StorageVET Applications and Demonstration - EPRI EPRI StorageVET... · StorageVET® Introduction -...

© 2017 Electric Power Research Institute, Inc. All rights reserved.

Ben Kaun, Program Manager

Giovanni Damato, Senior Project Manager

CPUC/CEC Joint Workshop

November 2, 2017

10:00AM

StorageVET® Applications

and DemonstrationEnergy Storage Valuation Workshop

2© 2017 Electric Power Research Institute, Inc. All rights reserved.

Today’s Workshop Objectives

1. Explain StorageVET® capabilities and methodology

2. Provide concrete illustrations of StorageVET to evaluate

energy storage project cost-effectiveness

3. Provide access and engagement instructions

4. Answer audience StorageVET questions and dive deeper

into issues of interest


Agenda

CEC Greeting - Mike Gravely, Energy Commission 10:00-10:05am

Meeting Objectives and EPRI Introduction - Ben Kaun, EPRI 10:05-10:15am

StorageVET® Introduction - Giovanni Damato, EPRI 10:15-10:30am

Use Case Analyses with StorageVET - Miles Evans, EPRI and

Ram Ravikumar, EPRI10:30-12:15pm

User Engagement - Giovanni Damato, EPRI and Udi Helman,

Helman Analytics12:15-12:30pm

Lunch 12:30-1:30pm

User Q&A and Advanced Training - Giovanni Damato, EPRI 1:30-3:00pm


StorageVET Use Cases—Sneak Peak


Energy Storage Use Cases – Focus for Today’s Workshop

Generation:

Peaker

Substitution

Distribution:

Substation

Upgrade Deferral

Commercial &

Industrial (C&I)

Storage


StorageVET Use Case Demos – Focus on Value Stacking

Peaker Substitution

• Gas Peaker Substitution

• Energy Storage vs Conventional Capacity Resources

• Capacity, frequency regulation, spinning reserves and energy time shift

C&I Storage

• Customer-sited Commercial & Industrial (C&I) Storage

• SGIP Incentive

• Sensitive to TOU rate structure, demand charges and load profile

T&D Deferral

• Distribution feeder with thermal violations due to load growth

• Substation deferral with market services with 20 years horizon


EPRI Energy Storage Program Overview


EPRI’s Public Benefit Mission

Advancing safe, reliable, affordable and environmentally

responsible electricity for society

through global collaboration, thought leadership

and science & technology innovation


Getting the Data

Specify relevant data to

safety, reliability, value

Consistent comparison

Performance/reliability track

record

PERFORMANCE AND

RELIABILITY DATA

EPRI Energy Storage Program Objectives:

Support Energy Storage Transition from R&D to Operations

OPERATIONAL

EXPERIENCE

Putting into Practice

Guidelines for deployment

Customized tools

Technical training

Analyzing the Options

Identify and screen

opportunities

Feasible and optimal location

Design for optimal lifecycle

value

MODELING


More than Batteries: Facilitating Grid-Ready Energy Storage

Systems

Integrated Product

• Ensure safety and reliability

• Understand cost and performance

• Simplify procurement and operation through standardization of specification and interfaces

Storage Technology

• Explore technology tradeoffs

• Optimize technology for utilityapplications

Power Electronics

• Guide common functionsand control algorithms

• Ensure efficient and reliable operation

Project Deployment

• Establish best practices forsiting and permitting

• Standardize grid connection

• Communication and control

Communications and Control

• Developing operational anddispatch algorithms

• Updated communications and grid controllers to accommodate storage functions and services


Identify Gaps

Define Work Needed

Develop products together

Industry review

Publish / collect

experiences

Collaboratively Building Reference Tools through the

Energy Storage Integration Council (ESIC)

Started in 2013, >1000 participants from utilities, suppliers and research community

Seven (7) published products at ESIC

website: www.epri.com/esic

http://www.epri.com/esic


StorageVET Introduction


Challenges to Modeling Storage

Storage and limited energy resources are still not common

Rules and regulations still are evolving

Benefit stacking is appealing, but will it be possible

– More services = more value

– More services = more requirements Can they be satisfied?

Locational value of storage requires site-specific analysis

Complex optimization between storage degradation and service participation scheduling


Storage Made Easy: StorageVET Paving the Way

2013 CPUC Cost Effectiveness Study using EPRI’s ESVT

StorageVET Live in 2016

Integrated Value + Impact Energy Storage Modeling in 2017

StorageVET Expanded Footprint and Validation

2020 Goal:

Make

Storage…


StorageVET ®

Storage Value Estimation Tool: www.storagevet.com

Web-hosted tool, free to the public

Project cost-benefit analysis

Time-series constraints and dispatch optimization simulation

Multi-services optimization and stacked services

Customizable for location, technology, sizing, use cases

Made possible through funding support from the California Energy Commission (CEC)

Accessible Transparent

Validated Customizable

StorageVET Goals

http://www.storagevet.com/


Users of StorageVET® Today

Locating & Screening

Sizing/Designing (stacked services)

Operational Strategies

(Customer and Grid)

Key Use Cases Common Communication Platform

• Sales, Marketing,

RFP Response

• Bill Savings Assessment

• Product Selection

• Screening, Design,

Procurement, & Operations

• Common Benchmarking Tool

Regulators Utilities

DevelopersCustomers


StorageVET In Action: California Examples

Multiple-Use Applications (MUA)

Self-Generation Incentive Program (SGIP)

Distributed Energy Resource (DER) Hosting Capacity

DER and Microgrid Valuation

Renewable Portfolio Standard (RPS)


Use Case Analyses with StorageVET

Miles Evans, EPRI

Ram Ravikumar, EPRI

Use Cases Are Illustrative Only, Do Not Cite


How does a customer economically justify

storage?

Customer Storage


Commercial & Industrial (C&I) Storage


Customer-sited Services


Customer Storage - Introduction

Customer-sited energy storage for demand charge reduction

– Not performing energy time shift

– Reserve SOC because load uncertain

There are ‘soft’ reasons for customer-sited ES, including

corporate goals or maintaining a green image.


Customer Storage Benefits

Incentives - SGIP

– Additional 20% if equipment comes from approved CA

manufacturer


Customer Storage Design and Costs

Large Office in San Diego examines a customer-sited ESS

for demand charge reduction

– ESS can also shift load from peak hours to off-peak

Design:

– Power Capacity: 250 kW

– Energy Capacity: 500 kWh (2 hrs at rated power)

Cost– Total Installed Cost: $400,000 ($800/kWh*, $400/kWh replacements)

This ESS is servicing a large office load**

*Greentech Media Research’s Q2 2017 Energy Storage Monitor Report – low end**OpenEI San Diego Large Office


Assumptions

ESS round-trip efficiency = 85%

No Auxiliary Power or Self-discharge

No O&M Costs

ES not net-metered

SDG&E AL-TOU Secondary (>500kW) rates

– Static over time

No Demand Response participation or backup power


Demand Charges

Two additive monthly demand charges

– Facility demand charge (all times)

$24.51/kW

– On-peak demand charge

$21.13/kW summer

$7.57/kW winter

Flat fee of $465.74/mo

– Only $116.44/mo if load <500kW

– Edge case for energy storage here


Energy Charges

SDG&E AL-TOU Secondary

(>500kW) rates

Summer

𝑃𝑃𝑒𝑎𝑘 − 𝑃𝑂𝑓𝑓𝑝𝑒𝑎𝑘 = 4.059¢/kWh

Winter

𝑃𝑃𝑒𝑎𝑘 − 𝑃𝑜𝑓𝑓𝑝𝑒𝑎𝑘 = 3.697 ¢/kWh

These are enough to overcome

efficiency losses but maybe not

degradation losses

¢/kWh Winter SummerHour of Day Weekday Weekend Weekday Weekend

1

7.322

7.322

8.148

8.148

2

3

45

6

9.464

11.2337

8

9

12.207

10

11

12

13

14

15

16

11.233

17

11.01918

19

209.464

21

22

7.322 8.14823

24


Operational Results – StorageVET™

0

200

400

600

800

1000

1200

1400

1600

0 2000 4000 6000 8000

Load P

ow

er

(kW

)

Time (hrs)

Yearly Peak on Oct 6


Operational Results – StorageVET™

Image of peak day load profile before and after

0

200

400

600

800

1000

1200

1400

1600

0 20 40 60 80

Load P

ow

er

(kW

)

Time (hrs)

Original Peak Load

Modified Peak Load

This month, the battery saved $4615 in

demand charges


Financial Results

Demand Charge

Reduction, $506

Energy Time Shift, $25

Net Taxes, $60

SGIP, $220

Capital Cost, $455

$0

$100

$200

$300

$400

$500

$600

$700

$800

Cost Benefit

Th

ou

san

ds

Illustrative – Do not cite


Financial Results

ESS shifted enough load from peak hours to off-peak hours

to reduce energy charges by $26,880 over 10 years

– Dispatch not optimized against cycling degradation cost

– SOC not bounded

Break-even cost of storage:

$1,383/kWh


Financial Results

20% SOC

Reservation

No Energy Time

Shift

Demand Charge

Reduction, $457

Net Taxes,

$18

SGIP, $220

Capital Cost, $455

$0

$100

$200

$300

$400

$500

$600

$700

$800

Cost Benefit

Th

ou

san

ds



PV + Storage in StorageVET®

Demand Charge

Reduction

Energy Time Shift

Net Tax

Interest

Principal

Initial Capital Cost

SGIP

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

Cost Benefit

-400

-200

0

200

400

600

800

1000

1200

1400

2017-08-01 0:00 2017-08-02 0:00

AC

Po

we

r (k

W)

Storage

Net Load

PV


Does the benefit of deferring an upgrade

outweigh the cost of energy storage?

Substation Upgrade

Deferral


Distribution Storage


Substation Upgrade Deferral

Feeder thermal violations due to load growth

– Only a few hours a year

Either upgrade the substation or install storage to discharge

during peak hours and defer upgrade.

– Load will continue to grow and necessitate upgrades in the future

Storage can provide other services, including frequency

regulation, spinning reserve, energy time shift, and resource

adequacy

Analysis horizon = 20 years for all cases


Substation Upgrade Deferral

0

2

4

6

8

10

12

14

16

0 1000 2000 3000 4000 5000 6000 7000 8000 9000

Pow

er

(MW

)

Hour of Year

2022 Feeder Load

Thermal Limit


Substation Upgrade Deferral Cost-Benefit

Costs– ESS Installed Cost (2MW, 2hr) = $3,200,000 ($1,600/kW)*

– ESS Installed Cost (2MW, 4hr) = $4,600,000 ($2,300/kW)*

– Fixed Operating Cost = $19.5/kW-yr

Primary Benefit: Substation XFMR Upgrade Deferral– 14 MVA to 28 MVA upgrade

Upgrade cost = $5.5M**Carrying cost (12%/yr***) = $660,000/yr

Secondary Benefits– Southern CA 2015 frequency regulation prices– SCE DLAP 2015 energy prices

– Spinning reserve offered when available

*EPRI 2016 ES Cost Study for Utility Planning

**Based on SCE 15MVA to 28MVA upgrade in 2016 link

***From Scottmadden study link

http://www3.sce.com/sscc/law/dis/dbattach5e.nsf/0/64C26E22579296A68825802100663852/$FILE/SCE02V03.pdf

https://www.scottmadden.com/wp-content/uploads/userFiles/misc/13c5e07bac0f5cea7e3dcce6c128cd56.pdf


Substation Upgrade Deferral StorageVET™ Results

Preliminary – Do Not Cite

Illustrative – Do not cite Upgrade Deferred until 2022

Upgrade deferral benefits

do not cover costs alone

• Need stacked value from

this MUA to be beneficial

Results sensitive to market

conditions over 20 years

Results do not consider

potential benefits from:

Resource Adequacy

Capacity

Flexible Ramping

Real-time market

participation

Upgrade Deferral

Net Energy Revenue

Frequency Regulation

Capital Cost

Replacement Cost

O&M

Net Tax

0

1

2

3

4

5

6

Costs Benefits

Mill

ions

$1600/kW

2MW, 4MWh

Net Benefit ~ $500,000


Deferral limits

4

6

8

10

12

14

16

2017-04-25 0:00 2017-04-26 0:00 2017-04-27 0:00 2017-04-28 0:00

2022 Peak Power Day

Power = 1.02 MWEnergy = 3.09 MWh

Failure to defer not from peak load day


Deferral limits

4

6

8

10

12

14

16

2017-06-06 0:00 2017-06-07 0:00 2017-06-08 0:00 2017-06-09 0:00

2022 Energy-Limiting Day

Power = 0.911 MWEnergy = 3.93 MWh


Deferral with 4hr Energy Storage



Upgrade Deferral


Capital Cost

Replacement Cost

O&M

Net Tax

-1

0

1

2

3

4

5

6

7

8

Costs Benefits

Mill

ions

$2300/kW

2MW, 8MWh

Net Benefit ~ $1M

Upgrade deferred from

2017 to 2030

Higher costs due to larger

ESS and more

replacements over 20 years


Substation Upgrade Deferral Conclusions

In this example, storage needs stacked benefits to break

even

– Can provide flexible ramping, RTM participation, primary frequency

response, and resource adequacy capacity (all not considered)

Batteries have small footprint, so can be added to already-

owned property relatively easily

– Need to decide on how to prioritize land

– ESSs have the potential to be moved, but not often done in practice


What is the net cost of resource adequacy from

energy storage?

Peaker Substitution

Economics Example


Generation: Standalone Storage


Resource Adequacy Services


Peaker Substitution – Overview and Illustrative Economic

Case

Primary service: resource adequacy

Secondary services: frequency regulation, spinning reserves, and energy time shift

Alamitos Energy Storage– Economic 100MW peaker substitution with grid

services contracted in LA Basin

Aliso Canyon gas leak caused emergency resource adequacy problem, due to peaking gas delivery constraint– 6 month development vs years for CT if it were

an option

Tesla Battery in Southern California


What is the Net Cost of Resource Adequacy?

Combustion Turbine (CT) vs Energy Storage System ESS

– Find the minimum RA payments required to cover all costs after receiving market benefits

– 𝑁𝑒𝑡 𝐶𝑜𝑠𝑡 𝑜𝑓 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦∗ = 𝑃𝑉 𝑅𝐴 𝑝𝑎𝑦𝑚𝑒𝑛𝑡𝑠 = 𝑃𝑉 𝐶𝑜𝑠𝑡𝑠 −𝑃𝑉 𝐵𝑒𝑛𝑒𝑓𝑖𝑡

Compare CT net cost of capacity to ESS net cost of capacity

* Also called Net cost of new entry (Net CONE)

Total PV

Costs

Total PV

Benefits

Net Cost

Costs Benefits Net Cost

Valu

e

Benefits

– Energy prices are LMPs from SCE

• 2016/17: historical LMPs

• 2024: CAISO LTPP model results for RPS 33% and RPS 40% scenarios

• After that, energy and market revenues grow with inflation (2%/yr)

– Frequency Regulation and Spinning Reserve prices from CAISO southern region

incremented by 2%/yr


Costs

Battery Costs (100MW, 400MWh)

– $1600/kW – $2700/kW Installed Cost*

– $250/kWh Replacement Cost

– 1.5% per year Fixed Operating Costs

CT Costs (100MW) – based on GE LMS100PA

– $1305/kW Installed Cost **

– 0.9% per year Fixed Operating Costs

– $5.9/MWh Variable Operating Costs***

– Historical fuel prices (not important due to low capacity factor)

*EPRI 2016 ES Cost Study for Utility Planning low and high end **CEC 2017 Estimated Cost of New Renewable and Fossil Generation in California***Reciprocating Internal Combustion Engine Study: 2016 Review. EPRI, Palo Alto, CA: 2016. 3002008269.


Dispatch Requirements

In StorageVET® ESS and CT dispatch based on energy and

ancillary services prices

ES is free to co-optimize services other than RA

CT can provide energy, frequency regulation, and spinning

reserves when profitable to turn on (~1.5% capacity factor)


Standalone Peaker Substitution Economics (StorageVET)Assumes 3rd Party Developer-Owned Business Model


Net Cost of Resource Adequacy

Net Energy Revenue


O&MO&M

Net Tax

Net Tax

Interest

Interest

Principal

Principal

Initial Capital Expenses


Replacement Expenses

$-

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00

$350.00

ESS Cost ESS Benefit ESS Net Cost CT Net Cost CT Benefit CT Cost

Mill

ions

2016/17: Historical Energy and Ancillary Services Prices

2024: CAISO’s LTPP RPS 33% Model Projections EPRI 2016 ES Cost Study For Utility Planning High-End ES Prices

Net cost of resource adequacy

comparison for high-cost ESS vs CT


Standalone Peaker Substitution Economics (StorageVET)Assumes 3rd Party Developer-Owned Business Model


Net Cost of Resource Adequacy

Net Energy Revenue


O&M

Net Tax

Interest

Principal


Replacement Expenses

CT Net Cost

$-

$50.00

$100.00

$150.00

$200.00

$250.00

ESS Cost ESS Benefit ESS Net Cost

Mill

ions

Lower net cost of

resource adequacy

capacity due to low ESS

costs


Net Cost of Capacity Sensitivity to Renewable Penetration

-10

10

30

50

70

90

110

130

2016Incremented

33% RPS 40% RPS RPS 33%(min=0)

RPS 40%(min=0)

Ne

t C

ost o

f C

apa

city (

$/k

W-y

r)

Low ESS Cost High ESS Cost CT Net Cost

Net Profit,

Not Cost

Illustrative – Do not citeNet cost of capacity

decreases under higher

renewables scenario

Net cost of capacity

increases when

negative prices are

eliminated


Peaker Substitution - Conclusions

In this example, the net cost of resource adequacy between storage and CT is in the same range but,

– Need to normalize for capacity contribution of each resource

Thermal derating is well-established for fossil generators

Duration derating for energy storage is an under investigation.

Other considerations for battery storage– Fast development timeline

– No gas or water connections

– No emissions

– However, unproven durability

– Participation in real-time market and flexible ramping


StorageVET User Engagement

Giovanni Damato, EPRI

Udi Helman, Helman Analytics


Becoming a StorageVET User

Visit www.storagevet.com for the latest user information

Send an email with subject “StorageVET Account Setup Request”

to [email protected] and [email protected]

Include the following in the email body:

– Name

– Title

– Organization

– Address: Street, City, State, Zip

– Company Email

– Phone xxx-xxx-xxxx

Receive email response within 3-5 business days from Analytica Cloud Player

[email protected] with subject “Invitation to Analytica Cloud Player”


mailto:[email protected]




Engage with the StorageVET® Community

Create a StorageVET® account and build your model

– Visit www.storagevet.com

Browse through User Guides and documents for assistance

– Visit www.storagevet.com/documentation

Engage in ESIC User Community

– Email [email protected] with your information

Give feedback on your models during ESIC StorageVET® Online and

In-person meetings

– ESIC In-person Meeting November 16th Cleveland, OH

Join ESIC Subgroup Validation Efforts, led by industry partners

Research collaborative





ESIC StorageVET Validation

Giovanni Damato, EPRI

Udi Helman, Helman Analytics


Methodology

1. Check StorageVET solutions for different applications

2. Compare model results to other commercial and research

models

3. Compare model results to operational results from

perspective of ISOs and project operators

4. Modify model algorithms as necessary or provide additional

data to adjust results

5. Update StorageVET documentation


General approach

Start from more simple and proceed to more complex

– Energy arbitrage (day-ahead)

– Regulation only (CAISO NGR-REM; other ISO Regulation only models)

– Energy + Regulation co-optimized (CAISO NGR)

– Energy + Regulation + Spinning Reserve co-optimized (CAISO NGR)

– Same as above with generic and flexible RA capacity obligations

(CPUC/CAISO capacity obligations in day-ahead market)

– Real-time energy and ramping reserves

Once the wholesale market applications have been evaluated,

address distribution-connected, customer-sited, and multiple use

applications


Why model historical market revenues?

Accurate historical day-ahead and real-time market prices

and market value are a baseline for future price and value

projections

Users can validate model results using historical prices

against actual revenues of operating projects

However, historical revenues are not necessarily a guide to

future value due to rapidly changing system conditions


Energy arbitrage, SCE LAP prices, 2014-2017, perfect

foresight, 83.3% efficiency

System

Specifications

2014 Revenue

2015

Revenue

2016

Revenue

2017

Revenue,

Jan. – June

1 MW, 1 hr $9,363 $8,616 $11,746 $11,354

1 MW, 2 hr $16,257 $14,972 $20,472 $19,113

1 MW, 4 hr $24,808 $21,939 $30,026 $27,151

1 MW, 6 hr $30,229 $26,072 $34,946 $32,281


Energy arbitrage, SCE LAP prices, 2014-2017, perfect

foresight, 83.3% efficiency

0.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

35,000.00

40,000.00

1 MW, 1hr 1 MW, 2hr 1 MW, 4hr 1 MW, 6hr

An

nu

al

en

erg

y re

ve

nu

e

2014

2015

2016

2017, Jan-Jun


Energy arbitrage, SCE IFM LAP prices, 2017, January -

June, perfect foresight, 60% - 100% efficiency


Persistence result (prior weekday/prior weekend day), energy

arbitrage, SCE IFM LAP prices, 2015, 83.3% efficiency

0

5,000

10,000

15,000

20,000

25,000

1 MW 1hr 1 MW 2hr 1 MW 4hr 1 MW 6hr

An

nu

al r

ev

en

ue

s ($

/ye

ar)

Fully Optimal DA Revenue Only Weekday/Weekend day persistence

90% of perfect foresight value captured

in persistence calculation


All results are available on the ESIC collaboration site

All inputs and outputs shown on prior slides are now

available on ESIC collaboration site:

https://collab.epri.com/esic

Review and comparison to your own results are requested

https://collab.epri.com/esic


12:30-1:30PM

Lunch


1:30-3:00PM

User Q&A and Advanced

Training Session


Together…Shaping the Future of Electricity

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