© 2015 Electric Power Research Institute, Inc. All rights reserved. Haresh Kamath Program Manager, EPRI Acher Mossé Executive Consultant Latin America,

© 2015 Electric Power Research Institute, Inc. All rights reserved.

Haresh Kamath

Program Manager, EPRI

Acher Mossé

Executive Consultant Latin America, EPRI

GSEP ECLAC Energy Storage for Sustainable Development Workshop

April 2015, Rio de Janeiro

Energy Storage for Distribution Flexibility

2© 2015 Electric Power Research Institute, Inc. All rights reserved.

Capacity and Energy

Central Station Generation

Capacity

En

erg

y

Variable Generation

Storage and Demand Response


RENEWABLES IN BRAZIL – WHY THE FUZZ

First “NEW” renewables only (Solar & Wind) 2014auction has showed good results:– 1,658.76 MW of installed capacity committed, at an average cost of R$

169.82 (roughly US$ 54) /MWh The electricity cost for the industry in Brazil is now the highest in the world, as

shown in the graph below:

Source: FIRJAN, 03/2015

COUNTRIES BRAZIL GERMANY SPAIN USA INT. AVG0

100

200

300

400

500

600

R$ / MWh


The Pace of Change

Exponential growth in solar photovoltaic (PV)


50 GWh of annual production capacity by

2020 with expected battery/pack cost

reduction by 30% in 2020

“…[the] solar generation/battery storage combination is currently an order of magnitude too expensive to cause much grid defection.”

- Moody’s Investor Service, “Batteries are Coming but Utilities are not Going Away” January 6, 2015

“Improvements in batteries and distributed generation could partly or completely eliminate some customers’ usage of the power grid…”

- Morgan Stanley Blue Paper, Solar Power & Energy StorageJuly 28, 2014

The Growing Interest in Energy Storage


Energy Storage Application

Energy Storage has potential application across the entire electricity enterprise value chain

Transmission Operator Distributio

n Operator

Load Serving Entity Industrial

Customer

Commercial

Customer

Multi-Dwelling

Unit

Residential Customer

Microgrid/Sustainable

Communities

Other Substations

SubstationEnergy Storage

Distributed Resources

Large-Scale Renewables Substation Microgrid Residential

Commercial & Industrial


Distribution Applications for Energy Storage

Potential Applications– Deferring traditional upgrades– Reducing risk of stranded assets– Shifting energy from renewables– Improving integration of renewables

Potential Locations– Closer to the load – improve voltage and capacity,

reliability– Closer to the substation –improve capacity

DistributionSubstation

SubstationStorage

Community Storage

ResidentialStorage



Energy storage can sometimes help in distribution planning, when the alternative is an expensive investment to service a short peak

The energy storage system – installed at the constraint point, or closer to the load – can be relatively small since it is used just to shave the peak load

Installing energy storage also reduces the risk of stranded assets (in the event that the load growth is not permanent)


Lo

ad

Hour

SubstationStorage


Bulk System Applications for Distributed Storage

Key long-term need: distribution communication/control platform to integrate and optimize

Dispatch Priority 1

Dispatch Priority 2

Dispatch Priority 3

Distribution Investment

Deferral

System Electric Supply Capacity

Electric Energy Time Shift Regulation Spinning

ReserveNon-Spinning

Reserve


SubstationStorage

Community Storage

ResidentialStorage



Can storage help mitigate the effects of PV increasing penetration in distribution networks?The principal issues associated with PV

penetration are related to voltage and protection impacts

These issues can typically be addressed through more inexpensive and effective means than storage – Volt/VAR controllers– Smart inverters– Advanced protective relays

0 1 2 3 4 5

J1

R1

R2

R3

R4

T1

T2

G1

G2

G3

P1

P2

P3

P4

P5

D1

D2

D3

MW of Consumer PV

Feed

er

Feeder

MW of Consumer PV1 2 3 4 50

D3D2D1P5P4P3P2P1G3G2G1T2T1R4R3R2R1J1

Probable Issues

Possible Issues

No Issues


Key Insights – Cost, Markets and Policy

Decreasing cost and increasing potential for revenue will make ES application much more prevalent even without any significant technology breakthrough

Cost

• Life cycle system cost has many more elements than just the capital cost of battery packs

• Volume production driven learning curve

• System cost reduction ~25% likely scenario in this decade

Markets

• Higher demand charge

• Increasing value for flexibility as a market product

• Market rules enabling short term resource

Policy and Regulation

• California ES Mandate

• New York Reforming the Energy Vision (NY REV) – distribution system integrated ES

• State/Federal ES incentives


UPS Grid Support Energy ManagementPower Quality Load Shifting Bulk Power Mgmt.Bridging Power

Energy Storage Options – Power Rating Versus Discharge Durations

Lithium Ion battery technology will be the dominant technology for stationary application in the foreseeable future

Dis

cha

rge

Tim

e a

t R

ate

d P

ow

er

Se

con

ds

Min

ute

sH

ou

rs

System Power Ratings

1 kW 10 kW 100 kW 1 MW 10 MW 100 MW 1 GW

High Energy Super Caps

Lithium Ion Battery

Lead Acid Battery

NiCd

NiMH

High Power Fly Wheels

High Power Super Caps SMES

NaS Battery

ZEBRA Battery

Advanced Lead Acid Battery

CAES

Pumped HydroFlow Batteries

ZrBr VRB Novel Systems

Metal-Air Batteries

Lithium Ion Battery


Progression of Battery Technologies

1860 1950 1985 2020 20351994

En

erg

y D

en

sity

(W

h/k

g)

100

0

50

400

Lead-Acid25 – 45

Nickel-Cadmium35 – 60

Lithium Ion110 – 140

Nickel-Metal Hydride50 – 75

Advanced Lithium Ion 150 – 200

Lithium-Air (?)350 – 400

Range for EV equipped with 600 kg battery and 250 Wh/mile efficiency

80 mile range250 mile range

350 mile range700 mile range


Key Insights – Technology

Incremental improvement of existing technology will lead to increased application – passive thermal energy storage could be a hidden low cost option

Distributed ES

• Li Ion will be technology of choice

• Continuous cost reduction/performance improvement – significant market barrier for technology breakthrough (similar to crystalline PV)

• Emerging higher performance chemistries are in the early stage of TRL and breakthrough possibility this decade is marginal

Bulk/Grid Scale ES

• Li Ion technology scaling up for grid scale storage (~100s of MW) is going to be impractical

• Research on grid scale storage breakthrough will not be funded by transportation or consumer electronics industry

• Utility industry will need to take the lead for any potential breakthrough for grid scale storage

Thermal ES

• Active thermal energy storage (e.g., ice storage) is a proven and mature technology

• Passive thermal energy storage (water heater, building envelop) are the lowest hanging fruit

• The “internet of things” will make integration of buildings/water heaters seamless


Distribution System Integrated Storage Benefit-Cost

6

5

4

3

2

1

0

Mill

ion

s ($

)Distributed Storage with 1 MW/4 hr. Battery in 2015

Cost Benefit

Source: Results generated from CPUC inputs into EPRI Energy Storage Valuation Tool

Cost

Taxes (Refund or Paid)

Operating Costs

Financing Costs

Capital Expenditure

Benefit

Distribution Investment Deferral

Frequency Regulation

Non-Spinning Reserve

Spinning Reserve

System Electric Supply Capacity

Electricity Sales


Assume $10/kW demand charge and storage at $500/kWh

PEAKY LOAD

Savings: 30kW x $10/kW x 12 months = $3,600/year

Cost: 4h x 15kW x $500/kWh = $30,000

Simple Payback: 8.33 years

FLAT LOAD

Savings: 10kW x $10/kW x 12 months = $1,200/year

Cost: 12h x 5kW x $500/kWh = $30,000

Simple Payback: 25 years

24 hours

kW

Average Load

30 kW

10 kW

What if demand charges were the only way to pay for storage?

The Case for Behind-the-Meter Energy Storage

Flat Load

Peaky Load Example for illustration only


Example for illustration only

The Case for Behind-the-Meter Storage in California

The business case presently relies on heavy federal and state incentives

Policy Incentives

Ancillary Services Revenue

Demand Charge Reduction

PV Energy Shift

Reliability Value to Owner

Installed Cost of Storage

O&M Cost

COST REVENUE


Key Insights – Energy Storage System Demonstrations

System safety a critical consideration – need more operational experience to understand fire suppression requirements

Control logic for multiple dispatch algorithm is in its infancy Firmware/Software upgrade/maintenance impacts reliable operation Mini-system testing will be critical for early deployments

Battery technology is mature but system integration and operational experience is still lacking

75kW/42kWh; Lithium Titanate; Duke

402kW/282kWh; SodiumNickel; Duke

25kW/50kWh; Lithium Ion; Microgrid – SDG&E

9MVA/32Wh; Lithium Ion; Wind – SCE

Multiple Chemistry…Multiple Application…Various Size


Meeting the Challenges


Foundations of An Integrated Grid

1. Grid Modernization

2. Communication Standards and Interconnection Rules

3. Integrated Planning and Operations

4. Informed Policy and Regulation


Value of an Integrated Grid to Society


How Might the Grid Evolve?

Grid Defection

Connected, but not

Integrated

Partially Integrated

A Fully Integrated

Grid

Where we are today

Policy, Regulation, Markets, Interconnection Rules and Technology will Drive the Transformation of the Grid


Technical Basis for Today’s Briefing

EPRI Technical Staff: ~20 engineers and scientists and economists that brings a “system view” of the energy storage deployment landscape with various areas of expertise– Battery Chemistries– Battery Design– System Integration– Value and Economics– Application Use Cases– T&D Application– Power Markets– Modeling & Simulation– Environment & Health– Safety

Good understanding of the facts will help us to move beyond the peak of the hype cycle

Gartner Hype Cycle


Today’s Key Takeaways (1)

Energy Storage has potential application across the entire electricity enterprise value chain;

Battery technology is mature but system integration and operational experience is still lacking;

Decreasing cost and increasing potential for revenue will make ES application much more prevalent (even without any significant technology breakthrough);

Incremental improvement of existing technology will lead to increased application – passive thermal energy storage could be a hidden low cost option;

Monetizing multiple benefit streams with the objective of providing the lowest cost solution to the rate payers will be key for distribution system integrated applications; and

EPRI’s Energy Storage Valuation Tool provides a consistent method to assess the cost and benefit.


Today’s Key Takeaways (2)

The full value of Distributed Energy Resources (ES, PV, CSP, etc.) comes though their integration in the Grid

The following reports may advance the discussion around DER grid integration: The Integrated Grid: Realizing the Full Value of Central and

Distributed Energy Resources, EPRI, Palo Alto CA: 2014 3002002733

The Integrated Grid: A Benefit-Cost Framework, EPRI, Palo Alto, CA: 2015 3002004878

* Both reports are available and may be downloaded from the EPRI Website: www.epri.com


Together…Shaping the Future of Electricity

Documents

© 2015 Electric Power Research Institute, Inc. All rights reserved. Haresh Kamath Program Manager, EPRI Acher Mossé Executive Consultant Latin America,