Energy Storage: An Asset to Ontarios Smart Grid Presentation by the - - PowerPoint PPT Presentation

CPC: Energy Storage Working Group

Energy Storage: An Asset to Ontario’s Smart Grid

Presentation by the Corporate Partners of the Smart Grid Forum, Energy Storage working group To the Ontario Smart Grid Forum April 16th 2012

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CPC: Energy Storage Working Group

Who we are

The CPC Energy Storage Working Group is a working sub group of the Smart Grid Forum’s Corporate Partner Committee. The group is made up of individuals from

• rganizations representing Energy Storage manufacturers, integration providers,

project developers, and providers of Energy Storage services. The goals of the CPC Energy Storage Working Group are: 1. Advance understanding of Energy Storage as key asset to the Smart Grid 2. Highlight existing hurdles to market adoption 3. Support the Smart Grid Forum in making policy recommendations

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CPC: Energy Storage Working Group

What is Energy Storage?

Technologies Batteries Chemical Compressed Air Demand Side Storage Flywheels Hydrogen Energy Storage Capacitors Power-to-Gas Pumped Hydro Thermal Energy Storage Applications Ancillary Services Deferral of Equipment Upgrades Distributed generation facilitation Grid Regulation Load Leveling Micro grid facilitation Power quality support Price arbitrage Renewable Power integration Energy Storage is simply temporally shifting the availability of energy over time. Stored energy can be used in many ways to make the electrical grid work better. The uses of energy storage are as diverse as the devices and techniques employed to store energy. A common understanding of how to use Energy Storage is to capture less expensive energy when we don’t need it, store it, and use it later when energy is expensive. A more comprehensive look at Energy Storage points to using storage more selectively on the grid for specific applications where their unique operating characteristics offer verifiable benefits that are cost effective. Energy storage is a fundamental component for the smart grid and for incorporating large amounts of wind and solar.

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CPC: Energy Storage Working Group

Value from Energy Storage can:

• Benefit multiple stakeholders
• Depend on how quickly energy can be absorbed and

released

• Depend on how long energy is stored for
• Depend on how frequently it can be used

Different Energy Storage technologies have:

• Very different characteristics
• Tend to be best used for specific applications
• Can be difficult to compare

Analyzing Energy Storage is Complex

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CPC: Energy Storage Working Group

Approach and Perspective

HIGH LEVEL PERSPECTIVE 1. Focus on high leverage applications in Ontario 2. Highlight four specific near term opportunities and identify the barriers to their implementation 3. Make recommendations with respect to what needs to be addressed in Energy Storage Framework to achieve desired benefits

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CPC: Energy Storage Working Group

Energy Storage Working Group Presentation

• Energy Storage Applications
• 1. Regulation Services
• 2. Renewable Energy Integration
• 3. Remote & Off Grid Communities
• 4. T&D Deferral and Time Shifting
• Hurdles to Market Adoption in Ontario and Recommendations

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CPC: Energy Storage Working Group

Regulation Services: Application Overview

CHALLENGE

• In order to provide Regulation Services,

generators are forced to deviate from

• ptimal power output profiles
• This increases costs, emissions and wear and

tear on generation assets SOLUTION

• By using fast responding storage resources,

generators can be operated to maximize energy output, at minimum cost and emissions FACTS

• Regulation (sometimes called Frequency

Regulation) is required to maintain second by second balance in electricity systems.

• It has traditionally supplied by generators
• It is generally procured as an ancillary service in
• rganized markets

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CPC: Energy Storage Working Group

Regulation Services: Benefits of Energy Storage

COST EFFECTIVE

• Less regulation required by using higher

performing resources

• Lowest marginal cost resource for

system regulation

• Increased availability of low cost clean

hydro power

• PJM expects overall regulation costs to

decrease by 5 -10% by paying for fast responding energy resources HIGHER PERFORMANCE

• Faster response
• More accurately follows the signal
• 2-3 times as much regulation per MW
• f energy storage vs. combustion

turbine

Slow Ramping Generator Fast Response Energy Storage Current resources (gas, coal, hydro) are slow and respond imperfectly to the regulation signal

Faster resources provide more effective regulation to the grid

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CPC: Energy Storage Working Group

Regulation Services: Ready for Market

CANADA

• AES builds 10MW battery plant in NYISO for Regulation
• AES providing Regulation Services in PJM from battery farm (32MW)
• Alcoa providing Regulation (and other ancillary services) in MISO (total of 70MW)
• Beacon Power builds 20MW flywheel plant in NYISO for Regulation
• ENBALA Power Networks operating network of loads to provide commercial Regulation in PJM
• ERCOT has qualified one load to provide Regulation directly (chemicals company)

INTERNATIONAL

Enbala Power Networks demonstrates capability of load based storage regulation in response to RFP for pilot technologies. Smart Grid Fund proposals in process. Hydrogenics demonstrates capability of load based regulation to IESO in response to RFP for pilot technologies Temporal Power preparing to provide regulation services using flywheel technology.

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CPC: Energy Storage Working Group

Energy Storage Working Group Presentation

• Energy Storage Applications
• 1. Regulation Services
• 2. Renewable Energy Integration
• 3. Remote & Off Grid Communities
• 4. T&D Deferral and Time Shifting
• Hurdles to Market Adoption in Ontario and Recommendations

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CPC: Energy Storage Working Group

Renewable Energy Integration: Application Overview

CHALLENGE

• Sudden and dramatic changes of power
• utput from Renewable Energy generators

cause power quality issues on the distribution line

• Changes in power output can result in power

quality, voltage and harmonics issues resulting in increased system losses, accelerated wear & tear on grid equipment, customer equipment damage and safety concerns SOLUTION

• By locating fast responding energy storage

near renewable energy generation, sudden and dramatic swings can be smoothed out using storage as a buffer while the grid makes necessary adjustments FACTS

• Renewable Energy Installations are often located on the distribution system in remote locations
• Distribution feeder lines were not designed to support generation assets
• Distribution feeder lines are often long and have relatively low loads
• Power output from Wind and Solar generators can change suddenly and dramatically

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CPC: Energy Storage Working Group

Renewable Energy Integration: Benefits of Energy Storage

COST EFFECTIVE

• Often less expensive on a capital cost basis than upgrading distribution lines
• Improves line losses by utilizing useful real power
• Lessens wear and tear on expensive substation equipment

IMPROVED POWER QUALITY

• Improved power quality
• Improved voltage
• Improved harmonics

OTHER CONSIDERATIONS

• Quick and easy to deploy relative to upgrading a distribution line
• Enables more renewable generation to be connected to a particular distribution line
• Extends the distance on a distribution line from a substation where renewable integration can be connected
• Benefits renewable energy producers by limiting trips, downtime, and equipment wear and tear

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CPC: Energy Storage Working Group

Renewable Energy Integration: Cases

• Temporal Power 5 MW commercial

demonstration

• Renewable Integration on a distribution line in

southwest Ontario on the Hydro One network

• Commissioning in late 2012

CANADA INTERNATIONAL

• Hydrogenics 1MW Power-to-Gas project for

140MW wind farm in Germany

• 1.5 MW Advanced Lead Acid station
• Many examples of Lithium Ion technology

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CPC: Energy Storage Working Group

Energy Storage Working Group Presentation

• Energy Storage Applications
• 1. Regulation Services
• 2. Renewable Energy Integration
• 3. Remote & Off Grid Communities
• 4. T&D Deferral and Time Shifting
• Hurdles to Market Adoption in Ontario and Recommendations

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CPC: Energy Storage Working Group

Remote Communities: Application Overview

CHALLENGE

• How to make use of renewable resources in remote areas
• How to reduce or eliminate diesel fuel logistics completely

SOLUTION

• By adding reliable storage resources in correct proportion to

renewable generation remote communities can achieve up to 100% renewable generation

• Optimize or eliminate the need for diesel fuel

FACTS

• Northern Ontario, Quebec, NWT, Nunavut communities

typically run 500kW-2MW of Diesel systems for primary power generation

• Mining sites, defense installations and ports in remote

areas also rely on diesel for baseload power

• The total cost including fuel logistics is $0.75-1.25/kWhr
• Significant renewable generation resource exists in these

areas but cannot be used due to poor dispatchability and intermittent nature

Wind Solar Run of River Hydro

Community Load (300kW-2MW) Reliable Storage Resource 15

CPC: Energy Storage Working Group

Remote Community: Benefits of Energy Storage

COST EFFECTIVE

• Approximately 30-50% cost savings over current diesel cost
• Total future energy cost is “locked in” based on capital cost rather than escalating cost of diesel
• Excess capacity of oversized diesel plants is eliminated

IMPROVED ENVIRONMENTAL & EMISSIONS PROFILE

• CO2 emissions can be entirely eliminated
• Risk of oil spills in transit and at site is eliminated

OTHER CONSIDERATIONS

• Future growth in power consumption is accommodated in a modular fashion
• Storage can be used to provide voltage and frequency support on micro grids

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CPC: Energy Storage Working Group

Remote Communities: Cases

CANADA INTERNATIONAL

• HYDROSTOR and Hydrogenics have collaborated on project proposals for northern community in Quebec
• Hydrogenics has installed hydrogen energy storage facilities with BC Powertech at the Bella Coola Site in BC as well as

Ramea Island with NALCOR (Newfoundland Power)

• Several mining site operators in Canada have expressed interest in the solution
• Temporal Power working on demonstrations and field installations with BC Hydro and Canadian Government through

CICP program

• Hydrogenics has deliver 12 remote community hydrogen energy systems in Greenland, Patagonia, Wales,

France and Spain

• As Caribbean vacation destinations are facing escalating fuel costs and install renewable generation the need

for complementary energy storage is becoming clear

• The islands of Hawaii have experimented with several battery storage projects as a complement to wind and

solar development

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CPC: Energy Storage Working Group

Energy Storage Working Group Presentation

• Energy Storage Applications
• 1. Regulation Services
• 2. Renewable Energy Integration
• 3. Remote & Off Grid Communities
• 4. T&D Deferral and Time Shifting
• Hurdles to Market Adoption in Ontario and Recommendations

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CPC: Energy Storage Working Group

FACTS:

• There is an urgent need in Ontario to update aging T&D

infrastructure to handle daily peak levels.

• Current capacity utilization of T&D assets is ~50%.
• Peak generating capacity is currently handled by fossil

fuel plants, that are run infrequently.

• In Ontario there is surplus baseload generation at night,

which is forecasted to increase over the coming years. CHALLENGE:

T&D Deferral and Time-Shifting: Application Overview

• Fossil fuel generation does not contribute to resolving SBG issues, has GHG, and is often sited from

load centres, requiring significant transmission line.

• Locating peak generation at load reduces T&D peak capacity requirements (increasing utilization).
• Over 70% of demand comes from urban centers, which rarely permit gas plants nearby (NIMBY).

SOLUTION:

• Scalable, energy storage located at load centres can help level daily demand, absorb SBG, increase

T&D asset utilization, provide on-demand peak generation, offer reserve capacity (when charged), and can even support frequency regulation when charging/discharging.

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CPC: Energy Storage Working Group

T&D Deferral and Time-Shifting: Benefits of Energy Storage

COST EFFECTIVE

• Often less expensive on a capital cost basis than upgrading / installing new transmission or

distribution lines

• Effective CAPEX/OPEX cost competitive with gas peaking plants (“fuel” is off-peak electricity),

especially if you consider transmission requirements and GHG FLEXIBILITY

• Provides flexibility of 2-times rated capacity (swing between full charge and discharge)
• Possible to provide ancillary services such as operating reserve and grid regulation
• Scalable to fit available capacity at distribution substations & avoid transmission network
• Reduces reliance on gas peaking plants, and natural gas prices

OTHER CONSIDERATIONS

• Can be located directly at load reducing peak transmission requirements
• Quick to deploy, and can be focused where congestion exists
• Provides range of services in aggregation (generation, T&D asset deferral, ancillary)
• Environmentally friendly
• Absorb surplus baseload generation at off-peak times

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CPC: Energy Storage Working Group

T&D Deferral and Time-Shifting: Cases

ONTARIO

NaS Sodium Sulfur batteries have been used for T&D deferral in Japan and other internationally In the United States, the Federal Energy Regulatory Commission (FERC) has established an NOI that promotes transmission investment through pricing reform, which provides subsidies for transmission and distribution upgrades provided by storage Congestion relief payments have been implemented to spur energy storage technologies that provide T&D Deferral benefits (California & Texas) California has enacted AB2514, the Energy Storage Bill, which requires the California Public Utility Commission (CPUC) to adopt storage procurement targets to be achieved by each load serving entity by 2015

INTERNATIONAL

Hydrostor planning MW-scale demonstration in Toronto for 2013 Small scale batteries and thermal storage projects have been tried on a demonstration basis NRStor recently launched to build “storage parks” in Ontario with compressed air and other storage technologies

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CPC: Energy Storage Working Group

Energy Storage Working Group Presentation

• Energy Storage Applications
• 1. Regulation Services
• 2. Renewable Energy Integration
• 3. Remote & Off Grid Communities
• 4. T&D Deferral and Time Shifting
• Hurdles to Market Adoption in Ontario and Recommendations

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CPC: Energy Storage Working Group

Hurdle Recommendation

1. Current market rules would penalize Energy Storage applications because the Global Adjustment, Debt Retirement, Uplifts and T&D Costs would be charged twice—once when energy is captured and again by the end-user consumer. Modify market rules to recognize the inherent differences in Energy Storage applications

• Charge Global Adjustment, Debt Retirement, Uplifts

and T&D Costs on a “net consumption” basis and pass through these fees to ultimate customer

• Apply to large scale, distributed and aggregated

Energy Storage applications

• Consider precedents set for “Station Service” with

pumped hydro facilities, energy export classification, and demand response

• Provide outright exemption for demonstration

plants

• 2. Regulation Service contracts were

designed with generation assets in mind because generators have historically provided these services Change structure of IESO ancillary service contracts so that Energy Storage assets are eligible where it makes economic sense

• Removal of contracting and registration barriers to

entry (RFP evaluation criteria, licensing aggregation requirement, etc.)

• Differentiated regulation service class for fast

responding resources (along lines of FERC 755)

• Longer term ancillary service contracts needed to

make business case for investors for Energy Storage applications

Hurdles to Market Adoption in Ontario and Recommendations

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CPC: Energy Storage Working Group

Hurdle Recommendation

• 3. Energy Storage delivers system-wide

benefits, including reduced congestion and deferral of capital, that are compelling in totality but are difficult to monetize because benefits accrue to multiple stakeholders (for example, for integrating renewable generation on the distribution network). Establish a consistent, transparent mechanism to value the defused benefits to the rate payer. There are two alternative approaches to address this issue: a) Permit Energy Storage assets to be included in rate base applications of Local Distribution Companies (and Hydro One for rural distribution) b) Design a programmatic (FIT) approach

Hurdles to Market Adoption in Ontario and Recommendations

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CPC: Energy Storage Working Group

Q&A

The Corporate Partners Committee and specifically the sub group on Energy Storage looks forward to working with the Smart Grid Forum to help drive Ontario into a leadership role where Ontarians gain through the benefits delivered by Energy Storage.

THANK YOU.

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