Community Storage for an Integrated Grid...Community Storage for an Integrated Grid James Newcomb...

Community Storage for an Integrated GridJames Newcomb

Managing Director – Rocky Mountain InstituteCommunity Storage Initiative Leadership Forum, July 2016

An era of disruptive change1

Transforming global energy use to create a clean, prosperous, and secure low-carbon

future.

2000

2500

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3500

4000

4500

5000

5500

6000

19

80

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85

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90

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95

20

00

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05

20

10

20

15

20

20

20

25

20

30

20

35

20

40

ele

ctri

city

sal

es

TWh

Year

EIA electricity consumption projections

Grid spending is rising, but demand is flat

3


future.

Utilities plan to invest $1.4 trillion in infrastructure upgrades through 2030, but sales have declined 5 out of the last 7 years, and growth forecasts have been systematically lowered.

$505

$300

$580

$1,385

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$ b

illio

n

Grid investment forecast, 2015-2030

Source: DOE QER 2015; EEI; EIA EPM and AEO

Actual

Forecasts

2002

2015

Peak demand is increasing4


future.

Across much of the country, hourly peak loads are increasing while annual energy sales remain flat or fall

Source: EIA

ISO New England – Peak-to-average load ratio

Retail rates are rising5


future.

Across many states, retail electricity rates are rising for commercial and residential customers alike, and forecast to continue to do so.

Source: RMI Economics of Grid Defection; EIA

Customers have expanding options6

It is increasingly easy for third parties or utilities to give customers choice in energy services


future.

Source: RMI The Economics of Demand Flexibility

“Buy it” “Make it” “Save it” “Shift it”

7


future.

Solar + storage grid parity on the horizon?

8


future.

Solar PV + battery economics

$/kW

h

Commercial Residential

Source: RMI Economics of Grid Defection

Delivering flexibility to the grid

2


future.

Utilities can lead the transition10


future.

Retail pricing, bridge business models, and eventually new regulatory models can align incentives for customer bill savings and system cost reduction.

Source: RMI Bridges to New Solar Business Models

Demand flexibility is a key resource11


future.

Aggregation of common, connected, controllable devices across US homes can unlock a grid-scale resource

12


future.

13


future.

14


future.

Demand flexibility can save >$13 billion/y

15


future.

Controlling the demand of common residential loads, without significant service interruption, can reduce peak grid demand by 8% and capacity investment by 10%+.$9 billion/y

avoided investment

$3 billion/y lower production costs

$1 billion/y ancillary services


0

5

10

kW

Uncontrolledloadprofile

-

5

10

kW

Flexibleloadprofile

Example: flexibility supports on-site PV use

16


future.

Load can be scheduled to coincide with PV generation in the absence of net energy metering.

Move load into PV production hours

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2

4

6

8

10

12

kW

FlexibleloadprofileBa ery

EV

Dryer

DHW

AC

Otherload


Customers save 10-40% net with flexibility

17


future.

Under rates that exist today, residential customers can achieve 10-40% annual bill savings. Across just four markets, there is an $800 million/y savings potential for eligible customers.


Water heaters2


future.

19


future.

There are ~50 million electric water heaters across the US, with several distinct geographic concentrations

Source: EIA RECS

Water heaters are ubiquitous

10%

90%

Electric DHW %

The Northwest and the Southeast represent concentrated markets for GIWH technology

In other regions, electric water heating is concentrated in rural areas

20


future.

Electric resistance water heaters have a low load factor, a tank heat capacity of ~7 kWh, and thermal stratification and insulation that allow for many forms of grid value

Source: Brattle 2016; RMI The Economics of Demand Flexibility

Water heaters are highly flexible

Depending on the draw profile and grid use case, between 40-60% of kWh used for water heating can be shifted

Letting average tank temperature drift while keeping tank-top temperature within bounds keeps showers hot while flexing energy use

Energy arbitrage: Shifting kWh use to lower-cost hours of the day

Ancillary services: Modulating or cycling power use for a water heater fleet to balance grid supply with demand

Peak demand reduction: Briefly curtailing electricity use during the highest-demand periods for a home, feeder, or utility

We estimate a $3.6 billion/year value of a 100% grid-interactive electric water heater fleet

21


future.

Source: RMI analysis

$1,397

$419

$1,760 $29 $36 $3,641

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$500

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Avoided

generation

capacity

Avoided

T&DEnergy

arbitrageEnergy

savingsRenewable

integrationTotal

Mil

lio

n $

/year

We estimate electric domestic hot water is responsible for ~74 million tonnes/year of CO2

22


future.

ERCOT

FRCC

MRO

NPCCRFC

SERC

SPPWECC

DHWCO2emissions

Source: RMI analysis of: EIA RECS; Graff-Zivin et al (2014); NEEA RBSA

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5

10

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20

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ERCOT FRCC MRO NPCC RFC SERC SPP WECC

lbCO2/unit/day

millionelectricDHWunits

Water heater-caused emissions are concentrated in the Midwest and Southeast due to grid composition and electric DHW adoption rates

Low-cost versus low-emissions heating strategies have widely different CO2impacts

23


future.

Source: RMI analysis of: EIA RECS; Graff-Zivin et al (2014); NEEA RBSA

If all water were heated at night, emissions increase by 13%. If all water were heated during the lowest-emission hours, emissions fall 25%, saving ~18 million tonnes CO2/year.

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5

10

15

20

25

30

ERCOT FRCC MRO NPCC RFC SERC SPP WECC

milliontonnesCO2/year

Nigh mehea ng MinCO2hea ng

Battery energy storage3


future.

Battery costs are falling rapidly25


future.

Costs for battery energy storage are following the same learning curve that brought the cost of solar PV modules down by 80% in five years

Source: BNEF

1976

19982004

2014

2008

2010

H1 2014m=21.6%

m=24.3%

1988

$0.1

$1.0

$10.0

$100.0

1 10 100 1,000 10,000 100,000 1,000,000 10,000,000

$/W

or $

/Wh

Cumulative production (MW, MWh)

Crystalline Si PV module

Li-ion EV battery pack


future.

26Batteries can provide at least 13 services to customers, utilities, and the grid • Batteries deployed behind the

meter can provide the greatest range of services to three groups:

• Customer• Utility• ISO / RTO

• However, batteries deployed behind the meter are commonly used for a single purpose, infrequently

Source: RMI Economics of Battery Energy Storage

Customer-sited batteries could tap this value

27


future.

Batteries deployed for any single purpose, including customer-oriented services, are left idle for the majority of hours, and thus fall short of their full economic potential


Value $/kW-y

“Stacking” battery services increases value

28


future.

For example, a battery used for residential demand charge reduction in Salt River Project territory (AZ) could quadruple its value by providing different services during other hours


Percent of hours

storage is

dispatched to each

service

Electric vehicles4


future.

EVs are poised for dramatic growth

30


future.

Electric vehicles are expected to make up 35% of new sales by 2040

EVs can be a significant grid resource

31


future.

Electric vehicles can smooth renewable energy production and provide network services

-

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12:00 AM 4:00 AM 8:00 AM 12:00 PM 4:00 PM 8:00 PM

De

man

d [

MW

]

Time of Day

Smart EV Demand

Non EV Demand

Projected Hawaiian Electric Co. demand profile, net of PV and wind,with 23% EV penetration and optimized charging

Source: RMI Electric Vehicles as Distributed Energy Resources

Renewable integration5


future.

Key findings from NREL REFS StudyUS national labs analysis of pathways to 80% renewable electricity

The need for flexibility:

• Supply-side• Diversity of resources and geography; flexible

capacity• Wider balancing areas and market organization• Better forecasting for variable renewable supply• Energy storage

• Demand-side• Time-of-use rates and other tariff design elements• Demand response• EV grid integration• Distributed storage• Smart inverters

NREL REFS Supply PortfolioCapacity (GW) and electricity supply (TWh) to 2050

Maintain

Expands electricity system like that of today. Largely based on business-as-usual projections (BAU) from EIA's 2010 AEO.

Renew

Examines a future in which centralized renewables like solar, wind, geothermal, biomass and small (plus existing large) hydro provide 80% of US 2050 electricity.

Transform

Examines 80% renewable future in which 50% originates from distributed sources.

Migrate

Assumes lingering threat of legislation to reduce GHG emissions drives switch from coal and gas to more nuclear power and new coal plants equipped with CCS.

Reinventing Fire scenarios

36

Dramatically different operating paradigms

Getting started6


future.

Some utilities are leading the way to capture this value

40


future.

Leading utilities recognize the value of shaping end-use load, and are delivering customer-focused solutions to help capture the value

Water heaters Batteries Electric vehicles

But utilities are not the only ones interested in flexibility

41


future.

Third party companies are positioning themselves to capture the value created by demand flexibility and other distributed energy resources through a relentless focus on the customer

Lower bills

Shiny objects

Increased comfort

More control

Self-generation

Green attributes

Social engagement

Security

...

Customers want many things... ... and companies are innovating to deliver it

Thank you

Contact:

[email protected] | http://www.rmi.org/electricity_impact

mailto:[email protected]

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