Wind Power & Energy Storage in the ERCOT

Electricity Market

February 14, 2013

Jared Garrison

The University of Texas at Austin

Jared Garrison IEA Energy Storage

Feb 14, 2013 2

Introduction to the Electric Reliability Council

of Texas (ERCOT)

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ERCOT or (TRE) Covers Most of the State of

Texas

(Image courtesy of U.S. EPA)

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ERCOT Information

• Formed in 1970

– Approximately 6400 buses and 7800 lines

– 550 generating units

– Serves 23 million people

• 2001 ERCOT became the single control area

operator (balancing authority)

• 2011 Nodal competitive wholesale market with

locational marginal pricing

– Co-Optimization of balancing and ancillary

services markets

– Centrally dispatched real-time & day-ahead

market

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ERCOT’s 2011 fuel mix is heavy on Natural

Gas

(Image courtesy of Aaron Townsend)

• 74 GW

Capacity

• 68.3 GW

Peak

Demand

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Wind and Energy Storage in ERCOT

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Wind energy in Texas has grown rapidly

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Total Monthly Wind Generation Total ERCOT Wind Capacity

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Curtailment occurs at time of high wind

power output

Data: Hourly, June 2009 – Nov 2010

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Feb 14, 2013 9 Data: Hourly, June 2009 – Nov 2010

Adjusting for curtailment yields a much more

linear relationship

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Utility-Scale Electrical Energy Storage Is

Currently Limited to Three Technologies

• Batteries

– Expensive

• Pumped Hydro

– Requires water and elevation change

– Difficult to site due to environmental & NIMBY

issues

• Compressed Air Energy Storage (CAES)

– Easier to site

– Has lowest costs

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CAES Can Be Built In Most of the U.S.

EPRI-DOE Handbook of Energy Storage for Transmission and

Distribution Applications, EPRI 1001834, 2003.

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Current Energy Storage Developments

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Presidio TX Battery Storage

• City relies on 100 km transmission line built in 1948

– Hostile terrain & age of line led to frequent power

outages and fluctuations

• 4 MW (32 MWh) NAS Sodium-Sulfer battery

– By Electric Transmission Texas (ETT)

• Dedicated on April 8, 2010

– $25 million

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New CAES in Texas – COMING SOON!

• Chamisa Energy

– 270 MW facility in Tulia, TX

– 100 hrs continuous output capacity (27,000 MWh)

– Proven geological samples (salt formation)

– Construction to begin soon

• Apex Energy Storage

– Still in design and site evaluation phase

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Analysis of 20% Wind and CAES in ERCOT

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Project Detail

• Analyze a future scenario with 20% of generation

coming from Wind

– Role of Energy Storage? (CAES)

• Unit commitment model of the ERCOT grid

– Minimizes the cost of electricity dispatch across

the fleet

– Input: plant performance parameters, electricity

demand, wind generation, and AS requirements

• Simulated dispatch under various conditions

– NG Price, CAES operation (Arbitrage vs.

Ancillary Services), etc

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Results Example – Summer

with 2 GW of CAES

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Best results when allowing CAES to

participate in both arbitrage and AS markets

• Increased output from CAES compared to Arbitrage

Only case

– Capacity factors increase by ~ 5%

• Only a small reduction in CAES use for AS

compared to the AS Only case

• CAES is still significant for AS

– 10-20% of Regulation Up

– 10-20% of Regulation Down

– 10-15% of RRS

– 1-5% of NSRS

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CAES Profitability Analysis

by Aaron Townsend

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Project Detail

• Unit commitment model of ERCOT (PLEXOS)

– Minimizes the cost of electricity dispatch across

the fleet

– Input: plant performance parameters, electricity

demand, wind generation, and AS requirements

• Unit commitment model of ERCOT (PLEXOS)

– Natural Gas Price (4-10 $/MMBTU)

– Wind Capacity (0-30 GW)

– CAES Capacity (0-6 GW)

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Calibration had to be done to yield more

realistic electricity prices

(Analysis done by Aaron Townsend)

• Addition of variable marginal heat rates, higher

start up costs, and marginal cost markups

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CAES profitability without including scarcity

pricing

(Analysis done by Aaron Townsend)

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Feb 14, 2013 23

CAES profitability without including scarcity

pricing

(Analysis done by Aaron Townsend)

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Feb 14, 2013 24

CAES profitability including scarcity pricing

(Analysis done by Aaron Townsend)

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Acknowledgements

• Supervisor and Contributors:

– Dr. Michael Webber, UT Department of Mechanical

Engineering

– Dr. Carey King, Dr. Ross Baldick & Dr. Stuart Cohen

• Funding Support :

– U.S. Department of Energy

• Referenced Work: – A. K. Townsend, A Grid-Level Assessment of Compressed Air

Energy Storage in ERCOT. PhD dissertation, The University of

Texas at Austin, 2013

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Questions?

Jared Garrison

Graduate Research Assistant Thermal Fluid Systems Mechanical Engineering

University of Texas at Austin jared.brett@utexas.edu

http://www.webberenergygroup.com

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Additional Slides

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CAES Modifies a Natural Gas Turbine Cycle

Compressor Turbine Electricity

Generator

Combustor

Air Exhaust

Fuel

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CAES Modifies a Natural Gas Turbine Cycle

Compressor Turbine Electricity

Motor-

Generator

Combustor

Air Exhaust

Fuel Storage Reservoir

Clutch Clutch

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DSWiSS System Diagram

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A thermodynamic T-s (temp-entropy) diagram

shows the overall power output of the DSWiSS

system

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Cost and other parameters used in my

optimization models

Parameter Cost Units

CAES Capital Cost 787 $/kW

CAES Fixed O&M 17.5 $/kW/yr

CAES Variable O&M 1.31 $/MWh

Wind Capital Cost 2492.2 $/kW

Wind Fixed O&M 28.76 $/kW/yr

(Ridge, 2005)

Parameter Value Units

CAES Generator Capacity 100 MW

CAES Compressor Capacity 54 MW

CAES Electricity Required 13.5 MWh/15min

CAES Heat Rate 30.8 MWh/15min

Natural Gas Price 15.4 $/MWh

Max Air Mass in Storage 14.36 Million kg

(EIA-AEO, 2010)

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Methodology to calculate the levelized cost of

electricity (LCOE) involved estimating capital and

O&M costs

1. Estimate total capital expenditures (CAPEX)

– $/kW installed

2. Estimate annual O&M expenditures (OPEX)

– $/MWh generated

3. Annualize CAPEX and convert to a per MWh

generated basis

4. Add OPEX + annualized CAPEX = LCOE

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DSWiSS mimics CAES but uses off peak wind

and CSP with thermal storage

Off Peak from Grid On Peak to Grid Off Peak from Wind

Air Storage Cavern

CSP & Thermal Storage