Presenting a live 90-minute webinar with interactive Q&A Renewable Energy Storage: Implementing Projects, Overcoming Co-Location Challenges, and Mitigating Risks TUESDAY, JULY 25, 2017 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Becky H. Diffen, Esq., McGuireWoods , Austin, Texas Brian Orion, Of Counsel, Stoel Rives , San Diego Joseph D. (Seph) Petta, Esq., Shute Mihaly & Weinberger , San Francisco The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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Renewable Energy Storage Joseph D. (Seph) Petta Shute Mihaly & Weinberger petta@smwlaw.com
Energy Storage Technologies • Solid State Batteries - a range of electrochemical storage solutions, including advanced chemistry batteries and capacitors • Flow Batteries - batteries where the energy is stored directly in the electrolyte solution for longer cycle life, and quick response times • Flywheels - mechanical devices that harness rotational energy to deliver instantaneous electricity • Compressed Air Energy Storage - utilizing compressed air to create a potent energy reserve • Thermal - capturing heat and cold to create energy on demand • Pumped Hydro-Power - creating large-scale reservoirs of energy with water Source: Energy Storage Association, http://energystorage.org/energy- storage/energy-storage-technologies 6
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Costs Continue to Decline Forecast Installed Cost, 100 MW / 4-hour Lithium-Ion $2,000 $1,800 $1,600 $1,400 Installed Cost ($/kW) $1,200 $1,000 $800 Figure 3 Forecast Installed Cost, 100 MW / 4-Hour Lithium-Ion Storage $600 $400 $200 $- 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Uppe $ 1,814 $ 1,549 $ 1,337 $ 1,209 $ 1,083 r Lowe $ 1,660 $ 1,315 $ 1,056 $ 911 $ 774 r Upper: GTM install costs, BNEF experience curve (low end, 14%), Navigant global installs Lower: IHS install costs, BNEF experience curve (high end, 19%), Navigant global installs 8
Energy Storage – Applications and Services Generation Applications Infrastructure Applications Cross-cutting Applications • Bulk Energy Services • Transmission Services • Peak Demand Reduction • Electric Time Shift • Network Capacity • Energy Management • Electric Supply Capacity • Congestion Relief Services • Renewables Integration • Time-Varying Rate • Firming • Distribution Services Management • Curtailment Avoidance • Network Capacity • Demand Charge • Spinning and Non- • Voltage/VAR Support Management Spinning Reserve Capacity • T&D Upgrade Deferral • Reliability Services • Back-up Power • Ancillary Services • Increased Hosting • Black Start • Frequency Response & Capacity Regulation • System Flexibility • Ramping / Load • Area Regulation Following • Power Quality • Voltage/VAR Support 9
Cost-Benefit Analysis • Massachusetts’ State of Charge Report an excellent example of storage cost-benefit analysis Source: MA DOER State of Charge Report, 2016. Note: Graph recreated from original “State of Charge” report. 10
State Policy & Regulatory Actions on Energy Storage DC Note: Map is not reflective of all state activities on energy storage. Certain early stage policy/regulatory 11 efforts, grant programs and/or pilot projects may not be reflected.
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Barriers to Storage’s Deployment VALUE STREAM CLASSIFICATION & OWNERSHIP GRID ACCESS PLANNING 13
Types of Storage Policy Support 14
States with Storage Incentives California : SGIP program modified in 2016 to focus on storage, • and more incentives under consideration this legislative session Maryland : Legislature passed first-of-its-kind tax incentive bill • (SB 758) in 2017 session Massachusetts : SMART incentive program includes adder for • systems with storage Nevada : Legislature passed AB 145 for storage in the solar • incentive program (SESIP) New Jersey : Renewable Energy Storage Incentive Program for • customer-sited storage at critical facilities 15
States with Procurement Targets California : First-in-the-nation 1.325 GW procurement target for • storage by 2020; later increased by 500 MWs Oregon : Legislature passed HB 2193 in 2015 calling on the • Commission to set 2020 procurement targets up to 1% of peak load; currently being implemented Massachusetts : State legislature considering 2030 targets and • DOER just released target for 200 MWh by Jan 1, 2020 New York : Regulator ordered initial procurements (2 projects • per utility) and legislature passed SB 5190 / A 6571 to create 2030 procurement targets Nevada : Legislature passed SB 204 calling on a study to inform • biennial increasing procurement targets in 2017 16
IRPs and Storage IRPs are used in ~25 states • Utilities planning to invest billions of dollars in • new and replacement capacity over the next several years Planning models not granular enough to • capture operations of advanced storage Models use inaccurate and out-of-date cost • information Models should ensure storage is included as • eligible technology and ensure stacked benefits (net cost of capacity) are considered 17
Why Does Interconnection Matter? • Without permission to interconnect a system has no access to the market. And storage systems need interconnection approval even for purely behind-the- meter services • Interconnection Rules were not written with storage resources in mind (focused solely on “generation”) • Easy solutions: • Include storage in procedures • Ensure rules about jurisdiction are clear • Don’t apply 20 th century assumptions to 21 st century technologies 18
States Advancing Storage Access • States updating their interconnection procedures to include storage: California – Rule 21 • Hawaii – Rule 14H and Rule 22 • Nevada – Rule 15 update • Maryland – PC 44 interconnection working • group NC, MN, AZ, and others considering revisiting • 19
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Renewable Energy Storage: Implementing Projects, Overcoming Co-Location Challenges, and Mitigating Risks Presented by Becky H. Diffen, McGuireWoods LLP bdiffen@mcguirewoods.com Brian Orion, Stoel Rives LLP brian.orion@stoel.com July 25, 2017
Co-location of energy storage with wind and renewable energy
S TORAGE AND THE ITC Source: NREL (Jan. 2017) 23
S TORAGE AND THE ITC Source: NREL (Jan. 2017) 24
S TORAGE D EVELOPMENT C ONTRACTS • Equipment Supply • Engineering, Procurement and Construction (EPC) • Operation and Maintenance (O&M) • Energy Services / Shared Savings Agreements Source: NREL (Jan. 2017) 25
P ARTICIPATING P ARTIES • Role of various entities – More parties = more complication – Special purpose entity • Credit support & solutions 26
C OMPLETION S CHEDULE • Project milestones and schedule – Permitting – Interconnection • Delays – Owner Caused Delay – Third Party Delay • Liquidated damages 27
C HANGES • Change in Law • Regulatory • Force Majeure • Change Orders 28
I NTELLECTUAL P ROPERTY I SSUES • Hardware vs. software • Ownership of inventions • License to project data • Privacy issues 29
W ARRANTIES • Hardware • Software • ITC warranty 30
G UARANTEES • Part of O&M or Energy Services Agreement • Savings guarantee • Exclusions 31
I NDEMNITIES 32
O WNERSHIP OF I NCENTIVES • Direct sale - Customer owns • Energy Services – may be shared • Covenant to cooperate • Consequential damage waiver 33
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