 4 Hydrgen Strage Cst ($/kg) Installatin cst multiplier Lifetime (years) (4500cycles) Interest rate n debt 10% 10% 10% 10% 10% Efficiency 80% AC/AC 1 90% AC/AC 1 40% LHV 70% LHV MMBTU/kg kwh/kg 4 Minimum Part-lad 30% 7 1% 10% 10% 100% Surce: 1 EPRI 2010, Electricity Energy Strage Technlgy Optins, EIA 2012, Annual Energy Outlk 3 DOE 2011, DOE Hydrgen and Fuel Cells Prgram Plan 4 H2A Mdel versin NREL 2009, NREL/TP (nly purchase nce if using FC&EY system) 6 NREL 2008, NREL/TP Levine, Jnah 2003, Michigan Technlgical University (MS Thesis) 8

9 Price-Taker Results with histrical prices Cnventinal strage technlgies are ften nt cmpetitive based n direct market revenue Cmparisn f yearly revenue and cst % Cst Range (lw t high) Cst cmpsed f Capital, fixed O&M and installatin Name HYPS Li-In FC EY SMR Technlgy Pumped Hydr Lithium-In Fuel Cell Electrlyzer Steam Methane Refrmer Name All Enly Baselad Services All Ancillary Services Energy Arbitrage nly Flat peratin 9

10 Price-Taker Results with histrical prices Fr electricity-in, electricity-ut strage, system csts must be reduced t imprve cmpetitiveness Cmparisn f yearly revenue and cst Name HYPS Technlgy Pumped Hydr Cst cmpsed f Capital, fixed O&M and installatin Des nt include gas cmpressin Li-In FC EY Lithium-In Fuel Cell Electrlyzer Cst Range (lw t high) SMR Steam Methane Refrmer N Hydrgen Sld Name All Enly Baselad Services All Ancillary Services Energy Arbitrage nly Flat peratin 10

11 Price-Taker Results with histrical prices Selling hydrgen increases cmpetitiveness Prviding ancillary services > Energy nly > Baselad Electrlyzers prviding demand respnse are prmising pprtunity Range f ptential prices at which hydrgen can be sld ($3-10/kg) Cst Range (lw t high) Des nt include gas cmpressin Name HYPS Li-In FC EY SMR Technlgy Pumped Hydr Lithium-In Fuel Cell Electrlyzer Steam Methane Refrmer Name Services N Hydrgen Sld 400kg hydrgen sld/day All Enly All Ancillary Services Energy Arbitrage nly Baselad Flat peratin 11

12 Energy Capacity Sensitivity Analysis Mre strage is nt necessarily mre cmpetitive in current energy and ancillary service markets FC-EY strage device with varying energy capacity CAISO 2012 Slight increase Cst Range (lw t high) Hydrgen sale price range ($3-10/kg) 12

13 Future market expectatins Impacts frm variable generatin (VG) Energy Markets Reduce Lcatinal Marginal Prices (LMP) Mre ccurrences f zer r negative LMP perids Mre vlatile LMPs caused by increased variability Greater need fr flexible resurces in the energy market Ancillary Services Increase the requirements fr nrmal balancing reserve, which can increase the prices fr thse services. Mre frequent price spikes as a result f higher balancing reserve demands and increased variability and uncertainty May require greater flexibility frm the resurces that crrect fr its variability and uncertainty. Capacity Markets Increase in resurces prviding capacity rather than energy because f reductin in LMPs May require planning and building mre flexible resurces t prepare fr future needs rather than fcusing n the need fr megawatt capacity alne. Mre infrmatin is available at 13

14 Other Relevant Prjects NREL DOE strage analysis activities fr FY15 Further quantify value f HES Explicit spatial mdeling Infrastructure pprtunities Expand use f data (years, lcatins) Califrnia Specific Pwer-t-gas business case assessment Jint CARB-DOE-NREL analysis activity Business case analysis fr Pwer-t-gas systems Near-term assessment Lk at several specific lcatins in Califrnia Business case includes multi-sectr integratin and credit markets (i.e., electric, gas, transprt, industrial supply) NREL SCalGas: Pwer-t-Gas prject 14

15 Questins?