Energy Storage Systems and Role for the US Grid

Energy Storage Systems and Role for the US Grid Dr. Michael Kintner-Meyer Pacific Northwest National Laboratory Richland, WA 99354 U.S.A. PNNL-SA-114280

Pacific Northwest Demonstration Project What: $178M, ARRA-funded, 5-year demonstration started in 2010 60,000 metered customers in 5 states Why: Develop communications and control infrastructure using incentive signals to engage responsive assets Quantify costs and benefits Contribute to standards development Facilitate integration of wind and other renewables Only project of its kind integrating resources across multiple utilities to achieve regional benefits. Absender Titel TT.MM.JJJJ Seite 2

Project Basics Transactive Control Operational Objectives Manage peak demand Facilitate renewable resources Address constrained resources Improve system reliability and efficiency Select economical resources (optimize the system) Aggregation of Power and Signals Occurs Through a Hierarchy of Interfaces Absender Titel TT.MM.JJJJ Seite 3

Project Successes Developed and demonstrated ability to coordinate incentive signal response across 11 utilities in five states using transactive control technology At the end of the Project: Participating utilities basing future investment decisions on experience gained ~$80M Base smart grid equipment installed at 11 utilities Scale up analysis: 30% penetration of transactive control in the Pacific Northwest would lead to ~8% reduction in peak load Transactive control system design and reference implementation suitable for standardization Absender Titel TT.MM.JJJJ Seite 4

Energy Storage in High-Reliability Zone, Salem, Oregon Storage: Lithium-Ion Battery, EnerDel, 5 MW, 1.25 MWh (15 min) Function: Outage management Peak demand reduction Energy arbitrage Via Transactive Incentive Signal Absender Titel TT.MM.JJJJ Seite 5

Energy Storage in High-Reliability Zone, Salem, Oregon Lithium-Ion Battery 40 battery racks: each 1.25 kw EnerDel Capacity: 5 MW, 1.25 MWh (15 min) Preferred operation: SOC range: 20%-80% to increase life Limited to 300 cycles per year Control strategy: Retain 500kWh (40% of capacity) for outage management. Use remaining 20% of energy capacity for the transactive control Peak demand reduction Energy arbitrage Absender Titel TT.MM.JJJJ Seite 6

Dispatch of Energy Storage SOC Discharging Charging Absender Titel TT.MM.JJJJ Seite 7

Cost Benefits of Energy Storage System Cost Annualized Cost [K$/a] Battery System and Inverter 2,138 Transactive Node Development and Equipment 109 Materials and supplies 104 Engineering and IT support 8 Outreach and Education 6 Total 2,365 Estimated Benefits - 110 commercial customers [K$/a] - 40 residential customers Mitigation of Voltage sags 120 Outage management 16 Arbitrage and peak demand reductions 10 Total 146 Cost > Benefits To increase benefit Stack up additional value Increase utilization of machine Absender Titel TT.MM.JJJJ Seite 8

Storage Can Serve Many Grid Functions 1 2 3 4 5 7 6 Transmission Arbitrage Balancing Regulation Startup cost Distribution System transformer deferral and Volt/VAR control Upgrade deferral PV integration EV penetration Customer Side Industry, School, Multifamily Bundled Services PNNL Production cost modeling Stochastic model w.&w/o Valuation, KERMIT Production cost models PNNL opti tool GridLab-D, OpenDSS Economic tools Gridlab-D, OpenDSS GridLab-D, OpenDSS Optimization tools Deferral, outage management, balancing, arbitrage, capacity transmission, VoltVAR control Capacity Expansion? Absender Titel TT.MM.JJJJ Seite 9

Siting and Controlling Energy Storage to Maximize Benefits Absender Titel TT.MM.JJJJ Seite 10

Near-term Opportunity: CPUC Decision, Oct. 2013 IOUs Procurement Targets $5 Billion Opportunity provided: Make a cost-effective case Can be operated profitably Transmission: 50% Distribution: 33% Customer: 17% Absender Titel TT.MM.JJJJ Seite 11

Additional and Total Intra-Hour Balancing Requirements by Region (2020 with 20% RPS) Adding about 180 GW of wind to the existing capacity Add. Balancing Power Required (MW) Total Balancing Power Required (MW) Existing Wind Capacity (MW) Additional Wind Capacity (MW) Total Wind Capacity 2020 (MW) Ratio (MW balance/ MW Wind) Region WECC 1,530 6,310 9,550 14,440 23,990 0.11 ERCOT 1,120 3,930 10,950 12,860 23,810 0.09 EIC 15,920 27,430 22,460 152,960 175,420 0.10 Total US 18,570 37,670 42,960 180,260 223,220 0.10 Absender Titel TT.MM.JJJJ Seite 12

Market Size Est. for Storage Technologies to Meet Add l and Total Intra-Hour Balancing Requirements (2020 Grid with 20% RPS) Absender Titel TT.MM.JJJJ Seite 13

Lifecycle Cost Analysis Results - NWPP Absender Titel TT.MM.JJJJ Seite 14

Arbitrage: Detailed Production Cost Modeling Estimates the Revenue Opportunities WECC EIC ERCOT Absender Titel TT.MM.JJJJ Seite 15

Arbitrage Results Did NOT Indicate Viable Economic Solution Annual and Marginal Arbitrage Revenue per MW Annualized Arbitrage and Capacity Reserve Profits Energy Storage Devices are not Expected to Achieve Cost Recovery when Deployed for Arbitrage Services However, when adding $150/kW capacity value Pumped Hydro is economically viable Absender Titel TT.MM.JJJJ Seite 16

Siting and Controlling Energy Storage to Maximize Benefits Absender Titel TT.MM.JJJJ Seite 17

Bainbridge Island Bainbridge Setup: 3 Substations Looped transmission comes in from the north 2 radial substations (Winslow and Murden Cove) supply power for most of the island Substations are capacity constrained Reliability issues with radial transmission AND distribution Proposed Solution: Add new substation to the island Community opposition PSE Planning would also like to loop transmission (not considered as part of our economic analysis) Absender Titel TT.MM.JJJJ Seite 18

Bainbridge System Cost Estimate Budget Summary Total Cost ($) $/kw Energy Farm Price 9,200,000 2,300 Siting 25,000 6 Electrical 564,000 141 Thermal Mgt 283,000 71 Site/Civil 318,000 80 Installation 247,000 62 Communications 185,000 46 IT 110,000 28 Overheads 2,266,000 567 WA Sales Tax 1,057,000 264 Contingency 505,000 126 TOTAL 14,760,000 3,690 Greenfield build Some costs shared with future substation; subtracted from future sub costs Balance of plant (BOP) cost is ~20% of total cost Learning may reduce future costs Overhead costs may decline Absender Titel TT.MM.JJJJ Seite 19

Energy Storage Optimization Tool Inputs Absender Titel TT.MM.JJJJ Seite 20

Energy Storage Optimization Tool Output Absender Titel TT.MM.JJJJ Seite 21

charging discharging Bundling Services: How to do it optimally? Energy price ($/MWh) Arbitrage only Absender Titel TT.MM.JJJJ Seite 22

charging discharging Bundling Services: How to do it optimally? Energy price ($/MWh) Arbitrage only Arbitrage+Balancing Absender Titel TT.MM.JJJJ Seite 23

charging discharging Bundling Services: How to do it optimally? Energy price ($/MWh) Arbitrage only Arbitrage+Balancing Arbitrage+Balancing+T&D deferral Unloading distribution system transformer Absender Titel TT.MM.JJJJ Seite 24

Hourly Value at Bainbridge Island for 24-hour Period Absender Titel TT.MM.JJJJ Seite 25

Summary of Results (NPV benefits and revenue requirements over 20-year time horizon) Bainbridge Island Random Outages Mid- C Capacity Value Projected Outages Mid- C Capacity Value Random Outages Peaker-Driven Capacity Value Projected Outages Peaker-Driven Capacity Value Absender Titel TT.MM.JJJJ Seite 26

Washington State Clean Energy Funds Energy Storage Project Avista 1 MW / 3.2 MWh vanadium-flow battery Puget Sound Energy 2 MW / 4.4 MWh lithium-ion/phosphate battery Snohomish PUD MESA 1 2 MW / 1 MWh lithium-ion battery MESA 2 2 MW / 6.4 MWh vanadium-flow battery Total 7 MW / 15 MWh; $14.3 million state investment / $43 million total investment for energy storage systems Absender Titel TT.MM.JJJJ Seite 27

Electric Grid Energy Storage Services Category Services Avista PSE SnoPUD Bulk Energy Services Transmission Infrastructure Services Distribution Infrastructure Services Electric Energy Time Shift (Arbitrage) Y Y Y Electric Supply Capacity Y Y Y Transmission Upgrade Deferral Transmission Congestion Relief Distribution Upgrade Deferral Y Y Voltage Support Y Y Load Shaping Service Y Y Y Ancillary Services Regulation Services Y Y Y Customer Energy Management Load Following Services Y Y Y Real-World Flexibility Operation Y Y Y Black Start Capability Power Reliability Y Y Demand Management Retail Energy Time Shift Power Quality Y Washington CEF Energy Storage Projects Represent the Most Extensive Modeling and Validation of ESS Use Cases to Date Absender Titel TT.MM.JJJJ Seite 28

Additional Information on Energy Storage National Assessment of Energy Storage for Grid Balancing and Arbritrage: Vol 1: http://energyenvironment.pnnl.gov/pdf/national_assessment_storage_phase_ii_vol_1_final.pdf Vol 2: http://energyenvironment.pnnl.gov/pdf/national_assessment_storage_phase_ii_vol_2_final.pdf Distributed Energy Storage System Analysis: http://www.pnnl.gov/main/publications/external/technical_reports/pnnl-23040.pdf BSET tool: http://energymaterials.pnnl.gov/pdf/pnnl-23039.pdf Protocols for Performance Measurements: http://www.pnl.gov/main/publications/external/technical_reports/pnnl-22010.pdf http://energyenvironment.pnnl.gov/highlights/highlight.asp?id=1729 Absender Titel TT.MM.JJJJ Seite 29

Contact Michael Kintner-Meyer Pacific Northwest National Laboratory Richland, WA 99352 E-mail: michael.kintner-meyer@pnnl.gov Tel.: 001.509.375.4306 Absender Titel TT.MM.JJJJ Seite 30