Project Update - Phase 1
ESCRI-SA Energy Storage for Commercial Renewable Integration
South Australia
by
Bruce Bennett, AGL
Hugo Klingenberg, ElectraNet
Paul Ebert, WorleyParsons
ESCRI-SA
Background to Project
A reasonable business case for the use of large scale storage (100s of MWs) such as pumped hydro, potentially compressed air and other concepts including gas line-capacity
A potential business case around smaller (<30 MW peak) storage where both a renewable energy generation time shift (“arbitrage”) value could be combined with a network service value
► A study was undertaken in 2011 examining the
role of energy storage for renewable energy
integration in South Australia, which found;
ESCRI-SA
What is ESCRI-SA?
Started as a conversation around the smaller energy storage concept (<30MW peak) between WorleyParsons and AGL
Grew to include ElectraNet and the potential to assist renewable energy integration in South Australia
Evolved as a project to demonstrate the business case around such storage, including;
- The value proposition to renewable generation
- The commerciality of the concept if combined with transmission network value
- The ability of storage technology to meet utility and market standards
- The commercial framework under which such an asset could be owned and operated
- How such an asset would fit into the Regulatory framework
► Energy Storage for Commercial Renewable
Integration – South Australia (ESCRI-SA)
ESCRI-SA
What is ESCRI-SA?
Phase 1 – Business Case
• Regulatory environment
• Initial siting
• Functional specification
• Capital estimating
• Technology selection
• Commercial framework
• Market impact & value
Phase 2 – Project Delivery
• Statutory approvals
• Formal procurement
• Finance raising
• Detailed design
• Construction
• Commercial contracts
• Operation of asset
?
ESCRI-SA
Phase 1 – Basics
► Targeting revenue from three services;
The trading of energy into the NEM, and specifically the
time shifting and trading of wind energy within the South
Australian NEM Region
The provision of ancillary services into the NEM
The provision of network services at Transmission level
► Is technology neutral, but;
Looking for commercial solutions that can meet utility
standards and expectations, under a LSTK EPC supply
Not pursuing pumped hydro or large scale CAES
ESCRI-SA
ESCRI Phase 1 – Fundamental Questions?
► What technology and what would it do?
► Can the device meet typical utility standards?
► What price? How procured? What contract form?
► The commercial framework for the device – and
what would it be selling?
► Are there particular Safety and operational issues?
► Where would it be sited – what value could it bring?
► How does this leverage renewable energy?
► Is it possible to operate an energy storage asset
within the Regulations that realises the Market,
Network and Ancillary Service value?
ESCRI-SA
Building the bona-fides of the technology
Kahuku Wind Farm, Hawaii, energy storage system fire, 2012
Photo source; YouTube
ESCRI-SA
Energy Storage in Context
► World installed generation capacity is ≈ 5,500 GW1
► World installed energy storage capacity is ≈ 150 GW
Storage type Technology Installed Capacity (aprox.)
Mechanical Pumped hydro
Compressed air (CAES)
Flywheel
142,000 MW
435 MW
972 MW
Chemical and
electrochemical
Batteries
Flow batteries
Hydrogen
477 MW
19 MW
3 MW
Electrical Super-capacitors 12 MW
Thermal Molten Salt
Other (chilled water etc)
1237 MW
130 MW
1 All data grid connected, from the US Dept. of Energy Global Energy Storage Database, at:
http://www.energystorageexchange.org/ as at 5 February 2015. This Exchange is hosted by the Sandia National
Laboratories.
ESCRI-SA
History of development
► Global installed energy storage (excl pumped
hydro) – last 40 years
Source: DOE Global Energy Storage Database, Sandia National Laboratories. Images courtesy of Sandia National Laboratories
and Strategen Consulting, LLC . Images have bee rearranged to fit medium.
ESCRI-SA
Storage is not all equal
► Choice depends on; Peak output capacity
Energy stored
Depth of discharge
Response time
Cycle efficiency
Discharge efficiency
Number of cycles/lifetime
Self discharge
Power/energy density
Contracting terms
Price and return
ESCRI-SA
ESCRI-SA
What some of these look like
Technology: Isothermal Compressed Air Energy
Storage (ICAES) – Pilot Project
Nameplate power output: 1.5 MW
Energy capacity: 1.5 MWh
Technology Supplier: SustainX
Asset Owner: SustainX
Location: USA
Uses: Renewable output time shifting and
integration, transmission line congestion relief
Technology: Flywheel energy storage (FES)
Nameplate power output: 20 MW
Energy capacity: 5 MWh
Technology Supplier: Beacon Power
Asset Owner: Spindle Grid Regulation, LLC
Location: USA
Uses: Grid frequency regulation
Source: DOE Global Energy Storage Database, Sandia National Laboratories and formal web sites for either the
project or the technology supplier. Note that data accuracy could not be verified.
ESCRI-SA
What some of these look like
Technology: Lead Acid Battery
Nameplate power output: 4.5 MW
Energy capacity: 10.5 MWh
Technology Supplier: Shin-Kobe Electric Machinery Co.
Asset Owner: Kuroshio Power
Location: Japan
Uses: Wind farm capacity firming
Technology: Vanadium Redox Flow Battery
Nameplate power output: 600 kW
Energy capacity: 3.6 MWh
Technology Supplier: Prudent Energy Corporation
Asset Owner: Prudent Energy Services
Location: USA
Uses: Peak shaving and demand charge avoidance
Source: DOE Global Energy Storage Database, Sandia National Laboratories and formal web sites for either the
project or the technology supplier. WorleyParsons could not verify data accuracy.
ESCRI-SA
ESCRI Phase 1 – Regulation
► Such an asset would be subject to the National
Electricity Law and National Electricity Rules
Good news is that there appears no impediment to an
energy storage device realising multiple revenue streams
Bad news is that just how depends very much on what it
does, who owns it and how it connects – there is some
precedent (pumped hydro), but also complexity, including;
- The best registration path (market/non-market generator,
scheduled/semi-scheduled/unscheduled generator)
- Consideration of Transmission Use of System (TUOS) charges,
Marginal Loss Factors (MLFs), ability or desire to provide market
ancillary services (such as FCAS, SRAS or NSCAS)
- In realising a Network benefit value, the Regulatory Investment
Test (RIT-T) process likely applies and potentially limits trading
value, depending on ownership and function
ESCRI-SA
ESCRI Phase 1 – Initial Siting
► Siting aimed to maximise
the overall business case
for the asset
► Started with broad
selection criterion, and
slowly rationalised to
most valuable/practical
► Two layers of screening
to select target sites
► Benefit quantification to
try & rationalise selection
Benefits ultimately used in screening
Category Benefit class
Generated
Energy Value
1. Energy Trading Value
2. Marginal Loss Factor (MLF) Impact
Network
Support
(due to
reliability
constraints)
1. Network Augmentation Capital
Deferral
2. Localised Frequency Support
3. Expected Unserved Energy (USE)
reduction
Network
Support
(to increase
Market Benefit)
1. Heywood Interconnector Constraint
Reduction
2. Murraylink Interconnector Constraint
Reduction
3. Local Generator Constraint
Reduction
4. Grid Support Cost Reduction
5. System Frequency Support
6. Avoided Wind Farm Frequency and
Control Ancillary Service (FCAS)
obligation
ESCRI-SA
ESCRI Phase 1 – Initial Siting
► Initial siting suggested
three locations;
Eyre Peninsula
Riverland
Yorke Peninsula
► Of which three locations
were chosen;
1. Port Lincoln terminal Sub.
2. Dalrymple Substation
3. Monash Substation
► Ultimately very iterative
process
ESCRI-SA
ESCRI Phase 1 – Functional Specification
► A mathematical model of the asset has been built,
which allows simulation against financial metrics
► Allows functional algorithms to be tested and
trialled, across 100s of technology and size options
Storage parameters can be optimised within technology constraints
Various energy time shift algorithms can be tried
Differences between sites can be calculated
► Used to determine basic functional Specifications
ESCRI-SA
ESCRI Phase 1 – Procurement and Price
► A formal RFI was issued on 11 May to forty two
interested parties (in and outside of Australia);
Seeking information on pricing,
procurement preferences,
technology capability, warranties
etc. on LSTK EPC terms
Essentially a draft Specification was
issued, seeking a storage device
between 5-10MWpk & 20–200MWh
at typical utility standards
Concept is to short-list for potential
Phase 2 tendering and to assist in
confirming final business case
ESCRI-SA
ESCRI Phase 1 – Commercial Framework
► There is a tension
between network and
energy trading value
► Ownership is critical in
determining operation
and commercials
Could be owned by a TNSP, specialist 3rd party or
generator/gen-tailer
Functional hierarchy may influence the best owner for
such a device – who has dispatch rights and when?
Trading could be sold or leased, but if owned by a
regulated business there may be a limitation on revenue
ESCRI-SA
ESCRI Phase 1 – Knowledge Sharing
► Knowledge sharing material will likely begin appearing around August, and include; A final business case report including the regulatory,
siting, commercial framework and essential business case for the asset and how this could be used to increase renewable energy supply
A state-of-the-art report on Energy Storage use globally
A functioning version of the mathematical model for people to use for evaluations
The Functional Specification document, once feedback from the market has been received
Recommendations on road-blocks and how these might be overcome
A series of presentations at key forums
ESCRI-SA
ESCRI Phase 1 – Conclusions so far
► Basic conclusions to date include; There are few precedents in Australia – but even
internationally the market is still in its infancy
There is potential to leverage diverse value from storage within the NEM, within the current rules
The issues can be complex – especially defining role(s) and commercial arrangements, and many technology choices with different strengths/weaknesses
There is no simple optimum asset – an iterative process is required to establish the what, where and who
Yet to conclude on “storage and renewables”, with early work favouring a straight market role for initial storage assets
Storage appears a more complex asset, perhaps requiring long term a rethink of certain constraints and market concepts to be most effective for consumers
DISCLAIMER
This presentation has been prepared by representatives of AGL, ElectraNet and WorleyParsons.
The presentation contains the professional and personal opinions of the presenter, which are given in good faith. As such, opinions presented
herein may not always necessarily reflect the position of either AGL, ElectraNet or WorleyParsons, their officers or executive.
Any forward-looking statements included in this presentation will involve subjective judgment and analysis and are subject to uncertainties,
risks and contingencies—many of which are outside the control of, and may be unknown to, AGL, ElectraNet or WorleyParsons.
AGL, ElectraNet and WorleyParsons and all associated entities and representatives make no representation or warranty as to the accuracy,
reliability or completeness of information in this document and do not take responsibility for updating any information or correcting any error or
omission that may become apparent after this document has been issued.
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liability—direct, indirect or consequential (and whether or not arising out of the negligence, default or lack of care of AGL, ElectraNet or
WorleyParsons and/or any of their agents)—for any loss or damage suffered by a recipient or other persons arising out of, or in connection
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