Integrated Distributed Solar and Storage
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  • 1. Integra7ng
Distributed
Solar
and
Storage

 A
Compelling
Value
Proposi>on
to
Realizing
a
Smarter
Grid
 Janice
Lin
|
Managing
Partner
of
StrateGen
Consul7ng,
Director
CA
Energy
Storage
Alliance

 September
29,
2009
 San
Diego
Solar
Energy
Conference


  • 2. Agenda
 1.  StrateGen
Consul>ng
and
CESA
Overview

 2.  Energy
Storage
and
California’s
Smart
Grid

 3.  Ra>onale
for
Early
Focus
on
Distributed
Applica>ons
 4.  The
Value
Proposi>on
for
Integra>ng
Distributed
PV
and
Storage

 5.  Energy
Storage
Market
Barriers
and
Policy
Recommenda>ons
 6.  Summary

 1

  • 3. StrateGen
Overview
 StrateGen
helps
businesses
create
sustainable
value

 through
clean
energy
solu7ons
 Smart
Grids
 Enernex
 Structured
Finance

 Energy
Controls
 HMH
Energy
Resources
 StrateGen
Core
Team
 Ron
Hofmann
 » Deep
industry
knowledge
in
clean
 Regulatory
 energy;
core
focus
on
solar
&
storage
 » Strong
analy>cal
and
financial
 Solar
Advisory
 Barkovich
&
Yap,
Inc

 Andy
Skumanich
 Douglass
&
Liddell
 capabili>es

 Lori
Mitchell
 Roger
Levy
 » Strategic
management
exper>se
 » Product
development
and
project
 Energy

 construc>on
experience
 Market
Research
 Efficiency
 » Project
leadership
and
management
 
American
LIVES,
Inc.
 ConSol
 
New
Heights
Research
 Corporate
 Sustainability
 Tyler
Elm
 2

  • 4. StrateGen
Overview:
Our
Clients
 Our
clients
represent
a
wide
range
of
organiza7ons,
including
those
 central
to
the
clean
energy
market,
and
those
trying
to
enter
 U.S. Department of Energy 3

  • 5. The
California
Energy
Storage
Alliance
(CESA)
 Our
Goal:
 Expand
the
role
of
storage
technology
to
promote
the
growth
of
 renewable
energy
and
create
a
more
stable,
secure
electric
system

 »  CA‐focused
advocacy
group
represen>ng
 energy
storage
stakeholders

 »  Focus
on
storage
coupled
with
renewable
 energy
integrated
into
the
smart
grid
 »  Current
priori>es/ac>vi>es
include:
 –  CPUC

 •  SGIP
AES
implementa>on

 •  DG
(DER)
cost
benefit
methodology
 •  Smart
Grid
OIR

 –  Storage
legisla>on:
SB
412,
SB
14,
AB
44
 –  CEC
Integrated
Energy
Policy
Report
planning
 –  CAISO
Implementa>on
of
FERC
order
719
and
 890
 –  Vision
for
Storage
in
CA!

 4

  • 6. Energy
Storage
is
a
key
enabling
technology
 Smart
Grid
 Renewables
Integra7on
 “Our
expecta7on
is
that
 this
[smart
grid]
network
 will
be
100
or
1,000
7mes
 larger
than
the
Internet”
 












‐
Cisco,
May
2009 Peak
Load
Growth
 Transmission
Constraints
 5

  • 7. Storage
is
a
necessary
component
of
the
smart
grid
 Transmission Distribution Load Serving Operator Operator Entity Industrial Customer Distributed Resources Commercial Customer Energy Substation Storage Microgrid / Residential Customer Multi- Other sustainable communities Dwelling Unit Substations 6
 Diagram courtesy of PG&E
  • 8. Storage
is
a
necessary
component
of
the
smart
grid
 Commercial & Industrial Transmission Distribution Load Serving Operator Operator Entity Industrial Customer Distributed Resources Commercial Customer Energy Substation Storage Substation Microgrid / Residential Customer Multi- Other sustainable communities Dwelling Unit Transmission Scale Substations Microgrid Residential 7
 Diagram courtesy of PG&E
  • 9. 

Energy
Storage
Reduces
GHG
Emissions
 Percent
CO2
/
MWh
 Reduc7on
Shi_ing
 Peak vs. Off-peak CO2 Emission Rate* (Tons/MWh) from
Peak
to
Off‐Peak:
 Afternoon - Heavy A/C Use Peaker Plants SCE:

33%
reduc7on
 PG&E:

26%
reduc7on
 SDG&E:
32%
reduc7on
 Other times - Very Little A/C Use Also
~56%
lower
NOx
 Better Use of Utility Assets emissions
 E3 Calculator Tons CO2 / MWh Summer Summer Summer On-Peak Mid-Peak Off-Peak *Southern California Edison Data Utility PG&E 0.6709 0.6068 0.4949 SCE 8
 0.7247 0.6322 0.4862 SDG&E 0.6872 0.5807 0.4705
  • 10. Energy
Storage
Framework
for
California

 Phase
I
 Phase
II

 Phase
III
 Start
with
smaller
customer
sited
 Couple
with
distributed
 Demonstrate
large
scale
 storage,
linked
with
AMI

 wholesale

(higher
value
FiT
or
 transmission
level
 U>lity
owned
storage
 PPA)
 storage
(50‐100MW+/ demonstra>ons
–
capital
deferral 
 Demonstrate
storage
as
key
 site)
 20
MW
ancillary
services
storage
 enabler
of
sustainable
 Accelerate
distributed
 demonstra>ons
with
CA
ISO

 microgrids
 storage
deployment
for
 mul>ple
applica>ons

 2009‐2011
 2012‐2015
 2015‐2020
 Goal: 25-100 MW deployed 100-500 MW deployed 1,500 MW+ deployed 9

  • 11. Ra7onale
for
Early
Focus
on
Distributed
Applica7ons

 Distributed
applica7ons
offer
the
poten7al
to
capture
and
bundle
the

 greatest
number
of
value
streams
 Customer + Utility + System Operator + Society • Reduced
energy
 • Integ
of
renewables
 • Ancillary
services
 • More
 and
demand
costs
 • Load
leveling
 • Grid
integra>on
 renewables
 • Emerg.
back
up
 • T&D
relief
/
deferral

 • Improved
grid
 • Fewer
emissions
 • Demand
response
 • Improved
power
 reliability
&
 • Lower
power
 • Improved
 quality
 security
 costs
 reliability
 • Reduced
peak
&
 • More
jobs
 spinning
reserve
 requirements
 10

  • 12. Conceptual
Overview
of
Storage
+
PV
(1+1=3)

 Distributed
Solar
+
Storage
 Poten7al
Value
Streams
 Base
load
 »  Charge
during
off‐peak
and
discharge
during
 peak
to
reduce
demand
charges

 »  Firm
up
addi>onal
demand
savings
from
 Load
&
Solar
 Genera>on
 renewables
 »  Can
share
inverter
/
power
condi>oning
 equipment
with
solar
or
other
renewables
 »  Poten>al
to
act
as
dispatchable
power
for
 Net
Load
is
S>ll
 u>lity
demand‐response
 Coincident
with
 Peak
Demand
 »  Can
shik
peak
demand
 Charges

 »  Poten>al
to
leverage
SGIP
and
FITC
for
both
 technologies
 »  Poten>al
to
provide
emergency
back
up
 Storage
to
Shik
 capabili>es

 Net
Peak
Load
to
 Off
Peak
Periods
 11
 11

  • 13. Distributed
Applica7ons
Are
U7lity‐Scale
 Small
distributed
systems
can
have
a
grid‐scale
impact
 Substation Sited Storage Demand Curve after Typical Summer Implementation of Daily Demand for 3,000 MW solar CA-ISO Region 44 42 Peak - Shaving Impact of 13 GWh storage 40 Equivalent to 5 kWh Storage for each kW CA Generation (GW) Customer Sited 38 Installed Solar 36 34 32 30 28 26 24 0 6 12 18 24 Hour of Day Source: EPRI 12

  • 14. Value
Proposi7on:
Our
Approach
 We
have
extensively
analyzed
the
drivers
of
value
for
storage
coupled
 with
PV.

We’ll
present
results
of
the
base
case
and
sensi7vi7es.
 » Select

a
specific
applica>on/customer
site
 » Model
the
value
proposi>on
of
standalone
PV
system
for
the
site
 » Design
a
hypothe>cal
energy
storage
system
to
be
paired
with
the
 specific
site
and
PV
system
 » Model
the
value
proposi>on
of
integrated
PV
and
storage

 » Run
key
sensi>vi>es
to
incen>ves
and
other
project
specifica>ons
 The
base
case
for
PV
Only
and
PV
+
Storage
are
presented
on
the
 following
pages
 13

  • 15. Value
Proposi7on:
PV
Only
Base
Case
 PV
Only
Base
Case:
A
350
kW
PV
system
has
a
5.9%
IRR
from
avoided
 energy
costs
 Key
Assump7ons
 Load
Shape
Impacts
 »  Use:
customer‐sited
350kW
rookop
PV
 system
 »  All‐equity
turnkey
purchase
 »  CAPEX:
$5,000/kW
DC

 »  O&M:
$15/kW/yr


 »  Incen>ves:
   30%
FITC

   $0.22
CSI
PBI
   5
Year
MACRS
Deprecia>on
 Results
 Load
&
PV
Output
 »  Aker
Tax
IRR:
5.9%
 »  High
school
load
profile
in
California
 »  Simple
Payback:
12
years
 »  PVWaps
20deg
fixed
>lt
in
So.
Cal.
(1)
 1)  0.5%
annual
degrada>on
factor
&
0.77
derate
factor
 14

  • 16. Value
Proposi7on:
PV
+
Storage
Base
Case
 PV
+
Storage
Base
Case:
A
100kW,
4h
baner
+
350
kW
PV
system
has
a
 7.6%
IRR
from
peak
load
shi_ing
and
PV
avoided
energy
costs
 Key
Assump7ons(1)
 Load
Shape
Impacts
 »  Use:
customer‐sited
storage
system
coupled
 with
a
350kW
PV
system
 »  All‐equity
turnkey
purchase
 »  Bapery
Size:
100kW,
4h
dura>on
 »  Bapery
Round
Trip
AC
Efficiency:
65%

 »  CAPEX:
$475kWh
($2,850/kW)

 »  Variable
O&M:
$0.075/kWh
discharged
(2)


 »  Fixed
O&M:
$6/kW/yr
 »  Incen7ves:
None
 Results
 Storage
Op7mal
Sizing
 »  Aker
Tax
IRR:
7.6%
 »  Analyze
net
peak
load
with
PV
system
 »  Simple
Payback:
11
years
 »  SCE
TOU8
Peak
Period
12PM
–
6PM
 »  Use
storage
to
shave
akernoon

peak
 »  100kW,
4h
bapery
 (1)  SCE TOU8 tariff, CA high school load profile (2)  This cost accounts for replacement costs of battery cells, parasitic loads, and consumables 15

  • 17. CA’s
Energy
Storage
Regulatory
Market
 California’s
regulatory
framework
is
rapidly
evolving
to
accelerate
 deployment
of
storage,
especially
storage
coupled
with
solar

 »  Cri>cal
Peak
Pricing
(CPP)
 »  Self
Genera>on
Incen>ve
Program
(SGIP)
 »  Permanent
Load
Shiking
(PLS)
 »  Federal
Investment
Tax
Credit
(FITC)
 »  CEC
Integrated
Energy
Policy
Report
2009
update
will
include
storage
 »  Poten>al
medium
term
opportuni>es

 •  Emergence
of
Feed
in
Tariff
with
differen>al
rates
for
renewables
coupled
with
storage
 •  Standard
offer
for
PLS

 The
sensi>vity
to
the
first
four
factors
is
explored
on
the
following
pages
 Source:
StrateGen’s
current
regulatory
knowledge

 16

  • 18. CPP:
Cri7cal
Peak
Pricing
Sensi7vity
 The
SCE
TOU8
tariff
is
scheduled
to
convert
to
default
cri7cal
peak
 pricing
(CPP)
in
October
2009
 Non‐CPP
vs.
CPP
Impacts
to
IRR1
 CPP
Overview
 »  CPP
will
be
the
default
tariff
for
SCE
 customers
with
peak
demand
>500kW
in
 October
2009
 »  SCE
will
role
out
CPP
to
smaller
customer
 classes
within
1
to
2
years
 »  Average
of
9
events/yr
(12/yr
max)
during
the
 summer
months
(with
24h
advanced
 no>fica>on)
 »  CPP
Structure:
   On‐peak
energy
charge
:
$1.37/kWh
   Peak
demand
charge
reduced
to
$7.26
 ($19.73
w/o
CPP)
 Modeled
Scenario:
Es>mated
October
 »  Assume
storage
device
can
react
to

and
 2009
SCE
TOU
8
CPP
Tariff prepare
for
24h
no>fica>on
of
CPP
event

 1.  See
Appendix
for
detailed
modeling
assump>ons
 17

  • 19. SGIP:
Evolu7on
of
the
SGIP
 D.
01‐03‐073
 AB
2778

 Nov
2008
 SGIP
established
to
implement
AB
970.
Creates
financial
 Only
wind
and
fuel
 CPUC
concludes
that
AES
systems
 incen>ves
for
distributed
genera>on
technologies
that
provide
 cell
DG
 cannot
be
added
to
the
SGIP
as
 “energy
conserva>on
demand‐side
management
and
other
 technologies
 stand‐alone
technology,
but
do
 ini>a>ves
in
order
to
reduce
demand
for
electricity
and
reduce
 qualify
for
SGIP

 qualify
when
coupled
with
 load
during
peak
demand
periods.”
 eligible
wind
or
fuel
cells
 2001
 2002
 2003
 2004
 2005
 2006
 2007
 2008
 2009
 2010+
 D.02‐04‐004

 AB
2778
 SB

412
 Q1‐Q2
 CPUC
Opinion
reveals
that
 Removes
all
PV
 Restores
CPUC
 An>cipated
 “Legislature
expressed
no
 incen>ves
from
SGIP
 authority
to
add
new
 implementa>on
of
 guidance
on
the
extent
or
 technologies
to
SGIP
 storage
incen>ves
 scope
of
incen>ves
for
 (awai>ng
Gov.
 for
solar
 distributed
genera>on.”
 signature)
 applica>ons
 SGIP
admin
implement
 2008
decision:
storage
 applica>ons
accepeted
 May
8,
2009

 NOTE:
Details
about
current
SGIP
structure
in
appendix
 18

  • 20. SGIP
Energy
Storage
Incen7ve
Structure
 Incen7ve
 Renewable
 Non‐renewable
 Energy
 System
Size
 Structure
 Fuel
Cell
 Fuel
Cell
 Wind
 Storage
 0‐1
MW
 100%
 $4.50
 $2.50
 $1.50
 $2.00
 1‐2
MW
 50%
 $2.25
 $1.25
 $0.75
 $1.00
 2‐3
MW
 25%
 $1.125
 $0.625
 $0.375
 $0.50
 Minimum
technical
opera7ng
parameters:
 »  Ability
to
be
used
daily
in
concert
with
an
on‐site
genera>on
resource,
and
s>ll
meet
its
20‐ year
life>me
requirement.

 »  Ability
to
handle
hundreds
of
par>al
discharge
cycles
each
day.
 »  Ability
to
be
discharged
for
at
least
four
hours
of
its
rated
capacity
to
fully
capture
peak
 load
reduc>ons
in
most
u>lity
service
territories.

 »  Ability
to
meet
Ins>tute
of
Electrical
and
Electronics
Engineers,
Inc.
interconnec>on
 standards.
 »  Must
comply
with
all
local
environmental
and
air
quality
requirements.
 19

  • 21. SGIP:
SGIP
Incen7ve
Sensi7vity
 SGIP
incen7ves
for
solar
+
storage
projects
will
be
very
anrac7ve,
 even
more
anrac7ve
than
standalone
storage
 SGIP
Impacts
to
IRR1
 SGIP
Current
Status
 »  SB
412
(Kehoe,
Blakeslee,
Skinner)
 restores
CPUC
authority
to
add
 technologies
into
the
SGIP

 »  Storage
will
be
explicitly
added,
for
 standalone
applica>ons
as
well
as
 coupled
with
PV
 »  SB
412
awaits
the
Governor’s
signature,
 will
be
effec>ve
January
2010,
subject
to
 CPUC
and
SGIP
working
group
 Modeled
Scenario:
SGIP
@
$2,000/kW
for
 implementa>on
>ming

 Storage 1.  See
Appendix
for
detailed
modeling
assump>ons
 20

  • 22. PLS:
Program
Overview
 »  Permanent
Load
Shiking
(PLS)
is
shiking
energy
from
one
>me
period
to
 another
on
a
permanent
basis.
It
provides
several
system
benefits:
   Reduce
need
for
capacity
investments
   Reduce
likelihood
of
shortages
(was
done
in
response
to
2006
heat
wave)
   Lowered
system
costs
(fewer
peaking
plants)

 »  Main
applica>on
has
been
to
offset
peak
demand
from
A/C
 »  The
CPUC
created
a
program
to
encourage
PLS
because
there
was
no
 incen>ve
to
do
this
(other
than
TOU
rates)
and
PLS
was
caught
in
between
 DR
and
EE
programs,
thus
gexng
few
incen>ves

 »  In
2007
PG&E
and
SCE
implemented
“Shik
and
Save”
programs
to
 implement
this,
with
budgets
of
$10M
each

   These
programs
only
allow
for
Thermal
Energy
Storage
systems
   PG&E
uses
ICE
Energy
exclusively

 21

  • 23. PLS:
PLS
Incen7ve
Sensi7vity
 PLS
doubles
storage’s
IRR,
but
the
California
programs
are
closed
to
 future
RFPs
and
only
thermal
storage
is
currently
eligible
 PLS
Impacts
to
IRR1
 PLS
Current
Status
 »  The
CPUC
issued
a
Final
Decision
for
the
2009‐2011
 Demand
Response
Program
that
ended
further
 RFPs
for
PLS
 »  The
Decision
did,
however,
order
the
u>li>es
and
 Energy
Division
Staff
to
provide
construc>ve
input
 to
future
PLS
programs,
including
a
possible
 ‘standard
offer’
(e.g..
Fixed
$/kW
shiked)


 »  Benefit
for
PV
–
this
incen>ve
could
be
combined
 with
the
CSI
and
possibly
SGIP
incen>ves
as
well
 »  SCE’s
Nightshik
Program
is
currently
only
available
 for
thermal
storage
and
is
closed
to
new
 Modeled
Scenario:
SCE’s
Nightshik
 technologies:
 Program
@
$1,110/kW2   $1,110/kW
   Based
on
a
nominal
ra>ng,
not
peak
ra>ng
similar
to

 a
PTC
ra>ng
for
PV2
 1.  See
Appendix
for
detailed
modeling
assump>ons
 2.  100%
nominal
ra>ng
used
for
the
purposes
of
this
analysis
 22

  • 24. FITC:
FITC
Incen7ve
Sensi7vity
 Storage
may
be
eligible
for
the
FITC
when
coupled
with
PV.
If
so,
it
will
 raise
the
IRR’s
approximately
50%
higher
than
they
are
today
 FITC
Impacts
to
IRR1
 FITC
Current
Status
 »  FITC
is
30%

 »  Chadbourne
&
Parke
has
indicated
that
storage
is
 currently
eligible
for
the
FITC
when
paired
with
 renewables,
but
only
if
charged
by
renewables
and
 not
grid
power
 »  This
par>cular
applica>on
works
well
in
 conjunc>on
with
CPP
tariffs
because
the
bapery
 can
be
charged
on
the
weekend
off‐peak
with
PV
 to
prepare
for
CPP
events
(out
of
scope
for
this
 project)
 »  In
the
future,
the
FITC
may
be
applicable
to
storage
 Modeled
Scenario:
Unrestricted
Grid
 without
these
current
restric>ons
 Charging
@
30%
FITC »  StrateGen’s
model
assumes
storage
can
charge
 unrestricted
from
grid
and
not
from
PV
 1.  See
Appendix
for
detailed
modeling
assump>ons
 23

  • 25. Incen7ves:
Combining
CPP,
SGIP,
&
FITC
 Combining
all
incen7ve
value
streams
has
favorable
financial
 outcomes,
making
Storage
+
PV
a
very
anrac7ve
value
proposi7on
 Combined
Impacts
to
IRR1
 Note:
The
ability
to
combine
and
capture
all
of
these
value
streams
is
 s>ll
specula>ve
pending
clarifica>on
of
programs’
rules
 1.  See
Appendix
for
detailed
modeling
assump>ons
 24

  • 26. Market
Barriers
to
Full
Deployment
of
Energy
Storage
 »  Cost
/
Economics
 – Many
storage
technologies
have
not
demonstrated
scale
economies
 – Analyzing
impact
of
storage,
especially
coupled
with
renewables,
is
very
challenging
 »  Technology
 – Many
solu>ons,
all
with
tradeoffs
 – First
demonstra>ons
of
new
applica>ons
are
difficult
to
implement
 »  Regulatory
/
Policy
 – Difficult
to
aggregate
complete
value
streams
provided
by
storage
 – Percep>on
that
u>lity‐scale
storage
=
large
equipment
only

 – Tariff
design
does
not
reflect
true
cost
of
producing
and
delivering
power
on
peak
 – Incomplete
CA
ISO
implementa>on
of
FERC
Order
890/719
energy
storage
tariff
for
 regula>on

 – Unclear
net
metering
rules
for
storage
+
renewables
projects

 – Storage
is
new
enough
that
it
is
not
yet
considered
in
all
relevant
aspects
of
 regula>on
and
policy
making
 25

  • 27. Energy
storage
is
deserving
of
its
own
asset
class
 category
and
immediate
energy
policy
focus
 Energy Storage Goal: Supply System Demand Optimization Transmission/ Distribution 26

  • 28. Summary
  Storage
is
a
key
enabler
of
the
smart
grid

  Integra>ng
storage
with
PV
can
boost
the
value
proposi>on
of
PV
 significantly
  Many
new
storage
technologies
are
commercially
available
today
  Significant
incen>ve
programs
for
storage
+
PV
will
be
in
place
soon

  With
these
incen>ves,
the
value
proposi>on
will
be
very
aprac>ve
  Now
is
the
>me
to
start
developing
projects

  CESA
needs
the
PV
community’s
help
to
design
effec>ve
policy
for
 integrated
PV
+
storage
projects

  Storage
is
cri>cal
to
many
key
energy
policy
goals
–
it
is
deserving
of
its
 own
asset
class
in
CA
 27

  • 29. For
Further
Informa7on,
Contact:
 28

  • 30. CESA
Policy
Recommenda7ons
(1
of
2) 
 Incen7ves

   “Fully
implement”
SGIP
for
storage
(need
incen>ves
for
standalone
 and
solar
applica>ons)

   Establish
increased
rate
of
return
for
u>lity‐owned
storage,
similar
to
 renewables
treatment
   Long
term
discounted
financing
for
storage


   Tax
incen>ves
comparable
to
solar
and
wind
(ITC
and
MACRS)
 RD&D
Funding

   Accelerate
deployment
of
“integrated”
demonstra>on
projects
under
 various
business
models

   Leverage
PIER
matching
funds
for
federal
ARRA
storage‐related
 proposals
in
California
   Create
California‐based
Energy
Storage
Center
of
Excellence
to
 provide
technical
and
policy
leadership
 29

  • 31. CESA
Policy
Recommenda7ons
(2
of
2) 
 Goal:

Leverage
storage
under
mul7ple
ownership
models
to
help
 enable
the
Smart
Grid,
GHG
reduc7on,
EE,
DR
and
the
RPS
  Include
storage
in
DG,
DR,
EE
cost
benefit
methodologies

  Increase
Feed‐in‐Tariff
cap
and
price
for
renewables
firmed
with
 storage
  Require
storage
(customer,
3rd
party
and/or
u>lity
owned)
as
part
of
 long
term
procurement
process,
including
pursuing
Standard
Offers
for
 Distributed
Energy
Storage
and
pursuing
storage
eligibility
for
next
 Permanent
Load
Shiking
RFP

  Explore
retail
tariff
design
that
encourages
load
shiking
  Implement
energy
storage
tariff
for
regula>on
(FERC
Orders
890
and
 719)
  Consider
a
peak
reduc>on
standard
for
state
agency
power
purchases
  Clarify
net
metering
rules
for
renewable
energy
projects
with
storage
 30

  • 32. Benefits
of
Storage
–
Renewable
Integra7on
 “Enabling
technologies
such
as
fuel
switching
in
‘smart’
appliances,
dispatch‐able
 load
from
plug‐in
hybrid
or
other
electric
vehicles,
or
sta7onary
energy
storage
 would
be
required
to
enable
very
high
levels
of
PV
contribu7on
(>20%)
to
the
 electric
power
system”.
 
 
 
 










 
 
‐
NREL
Denholm
&
Margolis,
April
2006
 “When
PV
penetra7on
reaches
sufficiently
high
levels
(e.g.,
5
to
20%
of
total
 genera7on),
the
interminent
nature
of
PV
can
begin
to
have
no7ceable,
nega7ve
 effects
on
the
en7re
grid”
[requiring
storage] 
 
 











 
 
 
 
 
 
‐
US
DOE,
SEGIS‐ES,
July
2008
 “Storage
will
need
to
be
part
of
our
porwolio
if
going
to
15
to
20
percent
wind
at
a
 na7onal
level,
otherwise
it
won’t
be
efficient
at
a
lower
level
and
it
won’t
get
us
 where
we
want
to
go
environmentally” 
 
 
 











 
 
 
 
 
 
‐
Electric
Power
Research
InsNtute,
March
2009
 31

  • 33. CA’s
RPS
implementa7on
will
increase
the
need
for
 regula7on
and
ramping

 •  Increased wind penetration creates need for greater regulation capacity and faster regulation ramping capability •  Nov ‘07 CAISO report identifies significant additional regulation requirements with 20% renewables (about 10% wind penetration) Ancillary
services
can
be
provided
today
at
20
MW
scale,
and
from
systems
as
 small
as
1
MW
on
the
customer
side
of
the
meter

 32

  • 34. Value
Proposi7on
–
Framework


 We
will
now
examine
the
other
storage‐specific
drivers
to
customer‐ sited
energy
storage
systems
paired
with
PV

 1.  StrateGen’s
Approach
to
Energy
Storage
Modeling
 2.  Primary
Drivers
of
Value
 3.  Base
Case
Results
 4.  Key
Sensi>vi>es
 5.  Value
Proposi>on
Summary
Findings
 33

  • 35. Modeling
the
value
proposi7on
of
storage
is
 challenging.
StrateGen’s
approach:

 34

  • 36. Value
Proposi7on
–
Key
Drivers
 StrateGen
has
extensively
analyzed
the
drivers
of
value
for
storage.

 We’ll
present
results
of
the
base
case
and
sensi7vi7es.
 Customer
Specific
 Technology
Specific
 Baseline
Load
 CAPEX

 »  Requires
peaky
loads
coincident
with
 »  Fully
loaded
cost
of
storage
system
including
 u>lity
peaks
to
maximize
storage
value

 baperies,
controls,
inverters,
BOS,
building,
 etc.

 Tariff
 »  Requires
high
peak
demand
charges
or
 OPEX
 >me‐of‐use
tariffs
with
large
spreads
 »  Fixed
and
Variable
O&M

 between
off‐peak
and
on‐peak
prices
 »  Consider
running
the
bapery
every
weekday
 »  Cri>cal
Peak
Pricing
is
an
improvement
 on
peak

 for
storage
 »  Includes
replacement
costs
and
consumables
 Round
Trip
Efficiency
 »  AC
to
AC
efficiency
losses
of
charging
and
 discharging
 35

  • 37. Value
Proposi7on
–
Base
Case
 Base
Case:
A
100kW,
4h
banery
has
a
7.6%
IRR
from
peak
load
shi_ing
 when
paired
with
a
350
kW
PV
system
 Key
Assump7ons(1)
 Load
Shape
Impacts
 »  Use:
customer‐sited
storage
system
coupled
 with
a
350kW
PV
system
 »  All‐equity
turnkey
purchase
 »  Bapery
Size:
100kW,
4h
dura>on
 »  Bapery
Round
Trip
AC
Efficiency:
65%

 »  CAPEX:
$475kWh
($2,850/kW)

 »  Variable
O&M:
$0.075/kWh
discharged
(2)


 »  Fixed
O&M:
$6/kW/yr
 »  Incen>ves:
None
 Results
 Storage
Op7mal
Sizing
 »  Aker
Tax
IRR:
7.6%
 »  Analyze
net
peak
load
with
PV
system
 »  Simple
Payback:
11
years
 »  SCE
TOU8
Peak
Period
12PM
–
6PM
 »  Use
storage
to
shave
akernoon

peak
 »  100kW,
4h
bapery
 (1)  SCE TOU8 tariff, CA high school load profile (2)  This cost accounts for replacement costs of battery cells, parasitic loads, and consumables 36

  • 38. Customer
Specific
Sensi7vi7es


 Three
hypothe7cal
load
shapes
and
tariffs
were
selected
to
determine
 sensi7vity
of
customer
specific
factors
 Customer
Load
 Applicable
Tariff
 »  SCE
TOU8
(Secondary):
 August
Daily
Load
Profile
 –  $15.41/kW
Summer
Peak
Demand
Charge
 –  $0.1077/kWh
Summer
Peak
Energy
Charge
 –  4
Month
Summer
 –  12
to
6
PM
Summer
Peak
 »  SCE
TOU8
–
CPP
(Secondary):
 –  Same
structure
as
TOU8,
but
with
12
Cri>cal
 Peak
Days
during
summer
peak
hours
at
 $1.36229/kWh
 –  Peak
Demand
Charge
credit
of
$12.47/kW
 to
offset
CPP
events
 »  PG&E
E‐19
(Secondary):
 –  $13.51/kW
Summer
Peak
Demand
Charge
 –  $0.1555/kWh
Summer
Peak
Energy
Charge
 –  6
Month
Summer
 –  12
to
6
PM
Summer
Peak
 37

  • 39. Value
Proposi7on
–
Customer
Specific
Drivers
 A
project’s
load
shape
and
tariff
will
have
a
significant
impact
on
end‐ customer
returns

 Customer
Load
 Applicable
Tariff
 38

  • 40. Value
Proposi7on
–
Storage
Technology
Drivers
 CAPEX
has
a
significant
impact
on
end‐customer
returns.

 Round
Trip
Efficiency
is
typically
less
cri7cal
 CAPEX
 AC
Round
Trip
Efficiency
 39

  • 41. Value
Proposi7on
–
Storage
Technology
Drivers
 A
project’s
OPEX
will
have
an
impact
on
end‐customer
returns
and
is
 the
least
transparent
variable
for
distributed
applica7ons
 OPEX
 Methodology
 »  OPEX
has
two
components:
   Fixed
costs
that
are
incurred
whether
the
 bapery
is
cycled
or
not
   Variable
costs
from
cycling
the
bapery
 »  This
graph
focuses
only
on
the
variable
costs
 associated
with
kWh
hours
discharged
 »  The
variable
costs
include
consumables
such
 as
water,
cell
stack
replacement,
parasi>c
 loads,
etc.
   Variable
costs
do
not
include
energy
 consumed
or
lost
during
charge/discharge
 (accounted
for
in
avoided
energy
costs)
 40

  • 42. Summary
Value
Proposi7on
Analysis
Findings


 Retail
applica7ons
can
provide
anrac7ve
value
proposi7ons
 Economic
Drivers
 Realis7c
Scenario
 »  Top
economic
drivers


 »  Key
Assump7ons
 – CAPEX
 – 85%
RTE
 – Load
shape
 – $475/kWh
CAPEX
 – Tariff
 – $2/W
SGIP
 – Incen>ves

 – $0.0500/kWh
discharged
OPEX
 – SCE
TOU8
CPP
 »  Addi7onal
economic
drivers
(not
 – High
school
load
profile

 quan7fied)

 – Includes
PV
integra>on
 – Ability
to
provide
emergency
backup/ UPS
capability
 »  Results
of
Storage
+
PV
System

 – Ability
to
comply
with
u>lity
demand
 – 11.9%
IRR
 response
ini>a>ves

 – 6
Yr
Simple
Payback
 – Ability
to
par>cipate
in
more
tariff
 opportuni>es
 41