Energy Storage: Power System Game Changer
Prepared for Minnesota Energy Storage Summit 2015
Janice Lin
Managing Partner, Strategen Consulting, LLC
Executive Director, California Energy Storage Alliance
Chair, Energy Storage North America
Chair, Global Energy Storage Alliance
July 14, 2015
Objectives
» Strategen CESA ESNA GESA Introduction
» Why Storage is a Game Changer
» California Update
» Share Lessons Learned
» Open Dialogue RE: Implications for Minnesota
» Find New Champions
Confidential
Introduction
Strategen Consulting
» Started consulting in PV and energy
storage space in 2005
» Unique focus in strategic advisory work
in the clean energy industry
California Energy Storage Alliance (CESA)
» Founded in January, 2009
» 80++ member companies
» Active in over 20 regulatory
proceedings at CPUC, CAISO, and CEC
Energy Storage North America (ESNA)
» Largest grid storage conference in the world
» 28 countries in attendance
» Next event: October 13-15, 2015 San Diego
Convention Center
© 2015 Strategen Consulting
3
Strategen Clients
Strategic thinking and industry expertise creates profitable clean energy businesses
A sampling of our clients:
U.S.
Department of
Energy
4
© 2013 California Energy Storage Alliance
CESA STEERING COMMITTEE MEMBERS
CESA 2015 MEMBERSHIP
1 Energy Systems Inc.
Abengoa
Advanced Microgrid Solutions
AES Energy Storage
Aquion Energy
ARES North America
Brookfield
Chargepoint
Clean Energy Systems
CODA Energy
Consolidated Edison Development, Inc.
Cumulus Energy Storage
Customized Energy Solutions
Demand Energy
Duke Energy
Dynapower Company, LLC
Eagle Crest Energy Company
East Penn Manufacturing Company
Ecoult
EDF Renewable Energy
Elevation Solar
ELSYS Inc.
Energy Storage Systems, Inc.
Enersys
EnerVault Corporation
Enphase ENERGY
EV Grid
Flextronics
GE Energy Storage
Green Charge Networks
Greensmith Energy
Gridtential Energy, Inc.
Hitachi Chemical Co.
Ice Energy
IMERGY Power Systems
Innovation Core SEI, Inc (A Sumitomo
Electric Company)
Invenergy LLC
K&L Gates
LG Chem Power, Inc.
LightSail Energy
Lockheed Martin Advanced Energy
Storage LLC
LS Power Development, LLC
Manatt, Phelps & Phillips, LLP
Mobile Solar
NEC Energy Solutions, Inc.
NextEra Energy Resources
NRG Solar LLC
OutBack Power Technologies
Panasonic
Parker Hannifin Corporation
Powertree Services Inc.
Primus Power Corporation
Princeton Power Systems
Recurrent Energy
Renewable Energy Systems Americas
Inc
Rosendin Electric
S&C Electric Company
Saft America Inc.
Sharp Electronics Corporation
Skylar Capital Management
SolarCity
Sony Corporation of America
Sovereign Energy
STEM
SunEdison
SunPower
Toshiba International Corporation
Trimark Associates, Inc.
Tri-Technic
Wellhead Electric
YOUNICOS
Steve Berberich
Doug Little
Anne McEntee
Pedro Pizarro
Michael Quinn
President & CEO
CAISO
Commissioner
AZ Corporation
Commission
President & CEO,
Renewables
GE Power & Water
President
Southern
California Edison
Vice President & CTO
Oncor Electric Delivery
Advance education, collaboration, knowledge and proven
frameworks about the benefits of energy storage globally
» Learn from local market development efforts, help proliferate best
practices
» Foster collaboration among key stakeholders including policy makers,
utilities, renewable energy community, financial institutions and
environmental organizations
» Help establish standards and protocols to advance energy storage
acceptance worldwide
Objectives
» Strategen CESA ESNA GESA Introduction
» Why Storage is a Game Changer
» California Update
» Share Lessons Learned
» Open Dialogue RE: Implications for Minnesota
» Find New Champions
© 2013 Strategen Consulting
Storage uses
a time-tested
tradition
© 2013 Strategen Consulting
9
We can bottle
sunshine and
wind
© 2013 Strategen Consulting
10
Power System Gamechanger:
ENERGY STORAGE
Storage is already a part
of our everyday lives
© 2013 Strategen Consulting
12
Many solutions are available today
Electro-Chemical
Mechanical
Bulk Mechanical
(Flow battery / Lithium Ion )
(Flywheel)
(Compressed Air)
Thermal
Bulk Gravitational
Transportation
(Ice / Molten Salt)
(Pumped Hydro)
© 2013 Strategen
Consulting
(Electric Vehicles)
Storage is
a fast
growing
California
industry
© 2013 Strategen Consulting
FACT
ASSUMPTION
Energy storage can
match renewable
generation to demand
Renewable energy
will be wasted
© 2013 Strategen Consulting
We make “jam”
out of sunshine.
Make it
Store it
Use it
© 2013 Strategen Consulting
16
Example 1: Self-consumption in Germany
Feed-in tariffs, high electricity rates, and the growing availability of storage
systems are making self-consumption a much more attractive option for
German solar producers
»“Self-consumption” refers to on-site energy production for on-site energy
consumption (while receiving value for electricity fed to the grid).
» The Rise of Self-consumption
in Germany:
FIT Rate for Small-Scale Systems versus Residential
Retail Electricity Rates in Germany
 Private electricity prices are now almost
twice as high as the cost of self-generated
solar electricity from the roof of a house
• Feed-in-tariff: €0.15
• Electricity rates: €0.27 -0.29
 Germany’s KfW Development Bank is
offering low-interest loans for the
installation of a combined PV and storage
system or for retrofitting an existing solar
plant with a battery.
Electricity Cost exceeds PV Cost
© 2013 Strategen Consulting
Example 2: We build peaker plants to do one job
Peaker Replacement
© 2013 Strategen Consulting
Comparing Energy Storage With The Status Quo
VS.
Natural Gas Peaker
Energy Storage
Key Criteria to Consider
•
•
•
•
•
•
•
•
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Siting Constraints
Installation Speed
Available Flexible Range
Capacity Factor (hours of
operation/year)
Multiple Value Stream Capture
Ramp/Response Rate
Total Emissions
Water Usage
© 2013 Strategen Consulting
Energy Storage Can Be Sited Closer to the Load
ES Siting Source: Powertree Integrated Energy Services
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© 2013 Strategen Consulting
Russell City Energy Center
Hayward, Ca
Energy Storage: Diverse, Modular, Faster to Install!
Battery and thermal storage resources can be installed much more quickly than
traditional resources, reducing risk and increasing technology flexibility
Siting, Permitting, and Installation Time by Resource
Battery/Thermal Storage
Combustion Turbine
Minimum Time
Maximum Time
CCGT
0
1
2
3
4
Time in Years
21
© 2013 Strategen Consulting
5
6
7
Energy Storage Can Respond Faster and is More Effective
Energy storage responds far more quickly and is more effective
LMS 100 Gas
Peaker Plant
Energy Storage
System
Full Power Ramp
Full Power Ramp
10 Minutes
<1 second
Graph Source: Kirby, B. “Ancillary Services: Technical and Commercial Insights.” Wartsilla, July, 2007. pg. 13
1. http://www.cpvsentinel.com/about.html
© 2013 Strategen Consulting
Energy Storage: Four Times the Flexible Range
Important to compare benefits, not megawatts
100MW
Max. Output
50 MW Range
50MW
Min. Output
100MW
Discharge
200MW Range
-100MW
Charge
100MW
Energy
Storage
System
100MW
LMS 100
Gas Peaker
Plant1
1. Source: http://yosemite.epa.gov/R9/air/EPSS.NSF/e0c49a10c792e06f8825657e007654a3/8a153d8ab24cb6868825723400679b82/$FILE/WCE%20Evaluation.pdf
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© 2013 Strategen Consulting
Energy Storage: Three Times the Utilization
Energy storage can be utilized more fully throughout the year
0%
50%
100%
Startup Time
Startup Time
Shutdown Time
Shutdown Time
Min Utilization
Min Utilization
Max Utilization
Max Utilization
Unutilized
0%
50%
100%
Unutilized
20%-40%
>95%
Utilization
Utilization
100MW
Energy
Storage
System
100 MW
LMS 100
Gas Peaker
Plant1
1. Source: http://yosemite.epa.gov/R9/air/EPSS.NSF/e0c49a10c792e06f8825657e007654a3/8a153d8ab24cb6868825723400679b82/$FILE/WCE%20Evaluation.pdf
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© 2013 Strategen Consulting
PEAKER
STORAGE
Years to install
Months to install
Slow to respond
Fast to respond
Does one thing
Does many things
Dirties air
Keeps air breathable
Used 5% of time
Used 95% of time
Wastes water
Water saver
© 2013 Strategen Consulting
.
© 2013 Strategen Consulting
FACT
ASSUMPTION
Energy storage isn’t
viable.
© 2013 Strategen Consulting
Energy storage is
already saving money
throughout the US
Energy Storage in the news (April-May 2015)
© 2013 Strategen Consulting
Validation of Cost Effectiveness: SCE (2014)
Southern California Edison chose to procure over 5x the amount of energy
storage than required by the CPUC to meet Local Capacity Requirements (LCR)
» 50 MW of energy storage required. 261 MW Procured
» Over 1,800 offers of all resource types competing
Seller
Resource Type
Total
Contracts
Max
Quantity
(LCR MW)
Selected Energy Storage Resources
AES
In-Front-of-Meter Battery Storage
1
100.0
Advanced
Microgrid
Solutions
Behind-the-Meter Battery Storage
4
50.0
Ice Energy
Behind-the-Meter Thermal Storage
16
25.6
NRG Energy
Behind-the-Meter Battery Storage
1
0.5
Stem
Behind-the-Meter Battery Storage
5
26
85.0
261.1
Total
Source: SCE RFO winners. https://www.sce.com/wps/portal/home/procurement/solicit1n/lcr
© 2013 Strategen Consulting
Objectives
» Strategen CESA ESNA GESA Introduction
» Why Storage is a Game Changer
» California Update
» Share Lessons Learned
» Open Dialogue RE: Implications for Minnesota
» Find New Champions
© 2013 Strategen Consulting
California: Home to the World’s Largest…
Geysers Geothermal Plant
955 MW – Lake County, CA
Solar Star Silicon PV Project
579 MW – Kern County, CA
Alta Wind Energy Center
1550 MW - Kern County, CA
SCE Tehachapi Li-Ion Battery
8 MW/32 MWh – Tehachapi, CA
Ivanpah Solar Thermal Project
393 MW - San Bernardino, CA
Desert Sunlight Thin-Film PV
550 MW – Riverside, CA
© 2013 Strategen Consulting
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California as a Role Model
2013 California – AB 2514
Sets 1.325 GW energy storage target - passed
2014 Arizona – All-Source Procurement with Storage Carve-out
required for Arizona Public Service
2014 Hawaii – PUC directed HECO to prepare energy storage plans.
Large RFP issued for up to 200 MW of energy storage
2015 Oregon – HB 2193
Sets 5 MWh energy storage target – passed
2015 US Senate – Energy Storage Promotion and Deployment Act of
2015
Sets national mandate equal to 2% of 2024 peak load introduced
Takeaway
California can be a learning lab for other jurisdictions
© 2013 Strategen Consulting
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Variety of factors Advancing Energy Storage in CA
» AB 2514
▪ 1,325 MW procured by 2020
» Renewables integration driving need for Flexible Capacity
▪ Estimated 7,500 – 11,000 MW of flexibility needed
» Long Term Procurement Planning from OTC and SONGS retirement (6,029
MW OTC retiring by 2024)
▪ SCE
(50 – 600MW)
▪ SDG&E
(25 – 300MW)
» CAISO Reforms to Wholesale Market
▪ Market design updates specific to storage
▪ Storage being considered in transmission planning process
▪ Updates to interconnection process
» SGIP - $83M/year through 2019
» Net Energy Metering / Rate Design
33
Confidential, Copyright 2015 Strategen Consulting LLC
California Policy Landscape – Leadership From Our Governor
Governor Jerry Brown’s State of the State Address
January 5, 2015
2013
2020
Governor’s ambitious new clean energy 2030 goals:
» Increase renewable electricity use from 33% to 50%
» Reduce petroleum use in cars & trucks by up to 50%
» Double the efficiency of existing buildings and make fuels cleaner
» Reduce emissions to 40% below 1990 levels (April Executive Order)
© 2013 Strategen Consulting
2030
© 2013 Strategen Consulting
35
Energy storage accepted as key to enable greater grid flexibility
CAISO estimate: system-wide 2014 flexible capacity requirement of
7,520 MW (May) to 11,212 MW (Dec)
Actual Net Load Curve for April 12, 2014
43% of
prices were
zero or
negative
Chart Source: Prepared statement of Mark Rothleder on behalf of the CAISO (February 20, 2015). http://www.ferc.gov/CalendarFiles/20150220110211-Rothleder,%20CAISO.pdf
* Source: CAISO Final 2014 Flexible Capacity Needs Assessment May 2014
© 2013 Strategen Consulting
Significant renewable curtailment forecasted at 40% RPS
Estimated Renewable Curtailment Frequency and Magnitude in 2024 at 40% RPS
Source: Phil Pettingill, Governor’s Greenhouse Gas Reduction Goals http://www.caiso.com/Documents/Presentation_Governor50Workshop_PPettingill_7-9-15.pdf
© 2013 Strategen Consulting
Governor Brown Sponsored AB 2514 in 2010
Resulting CPUC Requirement: 1.325 GW in operation by 2024
Use case category, by
utility
2014
2016
2018
2020
Total
Transmission
Distribution
Customer
50
30
10
65
40
15
85
50
25
110
65
35
310
185
85
Subtotal SCE
Pacific Gas & Electric
90
120
160
210
580
Transmission
Distribution
Customer
50
30
10
65
40
15
85
50
25
110
65
35
310
185
85
Subtotal PG&E
90
120
160
210
580
Transmission
Distribution
Customer
10
7
3
15
10
5
22
15
8
33
23
14
80
55
30
Subtotal SDG&E
20
30
45
70
165
Total – all 3 Utilities
200
270
365
490
1,325
Southern California Edison
San Diego Gas & Electric
© 2013 Strategen Consulting
Results of Strategen’s Production Cost Modeling with Storage
% of total CA
Generation Capacity
Unit Starts
Reduced in CA*
Curtailment
Reduction in CA
0.4125 GW Storage
(only 2 hour storage)
1.325 GW Storage
(2, 4, & 6 hour
storage)
2.65 GW Storage
(2, 4, & 6 hour
storage)
0.5%
1.7%
3.4%
3,000
8,000
13,000
8.1%
23.3%
40.0%
*Numbers are rounded for simplicity
» Even a small amount of energy storage makes a big system impact
» There are diminishing returns to additional storage, but the benefits have
not yet plateaued
» Under the storage scenarios, 3-4 emergency peaker natural gas plants were
removed from dispatch
39
© 2013 Strategen Consulting
California utilities are far exceeding their mandated targets
(Figures in MW)
2014 Proposed Procurements
CPUC
2014
(Existing or In
Target
Progress)
(AB 2514)
IOU
Transmission
Distribution
Customer
Total
50
21.5
6.5
78
12*
90
Open Ended
16.3
0
>16.3
280**
90
SDG&E
10
6.0
0
16
86***
20
Totals
>60
43.8
6.5
>110.3
378
200
PG&E
SCE
Source: California Public Utilities Commission
*Excludes 150 MW Rice Solar – to be counted in future solicitations
**Includes 261 MW of storage projects under procurement from December 2013 LCR solicitation
***Includes 40 MW Lake Hodges Pumped Hydro and min 25MW LTPP Track 4 LCR requirement by 2022
© 2013 Strategen Consulting
Validation of Cost Effectiveness: SCC Track 1 LCR RFO (2014)
Southern California Edison chose to procure over 5x the amount of energy
storage than required by the CPUC to meet Local Capacity Requirements (LCR)
» 50 MW of energy storage required. 261 MW Procured
» Over 1,800 offers of all resource types competing
Seller
Resource Type
Total
Contracts
Max
Quantity
(LCR MW)
Selected Energy Storage Resources
AES
In-Front-of-Meter Battery Energy Storage
1
100.0
Ice Energy
Behind-the-Meter Battery Energy Storage
16
25.6
Advanced
Microgrid
Solutions
Behind-the-Meter Battery Energy Storage
4
50.0
Stem
Behind-the-Meter Battery Energy Storage
5
85.0
26
260.6
Total
Source: SCE RFO winners. https://www.sce.com/wps/portal/home/procurement/solicitation/lcr
© 2013 Strategen Consulting
SCE Energy Storage LCR RFO Results
Contracted Energy Storage
(261 MW)
Ice Energy
Total Energy Storage Offered
(1590 MW)
Holdings,
Inc.
CustomerConnected
1
Stem
GridConnected
AES
2
Advanced
Microgrid
Solutions
NRG
Energy,
Inc.
Counterparty
Technology
AES; NRG Energy, Inc.
Large scale lithium ion battery installation
Advanced Microgrid
Solutions; STEM
Distributed customer-sided lithium ion battery installations that offer
Demand Response-like load drop
Ice Energy Holdings, Inc.
Distributed customer-sided thermal storage that reduces Air
Conditioning load
Source: SCE
© 2013 Strategen Consulting
Distributed storage will play a key role
The Self Generation Incentive Program (SGIP) is one of the longest-running
and most successful distributed energy resource incentive programs in the US
» Incentive program launched in 2001 to encourage customer sited distributed
generation. Provides financial incentives for the installation of qualifying technologies
installed to meet all or a portion of the electric energy needs of a facility.
» Annual Budget: $83million (through 2019)
Capacity
Incentive Rate (% of Base Cost)
» $1.42/Watt for Advanced Energy Storage
(min 2 hours duration)
0 – 1 MW
100%
1 – 2 MW
50%
» Administered by CA utilities
2 – 3 MW
25%
» New program criteria (2015-2019):
 Cost effectiveness of Greenhouse Gas (GHG) emission reductions over the useful
life of the resource will determine eligibility and incentives levels.
 Reductions of aggregate, non-coincident customer peak demand and improved
onsite electricity reliability.
© 2013 Strategen Consulting
SGIP Reservations - 2014
2014 Allocation by Technology
Energy Storage 2014 Funding Allocations
$1,150,067
Technology
$1,166,400
$3,742,120
Wind Turbine
Gas Turbine
Microturbine
Internal Combustion
Fuel Cell CHP
Fuel Cell Electric
A.E.S.
$7,192,022
% of Incentive
2.0%
2.3%
3.5%
4.9%
6.4%
34.9%
46.0%
$7,196,735
Other
Danko Enterprises
$66,015,336
CODA Energy
Green Charge Networks
Stem Inc
Tesla
Grand Total: $86,462,681
67% of December 2014
reservations were from Tesla
($20.5M)
Data source: SGIP Quarterly Statewide Report
Note: Total 2014 SGIP budget was $165M (includes carryover funds from prior years)
© 2013 Strategen Consulting
AB 327: Net Metering 2.0 Actions and Impacts
Action
Impact on Energy Storage
•
•
•
Lifts caps imposed on rate increases levied during the energy crisis
Allows IOUs to develop tariffs with fixed charges
Such charges would be capped at no more than $10/month for
residential and $5/month for CARE customers. Starting Jan 1 2016, the
fixed charges can increase by CPI.
•
Fixed charges can be good or bad for
storage. If they are time based, more
similar to demand charges, then they
could promote storage adoption
•
Beginning January 1, 2018, the CPUC may require or authorize an
electrical corporation to employ default TOU pricing to residential
customers.
•
TOU pricing may make residential
behind the meter load shifting
attractive for storage, but will not
entirely justify storage systems.
•
Beginning July 1, 2017, electrical corporation (>100,000 customers) must
provide new NEM tariff (or earlier, if they met their 5% aggregate peak
demand NEM cap)
•
NEM rules affect behind the meter
storage value proposition. Tariff
details will determine the final impact.
•
New NEM tariff to be developed by Dec 31, 2015 (note: applies to solar,
wind and fuel cells)
•
Requires electrical corporations to consider non utility owned DERs as
an alternative to investments in their distribution system.
Requires by July 1, 2015 for all electrical corps to submit to the CPUC a
distribution resources plan to help identify optimal locations for DERs.
•
Understanding where there are
opportunities in the distribution
system is a great application for
storage.
2013 Strategen Consulting
Defines the RPS target of 33% as a floor, not a©ceiling.
•
More renewables means more
opportunity for storage.
•
•
Objectives
» Strategen CESA ESNA GESA Introduction
» Why Storage is a Game Changer
» California Update
» Share Lessons Learned
» Open Dialogue RE: Implications for Minnesota
» Find New Champions
© 2013 Strategen Consulting
Lessons Learned from California Experience
Leadership + Focus + Collaboration =
Progress
© 2013 Strategen Consulting
Importance of
Leadership
What you focus on is what you get!
© 2013 Strategen Consulting
Best Practices for Stakeholder Engagement: Focus!
STEP 0
Create broad
awareness of about
the role of grid
storage
STEP 4
Independently assess
the system value of
storage applications
versus status quo
alternatives
STEP 1
Identify and engage
with key stakeholders
STEP 5
Reconvene results
and prioritize
applications with
greatest benefits
STEP 2
Determine regionally
appropriate
applications
considering both
supply and demand
STEP 6
Determine the
barriers to applying
storage in high
priority applications
© 2013 Strategen Consulting
STEP 3
Identify status
quo alternatives
to storage
applications
STEP 7
Work with key
stakeholders to
build practical
implementation
plans and
programs
Collaboration is the key to success
Collaboration Best Practices
1. Leadership – individual champions
2. Stakeholder Engagement - establish
common understanding of how
storage can be used
3. System Analysis - agreed upon
approach to cost effectiveness
4. Technology neutrality - monetize
services delivered
5. Consistency - legal and regulatory
framework to monetize value
streams and overcome barriers
6. Sharing - leverage tools/best
practices/experiences of others
© 2013 Strategen Consulting
Objectives
» Strategen CESA ESNA GESA Introduction
» Why Storage is a Game Changer
» California Update
» Share Lessons Learned
» Open Dialogue RE: Implications for Minnesota
» Find New Champions
© 2013 Strategen Consulting
Minnesota Electricity Overview
»
MISO: Midcontinent Independent
System Operator
 Over 170,000 MW generation capacity
(Market)
»
Minnesota State Energy Profile
 Coal-fired power plants provide nearly
50% of generation
 Nuclear power plants provide around
20% of generation
 Wind power provides 15% of
generation
Energy Information Administration, 2013
© 2013 Strategen Consulting
Energy storage is like bacon
It goes well with everything!
53
© 2013 Strategen Consulting
Energy Storage in Minnesota (source: DOE database)
» Total kW: 1297 kW of storage
▪ (1) Sodium-Sulfur Battery: 1,000 kW
▪ (9) Lead-Acid Batteries: 297 kW
» XCEL Minwind Wind-to-Battery Project
Luverne, Minnesota
Technology Type
Sodium-Sulfur
Battery
Rated Power in kW
1,000
Duration at Rated
Power (HH:MM)
7:12
© 2013 Strategen Consulting
Previous Strategen Work
»
Utility Controlled Energy Storage
▪
Improves energy and grid efficiency
▪
Delivers backup power to consumers
▪
Reduces greenhouse gas emissions
▪
Can align wind and solar energy with peak grid
demand and intermittency
»
Made in Minnesota Energy Storage Program
▪
Create a statewide energy incentive program
▪
Reduce costs through debates of utility controlled,
customer sited energy storage equipment if
manufactured in Minnesota
© 2013 Strategen Consulting
Benefit-to-Cost Ratio Ranges by Modeled Use Case
For each case, a benefit-to-cost (B/C) ratio was generated to show the direct,
quantifiable fixed and variable costs and benefits, incorporating the time value of
money, for the modeled project over its lifetime.
A benefit to cost ratio greater than one means that the modeled benefits exceed
the project costs; in other words, the net present value (NPV) was greater than
zero, and for this study had an return (IRR) greater than the 11.5% discount rate
© 2013 Strategen Consulting
Whitepaper Conclusions for Minnesota
1. Energy storage has the potential to provide multiple sources of value for
customers and utilities.
2. Utility controlled, customer sited storage in Minnesota has the potential to
provide benefits to the grid greater than the system’s cost.
3. Customer sited commercial and residential storage that relies upon customer
tariffs were not able to achieve a benefit to cost greater than one.
4. Reliability (backup power) and voltage support service benefits of energy
storage, while conceptually attractive, have not been found to be materially
sufficient to significant impact the cost-effectiveness of energy storage.
5. Certain storage benefits can vary by utility type. Energy storage should be
modeled according to the benefits within a specific utility and to best suit
each utility’s characteristics.
© 2013 Strategen Consulting
Objectives
» Strategen CESA ESNA GESA Introduction
» Why Storage is a Game Changer
» California Update
» Share Lessons Learned
» Open Dialogue RE: Implications for Minnesota
» Find New Champions
Confidential, Copyright 2015 Strategen Consulting LLC
Anyone can be a Champion!
Meet Lon Huber, Strategen Director
» Prior to joining Strategen, served in the Arizona consumer
advocate office (RUCO) where he was the staff lead on
resource procurement and distributed generation
» Negotiated an agreement between Arizona Public Service
(APS) and RUCO to require APS to analyze (with an
independent evaluator) storage, efficiency, renewables and
demand response as a potential alternatives prior to building
or upgrading conventional power plants
» Required APS to utilize energy storage as a companion
resource to new natural gas peaking plants equal to at least
10% of the natural gas plant’s capacity
» Mandated at least 10 MWh of operational storage by 2018
Confidential, Copyright 2015 Strategen Consulting LLC
It takes a village
Confidential, Copyright 2015 Strategen Consulting LLC
© 2013 Strategen Consulting
Helpful Links for More Information
Founder & Managing Partner
Strategen Consulting
» Strategic advisory exclusively in clean energy
» Clients: governments, utilities, corporations
» www.strategen.com
Co Founder & Board Chair
Global Energy Storage Alliance (GESA)
» Educational non profit founded January 2014
» www.globalesa.org
Co Founder & Executive Director
California Energy Storage Alliance (CESA)
» Industry advocacy group founded in January 2009
» 90+ member companies
» www.storagealliance.org
Co Founder & Conference Chair
Energy Storage North America (ESNA)
» Largest storage conference in the world
» Next event: October 13-15, 2015 San Diego
Convention Center.
» www.esnaexpo.com
© 2013 Strategen Consulting
Questions?
Janice Lin
Managing Partner
2150 Allston Way, Suite 210
Berkeley, CA 94704
www.strategen.com
O 510 665 7811x101
M 415 595 8301
F 888 453 0018
jlin@strategen.com
© 2013 Strategen Consulting
Countries Leading Energy Storage Deployment (non-hydro)
© 2013 Strategen Consulting
Global Projected Energy Storage through 2020
© 2013 Strategen Consulting
Operational Energy Storage (non-hydro)
© 2013 Strategen Consulting
Planned Operational Energy Storage (non-hydro)
© 2013 Strategen Consulting
Tesla’s Powerwall – the power of Consumer Demand
Tesla unveiled its stationary storage product, Powerwall, on April 30, 2015.
The battery charges from solar PV, or when utility rates are low.
»Intended for Germany self-consumptions market
»SOLD OUT until mid 2016 in North America!
» Transformative
consumer demanddriven sales
»Tesla’s unveiling was a
great PR event for the
entire storage industry
© 2013 Strategen Consulting
CAISO reforms enabling storage in wholesale market
» Market Design – New rules for storage set for:
 Effective flexible capacity / Flexible RA
 Net qualifying capacity / System and Local RA
 Distributed energy resources
» Transmission Planning
 Non-Conventional Resource study methodology
piloted in 2013; implemented system-wide in
the 2014 study process
Cluster 8 closes on April 30th. We will
update with new information as it
becomes available.
» Resource Interconnection
 Approximately half of CAISO’s most recent applications have storage
components representing more than 2,300 MW of new storage capacity
 CAISO allowing generators to add storage to existing projects
 Generator interconnection process under reform
© 2013 Strategen Consulting
Utility-Managed, On-Site Energy Storage in Minnesota
Presentation Prepared for the Minnesota Department of Commerce, Division of Energy Resources
»
In 2013, the Minnesota Department of Commerce contracted with Strategen and the Electric Power Research
Institute to investigate the potential costs and benefits of grid-connected electrical storage technology located at
the utility customer in Minnesota
»
»
Strategen found that utility controlled, customer sited storage in Minnesota has the potential to provide benefits
to the grid greater than the system’s costs and may need to capture THREE of the FOUR following key benefits to
be economic:
a.
Distribution upgrade deferral
b.
Frequency regulation
c.
System capacity
d.
Co-located and configured with PV to capture the Federal Investment Tax Credit (FITC)
Customer controlled, customer sited storage that relies upon customer tariffs alone did not result in economic
value without incentives
© 2013 Strategen Consulting
Use Cases
Case 2: Utility Controlled – Distribution Only
Case 1: Customer Bill Savings
»
Storage can shift from on-peak to off-peak night
»
Storage can “shave peaks” of usage to reduce demand
»
avoid new capital expenditure
»
charges
»
Storage can “shave peaks” from circuit loads to defer or
Storage may also provide both real power and reactive
power to manage high penetration solar
Storage may be available to provide back-up power if
configured as a uninterruptible power supply
»
»
Results reveal challenging economics for customer
Substantial value from upgrade deferral possible but
typically insufficient as a single benefit stream to justify
controlled storage without additional incentives
the costs of an energy storage system
Case 3: Utility Controlled - Distribution + Market
»
Case 4: Shared Control
Similar “peak shaving” operation of storage may also
»
Customer demand bill savings top priority
offset the buildout of new generation
»
Potential to capture FITC when properly co-located and
configured with a PV system
»
Wholesale energy and ancillary services markets provide
»
additional revenue
»
Market ancillary service value off-peak when customer isn’t
using it
Benefit stacking can provide a cost-effective outcome with
»
Market participation benefit stacking in conjunction with PV
simultaneous need for generation & distribution upgrades,
significantly improves the economics as compared to the
and access to operational market benefits
Customer Only Control (Use Case #1)
© 2013 Strategen Consulting
Overall Modeling Conclusions
» Current tariffs in Minnesota do not show clear customer ownership
benefit
» Cost-effective cases stacked multiple major benefits, including
distribution deferral, system capacity, frequency regulation, and solar
investment tax credit
▪ Benefit stacking may have near-term technical and regulatory
challenges
» Existence of distribution deferral and system capacity is limited by
“need”, defined in utility IRP and distribution planning processes
▪ Typically requires load growth
» New storage “need” may emerge when new flexibility constraints arise
from large penetrations of wind & solar
▪ California is working to develop new tools and methods to plan for
flexibility need and assess resources
© 2013 Strategen Consulting