A Power System Planners Assessment of Energy Storage Presentation - - PowerPoint PPT Presentation

August 20, 2013

A Power System Planner’s Assessment of Energy Storage

Presentation for OEB Smart Grid Advisory Committee Presenter: George Pessione– Power System Planning, Ontario Power Authority

Topics

• Types of Storage
• Benefits:

– Who – Opportunities & how to address them

• Some facts
• Perceptions
• Hurdles
• Storage in the Planning Process
• Summary

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Applications of Electricity Storage - Niches

3 Power Regulation/ Quality Applications (AGC, Voltage support) Bulk System Storage/ Energy Production Shifting Distributed Storage/ Renewables Integration

Storage is not one technology – Many Technologies doing some of many things

Who Benefits ?

• Developer (Costs + Return)
• Ratepayers (Benefits – other costs) - depends where it is

installed

– Bulk System impacts all ratepayers in Ontario – LDC Impacts LDC customers and potentially other Bulk customers – Individual Customers and potentially other LDC & Bulk system customers

∑ (Net Benefits) ≥ ∑ (Costs + Return)

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Opportunities for Storage to Provide Benefits

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• Capacity Value

– Generation, Transmission, Distribution

• Energy Production Shifting

– Arbitrage (hours, days, weeks, seasons) – Potential Surplus Energy (PSE) Mitigation – Better utilization of renewables (lower emissions?)

• Operating Reserve
• Ramping

– Renewables Integration

• Power Regulation

– AGC

• Power Quality

– Var. Support

What are the Alternatives to Provide Value

BENEFIT ALTERNATIVES

Bulk System LDC Customer Time shifting Flatten Load / Price More dispatchable Gen/Load Flatten Load Dispatchable Load Flatten Load Dispatchable Load Surplus Energy Exports, Load offers, Curtailment Curtailment of DG Increas eload Capacity SCGT Wires, substations, transformers, etc. Rely on LDC to provide capacity Ramping Hydro/Thermal N/A N/A Operating Reserve Hydro/Thermal (market) N/A N/A Power Regulation Hydro/Thermal (RFP) N/A N/A Power Quality (VARs) Capacitors (static) Capacitors (static) Power Filters Emissions Conservation, nuclear, renewables, CHP, CCGT Conservation, renewables, DG Conservation, renewables, DG 6

A MW of storage is not a MW of storage is not a MW of storage…

Which Technology is Better?

• The answer: It depends

– Sorry, there is no simple answer

• Each can have pros and cons
• Niche Applications & Technologies
• Some can be better aggregated than others
• Example: Pumped Hydro Storage – Bulk System

– What is the cost of peaking generation being displaced? – Is the facility in a location requiring Tx system support? – Can it take advantage of existing facilities to lower its capital costs? – Does not benefit LDC or specific load “customers”

• Example: Ice Storage – Customer

– Greater LDC benefits if installed in congested service area. – Customer benefits greater with larger cost arbitrage – Only operates during summer months

• Example: Fly Wheel – Power quality

– Fast charge/discharge fits into power quality market for some generators (wind/solar) , Tx/Dx, customers

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Ontario Energy Storage Pilots

• Toronto Hydro Ice Storage Pilot

– 12 Ice Bear ice storage units were installed at 8 locations in Toronto Hydro and Veridian Connections service areas for the purpose of collecting and analyzing performance data.. – Project was funded by the OPA’s conservation funds.

• IESO Procurement of Regulation Services from alternative Sources

– 10 MW procurement program open only to “alternative” providers of regulation services. – Successful technologies were flywheels, batteries and demand management.

• Hydro One’s Flywheel, Wind Integration Pilot

– 10 MW of flywheels connected to a Hydro One distribution network to help mitigate voltage fluctuations caused by intermittency in the output

• f local wind generators.
• And more…

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People Say…

• Electricity price arbitrage (e.g. day/night) drives economics

– In Ontario value from arbitrage is not as large as expected (see HOEP)

• Energy storage can be coupled with Wind Farms to flatten their

generation hourly MW output. – The volume of storage required to flatten output from a single wind farm is very large

• Energy storage can be applied to absorb energy during times of PSE,

and inject the energy later when it’s needed – PSE is more of a seasonal phenomena (winter vs. summer) and often

• ccurs over multiple days at a time.

– PSE is in the order of many TWh to be moved between seasons would require very large storage volumes.

• Market/Regulatory barriers what’s holding storage back

– Hurdles in regulatory framework exist and should be addressed

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Monthly Average HOEP (On-Peak vs. Off-Peak)

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$0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100

Monthly Average HOEP (On-peak vs. Off-peak)

On Off

Average Daily HOEP Arbitrage Opportunity

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• $40
• $20

$0 $20 $40 $60 $80 $100 $120 $140 $160

Average Daily HOEP Differential (On-peak – Off-peak)

January 1, 2008 December 31, 2012

Monthly HOEP Differential is expected to be

Small

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Monthly Average HOEP Differential (On-peak vs. Off-peak)

On Off Arbitrage

Next ~15 years

Effect of Cost of Carbon on Fueling Cost

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$0 $2 $4 $6 $8 $10 $12 $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 Effective Fueling Cost ($/mmBtu) Cost of Carbon ($/tonneCO2eq)

Effect of Cost of Carbon on Fueling Cost Assuming Gas @ $5/mmBTU

Storing a Year’s Worth of Wind

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2000 4000 6000 8000 10000 12000 14000 16000 18000 5 10 15 20 25 30 35 1 93 185 277 369 461 553 645 737 829 921 1013 1105 1197 1289 1381 1473 1565 1657 1749 1841 1933 2025 2117 2209 2301 2393 2485 2577 2669 2761 2853 2945 3037 3129 3221 3313 3405 3497 3589 3681 3773 3865 3957 4049 4141 4233 4325 Stored Energy (MWh) Output (MW) Hour

Wind Output and Stored MWh

Wind Output Storage Output Opening Storage 2000 4000 6000 8000 10000 12000 14000 16000 18000 20000 5 10 15 20 25 30 35 4401 4493 4585 4677 4769 4861 4953 5045 5137 5229 5321 5413 5505 5597 5689 5781 5873 5965 6057 6149 6241 6333 6425 6517 6609 6701 6793 6885 6977 7069 7161 7253 7345 7437 7529 7621 7713 7805 7897 7989 8081 8173 8265 8357 8449 8541 8633 8725 Stored Energy (MWh) Output (MW) Hour

Incorporating Storage into the Planning Process

– The OPA Identifies a System Need/Opportunities

• Storage must compete with other technologies to provide max. value

– Optimize The Application to recognize full value of storage

• Take advantage of existing sites
• Location, Location, Location…
• Use existing proposals as well as new ideas
• Regional planning and “conservation” initiatives are considering

LDC/Customer based storage opportunities

– Develop a Business Case

• Quantify dispersed benefits
• Recognize that by claiming one benefit can reduce the value of another

benefit

• Realistic look at the return on investment
• Compare cost/benefit ratio with the other competing technologies

– Address Market/Regulatory Hurdles

• Address appropriateness GAM, Uplift charges
• Sharing of benefits

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Contracting Considerations

• Assuming the Business case has been made…
• Many factors must be considered in making a deal

– Procurement of storage should be value based

• Procure only what Ontario needs and only where we need it.
• Payment that reflects value

– Discussions with affected stakeholders to determine how costs/benefits are allocated.

• Which entity is best suited to bear the costs? (LDC, ratepayer, etc.)
• Are cost sharing agreements a feasible option?
• How are benefits shared?

– Storage systems need to be operated efficiently

• E.g. Some storage technologies need the overall system view as

provided by the IESO to provide most effective value.

– Contracts need to reflect the cost/benefit/risks equations and specify how the facility will be operated

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Summary - What’s needed to drive Electricity Storage to play a bigger role

• Recognize the various niches and the technologies that fit them
• Need to be cost effective and demonstrate value
• Focus on fact based applications of energy storage and not on

perceptions.

• Recognize real value each benefit electricity storage can provide

and the interplay and complexities that exist between the benefits.

• Address market barriers and determine ways to optimize collection
• f the benefits that energy storage provides and reflect these in

procurement programs and contracts.

• Keep abreast of Storage technologies’ significant technical and cost

performance improvements.

• Support early development, piloting, demonstrations, etc., of

promising technologies.

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