NY Energy Storage Initiative Update Panelists: H.G. Chissell, - - PowerPoint PPT Presentation

NY Energy Storage Initiative Update

11/20/2013 AGRION.ORG 1

November 19th, 2013 10:00am – 11:30am

Panelists:  H.G. Chissell, Viridity Energy, Senior Vice President, Strategic Accounts (Moderator)  Anthony Barna, Con Edison, Engineer, Research and Development  John Cerveny, NY BEST, Director of Resource Development  Harris Schaer, NYSERDA, Project Manager  Shellka Arora, Chadbourne & Parke, Associate, Project Finance  Ben Pickard, Safari Energy, VP Energy Efficiency

@AGRION

John Cerveny Agrion Energy Storage Initiative Update November 19th, 2013

Technology and Application Overview

Technology & Use

Okinawa Seawater Pumped Storage Molten salt thermal storage

Andasol, Spain

Compressed Air Energy Storage

Huntorf Germany (290 MW), McIntosh Alabama (110 MW)

Vanadium Redox Flow batteries 200kW, 2 hour

Conventional batteries: Lead acid

Southern California Edison Chino facility (10 MW, 4 hour)

Sodium Sulfur batteries at Wind Farm Xcel Energy, Luverne, MN

Energy Storage Examples

Technology & Use

Beacon Power Corp. , Stephentown, NY 20 MW frequency regulation using Flywheels Urban Electric Power, City College Low cost zinc-manganese dioxide for demand management AES in Johnson City, NY* 8 MW lithium-ion storage system for frequency regulation

New York State examples

* Moved 6/13

Technology & Use

Energy Storage by Size and Application

Technology & Use

Key Applications for Storage

Grid Operations

• Demand Charge

Reduction (Peak Shaving)

• Optimize Energy Cost

(Time Shifting)

• Maintain Power

Quality

• Uninterruptible Power

Supply

• Integrate Distributed

Generation

Generation

• Defer System

Upgrades

• Transmission

Congestion Relief

• Improve System

Reliability

• Voltage Support and

Power Quality

• Frequency Regulation
• Renewable Firming
• Capacity (local)
• Spinning/non-

spinning reserve

• Black Start
• Avoid Energy

Dumping

• Time Shifting Energy
• Energy

Management

Technology & Use

Energy Storage in Buildings

Benefits

• Provide emergency backup
• Increase resiliency of the

grid

• Provide year-round benefits
• Manage demand charges
• Increase efficiency
• Participate in demand

response markets

• Facilitate renewable energy

integration

Source: Demand Energy

Technology & Use

Energy Storage in NYC - Examples

Technology & Use

Energy Storage in NYC - Examples

Technology & Use

Policy Snapshot for Energy Storage in NYC

Policy

Near term benefits (utility scale)

• Help integrate higher levels of renewable

generation on the grid.

• Improve power quality and reliability.
• Provide energy/demand cost savings via load

leveling.

• Decrease and/or defer transmission and

distribution infrastructure investment.

• Where applicable, reduce sizing of distributed

generation systems.

Policy

Potential future benefits

• Mitigation of demand variability from electric

vehicles

• Improved effectiveness of demand response

(via targeted dispatch)

• Improved grid reliability and efficiency by

improving power quality at the edges of the distribution network

Policy

Customer – Utility value interface

• Technology and demonstration incentives
• Rate tariffs
• Demand response programs
• Tech transfer

Policy

Recent Customer-Sited Energy Storage Goals

• California AB 2514 – 200 MW (of 1325 MW) by

2020

• New York – Reliability Contingency Plan (Order

posted 11/4/2013)

– Energy storage as part of 125 MW goal for Energy Efficiency, Demand Reduction and CHP – Con Edison territory, operational by Summer 2016 – $219 Million Program Budget

2014 2016 2018 2020 Total Customer Storage (all of CA) 23 35 58 84 200

Policy

NYS incentive opportunities for energy storage

Current Programs – Development/Demonstration Stage

• NYSERDA PON 2458 – NY-BEST Bench to Prototype

Solicitation

– Competitive, open to NY-BEST members – Up to 50% cost share, max. $250,000

• NYSERDA PON 1219 – Existing Facilities Program: Energy

Storage Incentive

– Open enrollment, performance-based funding – Commercial & industrial properties – Up to 50% cost share, max $2,000,000 – Incentive: $600/peak-kW reduced

Current Programs – Established Technologies

Policy

• Existing financing sources and incentives
• Tools to develop business models
• Data banks

Financing

Three-pronged approach

• 1703 Loan Program: Supports innovative clean energy technologies that are

typically unable to obtain conventional private financing due to high technology risks

• Eligibility:
• Applicant must be located in the U.S. (foreign ownership or sponsorship is

permissible as long as the project is located in the U.S.)

• Employ a new or significantly improved technology that is not a

commercial technology

• Meet Davis Bacon requirements
• ARPA-E: Advances high-potential, high-impact energy technologies that are too

early for private-sector investment

• Since 2009 ARPA-E has funded over 285 projects
• Example: CUNY Energy Institute Low-Cost Grid-Scale Electrical Storage Project

Using a Flow-Assisted Rechargeable Zinc-Manganese Dioxide Battery

• Energy Storage Technology Advancement Partnership
• NYSERDA

Financing

Existing financing sources

• Existing Incentives
• IRS Rulings:
• Number 201142005
• Number 201208035
• Number 201308005
• New York’s Green Bank
• $1 billion dollar initiative to accelerate the deployment of clean energy

through a variety of financing tools targeted at alleviating financing barriers

• Financial products:
• Credit enhancement
• Loan loss reserves
• Loan bundling to support securitization
• Full operation is expected in the first quarter of 2014

Financing

Existing financing sources

Tools to develop business models

Financing

• Why?
• Utilities and financiers are risk averse
• Market is replete with subsidized projects
• There is a need for projects that are profitable
• n their own and can attract private investment
• Key data for valuation mechanisms
• Monetization of value streams
• Technical performance
• Construction and operating costs

Financing Data Banks

Building The Business Case for Energy Storage in NYC Business Case Tool

Revenues and Benefits

Demand charge management Demand charges as per utility tariff account for 30-50% of annual electric charges for large energy users, especially June through September. ~$300 per watt annually. Demand response By committing to curtail electric consumption at peak hours, large energy users (bundled by Demand Response providers) earn annual and per-event payments from ConEd and NYISO: ~$135 per watt annually. Commodity arbitrage Via storage, building consumes lower-cost variable rate electricity at night, typically using less costly power (30% savings on supply, 15% on all-in electric rate) Renewable Integration Overcome distributed generation constraints: not being able to backfeed to grid e.g. Emergency Backup Power By combining storage with onsite renewable generation, store enough power during the day to power small-scale emergency electric loads in the event of grid failure. Frequency Regulation Address short-term supply-demand imbalances in grid (not revenue generating in NYC yet– coming soon).

System Performance & Reliability (Risk Mitigation) Peak Demand (Revenue Generating)

Business Case Tool

Solution & Technology Selection

• Project Sizing

– Peak analysis – Load analysis – Utilization factor

• Site Specifics

– HVAC system – Capital plan – Physical footprint – DG colocation

• 500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 7/19/2013 12:00 AM 7/19/2013 2:00 AM 7/19/2013 4:00 AM 7/19/2013 6:00 AM 7/19/2013 8:00 AM 7/19/2013 10:00 AM 7/19/2013 12:00 PM 7/19/2013 2:00 PM 7/19/2013 4:00 PM 7/19/2013 6:00 PM 7/19/2013 8:00 PM 7/19/2013 10:00 PM 7/20/2013 12:00 AM 7/20/2013 2:00 AM 7/20/2013 4:00 AM 7/20/2013 6:00 AM 7/20/2013 8:00 AM 7/20/2013 10:00 AM 7/20/2013 12:00 PM 7/20/2013 2:00 PM 7/20/2013 4:00 PM 7/20/2013 6:00 PM 7/20/2013 8:00 PM 7/20/2013 10:00 PM

Business Case Tool

Monetization & Risk

• Contracts

– Utility rate schedule – Energy supplier – Tenant lease arrangements – System operation – Demand response provider

• The Future

– Revenue forecasts – Revenue risks – Technology experience curve – Warranties & Guarantees

Large (>1.5MW peak D) EL-9 vs. SC14 (standby) Revenue growth rates Changes to building load Market vs. contracted revenues: bankability Batteries: cost and durability improvements Levelized vs. time of day pricing; flexibility

Business Case Tool

NYC Projects Database

4 4 12

Short Duration Battery Peak Duration Battery Thermal Storage

20 Projects

350 2,235 7,774

Short Duration Battery Peak Duration Battery Thermal Storage

10.4 MW

0.5 15.0 46.6

Short Duration Battery Peak Duration Battery Thermal Storage

62 MWh

• Short Duration Battery defined as < 3 hours (mostly Green Charge Networks).
• Long Duration Battery defined as 6 hours or more.
• Thermal Storage currently just Calmac projects.

Obvious gaps in the database! Help us build it.

Business Case Tool

Agrion Business Case Tool

Qualitative Analysis Questionnaire

• Building type
• Capital plan
• Onsite generation
• Building age, etc.

Storage Revenues, Benefits and Outlook

• Demand charges
• Demand response
• Frequency Regulation
• Etc.

Simple Bill Analysis Utilization Calculator

• kW and kWh levels
• Utilization factor
• Rate schedule

Projects Database

• Technology
• Revenues & Benefits
• Incentives & Financing
• Project Team
• Replicable/Applicable?

Potential Solution(s)

• Technology
• Revenues & Benefits
• Incentives
• Risks

[Or: low storage potential] Next Steps

• Solution provider

contacts

• Relevant links
• Project map
• Feedback
• 1. User Self-Triage
• 2. NYC Market Data
• 3. Actionable Guidance

Business Case Tool