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Enlivening Energy Storage Markets, Drivers and Economics
Craig Chambers
June 2015
Enlivening Energy Storage Markets, Drivers and Economics June - - PowerPoint PPT Presentation
Enlivening Energy Storage Markets, Drivers and Economics June - - PowerPoint PPT Presentation
Enlivening Energy Storage Markets, Drivers and Economics June Craig Chambers 2015 Overview Australian Markets, Applications & Drivers Economics of Storage Future of Energy Storage Australian Storage markets, applications and drivers
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Australian Storage markets, applications and drivers
Residential Commercial & Industrial
Transmission & Distribution Off-grid
Electric Vehicles
MARKETS
Wholesale End User or Aggregator
· · · · · · · · · · · · ·
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Australian Storage markets, applications and drivers
Off-Grid Market In Ince centiv ntives es
- Reduce operating cost associated
with diesel fuel cost
- Jurisdictional Community Service
Obligations (>$850m/annum)
- Corporate social responsibility
- ARENA RAR Grants & CEFC Funding
Ob Obstac stacles les
- Lack of case studies & limited
understanding of hybrids
- Risk of production loss
- Lower oil and commodity prices
- Policy landscape (fuel excise, RET)
- Storage competes with RE
forecasting, DM & status quo
- RE Hybridisation
- Fuel Saving
MARKET STORAGE APPLICATIONS DRIVERS
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Australian Storage markets, applications and drivers
Wholesale Market In Ince centiv ntives es
- Government Programs (ARENA &
ACT NextGen Solar Auction)
- Peaky wholesale markets (i.e. South
Australia)
- Renewable firming (inertia and
ancillary services) Ob Obstac stacles les
- Oversupply of base load and
peaking generation
- Oversupply of FCAS market
- Development costs and timeframes
can be significant
- Electricity forecasting uncertainty
- Utility-scale storage
- Wholesale arbitrage
- Ancillary services
MARKET STORAGE APPLICATIONS DRIVERS
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Australian Storage markets, applications and drivers
T&D Market In Ince centiv ntives es
- Growing peaks and falling load factor
- Regulatory incentives & schemes
- Alternative to traditional network
management options
- Attraction of unregulated revenue &
new demand options (i.e. EV’s)
- Innovative to compete (i.e. reliability
standards & RE integration) Ob Obstac stacles les
- Costs compared to traditional
alternatives & DM
- Regulatory limitations of storage
application
- Incentives to innovate don’t currently
- utweigh BAU
- Regulatory & policy change is slow to
adapt (Power of Choice SCER 2012) MARKET STORAGE APPLICATIONS DRIVERS
- T&D management
- DM incentive
- Network investment
return
- Power quality and
reliability
- Fringe of grid
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Australian Storage markets, applications and drivers
End User Market In Ince centiv ntives es
- Cost, cost and cost…
- Tariff avoidance
- TOU load shifting
- Network free-riding
- Automotive fuel savings
- Bundled solutions
- Renewable pairing
Ob Obstac stacles les
- Lack of safety & quality standards
- Grid connection
- FiT disqualification
- Implementation of cost reflective
network charges
- Behind the meter
- Tariff avoidance
- TOU load shifting
- Back-up security
- Wholesale arbitrage
- Fuel saving (EV)
- DM incentive
- Ancillary services
- Electric Vehicles
Residential Commercial & Industrial EV’s
MARKET STORAGE APPLICATIONS DRIVERS
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Current value Expected future trend Off-grid Wholesale T&D End user Tariff avoidance + TOU load shifting Back-up security Wholesale arbitrage Fuel saving Ancillary services DM incentives Network investment return Power quality Shared benefits
Australian Storage markets, applications and drivers
Summary of trends and drivers
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Global Storage Market
Australia Wholesale T&D End User Off Grid UK Wholesale T&D End User Off Grid China Wholesale T&D End User Off Grid Japan Wholesale T&D End User Off Grid Korea Wholesale T&D End User Off Grid Germany Wholesale T&D End User Off Grid California Wholesale T&D End User Off Grid Hawaii Wholesale T&D End User Off Grid Texas Wholesale T&D End User Off Grid New York Wholesale T&D End User Off Grid
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Economics of Storage
Breakeven analysis
$0 $50 $100 $150 $200 $250 $300 $350 $400 $450 Off-grid Wholesale T&D End-user (new- install PV) End-user (existing PV) Shared value Generation revenue (AUD/MWh)
Battery Storage Technologies LCOE Bulk Storage Technologies LCOE *See New York, Reforming the Energy Vision (REV)
*
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Solar Retrofit Market
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60c tariff commenced 20c tariff commenced feed-in tariff deadline on both schemes 44c tariff commenced 8c tariff commenced 8c tariff expires
20,000 40,000 60,000 80,000 100,000 120,000 140,000 Number of PV Systems Installed
NSW QLD
2028 2016 2024 2028 2021 ~ 2018 2030
FiT Expiry Year
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Future of Distributed Generation
Industry Evolution…
Utility Offer OEM or Installer Offers Disrupter or Enabler Offers
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Distributed generation re-aggregates the value chain however un-tapping the shared benefit is our challenge in a disaggregated electricity market…
S h a r e d b e n e f i t
- f
e n e r g y s t
- r
a g e Centralised Distributed Supply-side storage Wholesale arbitrage Ancillary Services T&D storage DM incentive Network investment return Power quality & reliability End-user storage Tariff avoidance TOU arbitrage Back-up security Wholesale arbitrage Fuel saving (off-grid or EV) DM incentive Ancillary services Current economic value of energy storage
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Conclusion
Darwinism; Technologies descend from the collective of earlier
- technologies. Storage has a purpose and solves lots of problems
(i.e. carbon, cost, UPS, RE shifting etc). Smart Storage; As we shift from 10’s to 106’s of power stations, we must develop smart grids & technologies to aid smarter consumers. Share your storage; Shared use and management of distributed energy (including storage) trumps self interest. The future is unclear yet definitely not the same as the past… focus should be on:
- Expiring FiT retrofit and inverter replacement are natural target markets
- Technology cost reduction through enablers
- Regulations & integration rather than revolution
- Defining and promoting shared benefits and safety
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