Large-Scale Energy Storage

Dave Mooney, Ph.D. GCEP Tutorial Series October 14, 2015

NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC. Why is everyone talking about energy storage? 2 Understanding Large-scale Energy Storage

Questions we’ll address in today’s tutorial: • Why does energy storage matter? • What are key energy storage technologies? • How much energy storage is online today? • What are key R&D areas for storage technology? • How much renewable generation can go on the grid before storage is required?

3 Energy Storage: Why It Matters

Key References • DOE/EPRI Electricity Storage Handbook (2015) • Electricity Storage – Schlumberger SBC Energy Institute (2013) • Renewable Electricity Futures Study (2012) Electric Grid: A Matter of Balance

Supply

Supply Demand Components Components

Storage Storage

Renewable Electric Generators Vehicles

Conventional Stationary Generators End Use

Demand

The electric grid balances supply and demand at all times and operates at timescales from seconds to days.

5 Conventional Utility Operations

Hydro

Combined Cycle Gas

Coal

Nuclear

Utilities are accustomed to managing variability and uncertainty in the load with dispatchable generation.

6 Wind and Solar Add Variability to Supply Side

Wind and solar add variability and uncertainty to the generation supply, increasing the need for grid flexibility.

7 Solar Variability

8 Solar Variability

9 Flexibility Essential to Maintaining Balance

Supply-Side Demand-Side Flexibility Flexibility

Storage Storage

RE Demand Curtailment Response

Flexible Smart Loads Generation

Storage is one of many options for providing more flexible supply and demand at multiple timescales.

10 Market Design Impacts Flexibility Options

Days Energy Capacity Markets Markets Ensure resource Dispatch adequacy grid Hours resources Ancillary on economic Services basis Markets Provide Minutes fast response to changes in load to maintain frequency stability

Seconds

Market design can impact operational mechanisms to support power system flexibility and reliability.

11 Energy Storage Applications Span the Grid

TRANSMISSION GENERATION Centralized or Large centralized distributed energy energy storage for storage for time-shifting energy Centralized renewable generation, management and Generation congestion ancillary services management, and Transmission upgrade deferments Lines

END USERS Energy storage for backup or high- DISTRIBUTION quality power for Energy storage to Distribution commercial and support small Lines industrial users distributed generation, energy management, and to END USERS help defer system Small scale energy upgrades storage for residential and commercial backup, time-shifting and micro-generation

12 Storage Can Help Smooth the Demand Curve

Seconds-to-Minutes and Minutes-to-Hours Storage helps follow the variation in net load.

Hourly Storage smooths the load to avoid activating more generation.

Daily, Weekly, Seasonally Storage reduces the peak/off Time peak range during periods of peak demand.

Storage can work at all timescales to smooth peaks and valleys in the demand curve.

13 Energy Storage Technologies: Characteristics and Applications Grid Application Depends on Storage Characteristics

Different technologies can address different grid needs, but no single storage technology, in the near term, is likely to meet all grid applications.

15 Storage Technology Maturity

Type Laboratory / Pilot / Demonstration Commercial / Mature Research Development Deployment Mechanical Pumped Storage Hydro Electro- Adiabatic Compressed Air Compressed Air mechanical Compressed Air Energy Storage Energy Storage Energy Storage (2nd gen) (1st gen), Flywheel Energy Storage

Thermal Molten Salt Energy Storage Electrical Nano- Supercapacitor, Supercapacitor Superconducting Magnetic Energy Storage Electro- Zn/air, Zn-Cl, Li-ion, Fe/Cr, ZnBr, NiMH, Lead-Acid, NiCd, Lead-Acid chemical Advanced Li-ion, NaNiCl2 Advanced Lead- Sodium-Sulfur Batteries Novel Battery Acid, Li-ion Batteries, Li-ion Chemistries Batteries

Chemical Hydrogen Storage, Hydrogen storage Synthetic Natural Gas Storage Most storage technologies need to mature. Pumped storage is the only technology deployed at GW scale.

16 Pumped Storage Hydro

Primary Application: Energy Management

17 Pumped Storage Hydro

Global Operational Capacity: ~142 GW U.S. Operational Capacity: ~20 GW

Technology Characteristics Power Capacity: 100 – 1,000 MW Discharge Time: 4 – 12 hours Response Time: seconds - minutes Efficiency: 70-85% Lifetime: >30 years

Primary Grid Application Energy Management

nrel.gov/docs/fy15osti/62361.pdf

18 Pumped Storage Hydro

Pros • Cheapest way to store large quantities of energy with high efficiency over a long time • Mature technology

Cons • Lack of suitable sites • Not fitted for distributed generation • Relatively low energy density results in indirect environmental impact

nrel.gov/docs/fy15osti/62361.pdf

19 Thermal Storage

Primary Grid Application: Shifting or smoothing output for Concentrating Solar Power

20 Molten Salt Energy Storage

Global Operational Capacity: ~1.3 GW U.S. Operational Capacity: 281 MW

Technology Characteristics Power Capacity: MW Scale Discharge Time: hours Response Time: minutes Efficiency: 80-90% Lifetime: 30 years

Primary Grid Application Shifting and smoothing output for CSP plants

21 Molten Salt Energy Storage

Pros • Commercial • Large scale • Most economically viable storage for solar

Cons • Niche for concentrating solar power plant applications • Molten salts can be corrosive

22 Electrochemical Storage

Multiple Grid Applications: Smoothing RE output, black start services, T&D Deferral, shifting RE output

23 Lithium-Ion Batteries

Global Operational Capacity: 287 MW U.S. Operational Capacity: 115 MW

Technology Characteristics Power Capacity: W to MW Discharge Time: 1 minute – 8 hours Response Time: 10-20 milliseconds Efficiency: 85-98% Lifetime: 5-15 years

Primary Grid Application RE smoothing RE output shifting T&D investment deferrals

24 Lithium-Ion Batteries

Pros • High efficiency • Extensive experience for portable applications • Suitable for small to medium scale applications

Cons • Limited lifecycle • Environmental and safety considerations • Thermal management

25 26 Tesla Gigafactory

27 Tesla Gigafactory

28 Supercapacitor

Primary Grid Application: Power Quality

29 Supercapacitors

Global Operational Capacity: NA U.S. Operational Capacity: NA

Technology Characteristics Power Capacity: kW - GW Discharge Time: milliseconds - minutes Response Time: 10-20 milliseconds Efficiency: 80-98% Lifetime: 4-20 years

Primary Grid Application Power Quality/Voltage Support

30 Supercapacitors

Pros • High efficiency • High cycle fatigue • Scalable/flexible • High power

Cons • Low energy • Requires power conditioning to deliver a steady output power • Expensive per unit of energy capacity

31 Chemical Storage

Primary Grid Application: Intermittent balancing

32 Hydrogen Storage

Global Operational Capacity: ~10s MW U.S. Operational Capacity: NA

Technology Characteristics Power Capacity: kW - GW Discharge Time: hours Response Time: seconds - minutes Efficiency: 24-45% Lifetime: 5-30 years

Primary Grid Application Power Quality Intermittent Balancing

33 Hydrogen Storage

Pros • Scalable from distributed to large scale long term large-scale storage • Low environmental impact

Cons • Low round-trip efficiency • High capital cost • Safety considerations • Low energy density at ambient conditions

34 Storage R&D • Novel materials o Anodes o Cathodes o Electrolytes • Higher efficiency • Higher energy density o Energy per unit mass o Energy per volume • Longer lifetimes o Greater number of cycles o Deeper discharge • Lower costs • Form factor

• Thermalnrel.gov/docs/fy15osti/62361.pdf management 35 Energy Storage: How Much is in Use? Interest in Energy Storage Rises and Falls

Renewed interest Deployment of in energy storage as pumped hydro RE deployment storage expands and fuel accelerates to prices rise meet variation in demand. Gas prices drop. Nuclear buildout smaller than expected. Storage was an Restructured attractive markets, state alternative to other mandates and load-following increased R&D generators for funding expand supporting opportunities for Cheaper and/or easier projected growth storage in nuclear power. to meet variation in load and capacity requirements with conventional generation resources

37 U.S. Energy Storage Operational Capacity

~21 GW Total Capacity

DOE Global Storage Energy Database http://www.energystorageexchange.org/projects/data_visualization (accessed 25 August, 2015) Pumped Storage Hydro is the dominant energy storage technology in the U.S.

38 Global Energy Storage Operational Capacity

~148 GW Total

DOE Global Storage Energy Database http://www.energystorageexchange.org/projects/ data_visualization (accessed 25 August, 2015)

Pumped Storage Hydro is the dominant energy storage technology globally.

39 Energy Storage Projects in the Pipeline: U.S.

~6 GW 159 Projects

40 Energy Storage Projects in the Pipeline: Global

36 GW 325 Projects

41 Challenges and Barriers Facing Energy Storage Challenges for Storage

Storage is not the most economic way to add flexibility to the grid. Plus, policy/regulatory/market landscape constrains ability to capture full value.

43 Energy Storage Economics Example: Estimated Storage Cost for Bulk Energy Storage

Bulk Energy Storage Options to Support System and Large Renewable Integration • Applications:

o Wholesale Markets o Wind Integration o Ancillary Services Estimated cost for bulk energy storage ranges from $980 – 4900/KW

Current markets support bulk storage at costs <$2000/kW for a >6 hr device

44 Approaches to Estimating Storage Value

• Based on Market Price o Revenues correspond to the price in markets where storage operators can bid – e.g. capacity market, frequency regulation market, black-start services, price-arbitrage • Based on Avoided Costs o In the absence of a market, the benefits of electricity storage can be assessed implicitly by evaluating the costs avoided because of investment in storage – e.g. deferral of transmission & distribution investment, reduced transmission congestion charges… • Based on Competing Technology/Willingness to Pay o If electricity storage has an intrinsic value, it can be assessed by comparing alternative technologies – e.g. ensuring power quality for end-users, optimization of the power fleet by storing excess power from renewables instead of shutting down baseload power plants

Cost-Benefit for Grid Applications

Current cost of storage technologies ~$2,000/kW and greater

Source: https://fas.org/sgp/crs/misc/R42455.pdf

• For most applications, the current costs of energy storage outweigh the financial benefits • Arbitrage alone is generally insufficient to support most storage technologies • Regulation and contingency reserves yield the greatest value

46 Market and Regulatory Challenges

• Ability to participate in ancillary services o Storage is not always eligible to participate in ancillary services (markets or bilateral agreements) nor to resource adequacy. This is particularly true for small capacity storage due to a minimum size required • Ownership of storage plant o In several unbundled systems, storage is considered a production asset and system operators (transmission or distribution) are not allowed to own storage devices. This is a strong impediment to transmission and distribution deferral applications that are considered to be among the most promising revenue streams • Monetization of fast-response assets o Frequency regulation usually rewards MW withdrawn or injected to stabilize the grid without taking into account the speed of the response;

Market Rules and Regulatory Frameworks Make it Difficult to Monetize All the Benefits of Storage

47 California Storage Initiative

• 1.325 GW of non-pumped-hydro storage by 2020 o Transmission (700MW) o Distribution (425 MW) o Behind the meter (200 MW) • Objectives o The optimization of the grid, including peak reduction, contribution to reliability needs, or deferment of transmission and distribution upgrade investments; o The integration of renewable energy; and o The reduction of greenhouse gas emissions to 80 percent below 1990 levels by 2050, per California goals.

48 Storage Applications Valued In Today’s Electricity Markets

Valued in Restructured Markets? Yes Partially, or indirectly No

Storage value depends on application AND technology characteristics. Energy markets and regulations don’t value full benefits of storage.

49 How Much RE Before Storage is Required Flexibility Supply Curve

• RE resource forecasting • Expanded transmission • Smarter distribution system • Smarter loads

51 Renewable Futures Study Scenarios - 2050

[email protected] Key References • DOE/EPRI Electricity Storage Handbook (2015) • Electricity Storage – Schlumberger SBC Energy Institute (2013) • Renewable Electricity Futures Study (2012) Why is everyone talking about energy storage? It could be a game changer.

55 Backup Slides 57 58 Early Storage Build-Out

CAES: 1 Plant (110 MW), Alabama

Others (~100 MW total): A few batteries, SMES, mostly for local power quality issues

Conventional Pumped Home systems storage Hydro: ~ 22 GW

59 U.S. Federal Mandates and Incentives

• FERC 755 (October 2011): Pay for Performance for Frequency Regulation – Entities providing this service will be compensated in a two-part structure: • First, regulation service providers will receive a capacity payment. • Second, regulation providers will receive a "performance-based" payment. • FERC 1000 (July 2011): Regional Transmission Planning – The order specifies how public utility transmission providers plan for new transmission projects and allocate those costs. – Reliability transmission upgrades, market efficiency transmission upgrades and public policy transmission upgrades • FERC 784 (July 2013): Third Party Provision of Ancillary Services • FERC Order 792 (November 2013): Small Generator Interconnection Procedures – Added energy storage as a power source that is eligible to connect to the grid, following procedures similar to those for small generator interconnection.

60 Applications of Energy Storage

Application Description Timescale of Operation

Load Leveling/ Purchasing low-cost off-peak energy and selling it Response in minutes to hours. Discharge time of hours. Arbitrage during periods of high prices. Firm Capacity Provide reliable capacity to meet peak system Must be able to discharge continuously for several hours or more. demand. Operating Reserves Fast responding increase or decrease in Unit must be able to respond in seconds to minutes. Discharge time Regulation generation (or load) to respond to random, is typically minutes. Service is theoretically “net zero” energy over unpredictable variations in demand. extended time periods.

Contingency Fast response increase in generation (or Unit must begin responding immediately and be fully responsive Spinning decrease load) to respond to a contingency such within 10 minutes. Must be able to hold output for 30 minutes to 2 Reserve as a generator failure. hours depending on the market. Service is infrequently called.[2]

Replacement/ Units brought on-line to replace spinning units. Typical response time requirement of 30-60 minutes depending on Supplemental market minutes. Discharge time may be several hours.

Ramping/Load Follow longer-term (hourly) changes in electricity Response time in minutes to hours. Discharge time may be Following demand. minutes to hours. T&D Replacement Reduce loading on T&D system during peak Response in minutes to hours. Discharge time of hours. and Deferral times. Black-Start Units brought online to start system after a Response time requirement is several minutes to over an hour. system-wide failure (blackout). Discharge time requirement may be several to many hours.[3] End-Use Applications Functionally the same as arbitrage, just at the Same as arbitrage. TOU Rates customer site. Same as firm capacity. Demand Charge Functionally the same as firm capacity, just at the Reduction customer site. Instantaneous response. Discharge time depends on level of reliability needed by customer. Backup Power/ Functionally the same as contingency reserve, UPS/Power Quality just at the customer site.

Energy Storage in Restructured Markets

Application Valued in Restructured Markets? Load Leveling/ Arbitrage Yes Firm Capacity Via scarcity pricing or combined scarcity plus capacity markets. Suffers from missing money problem. Regulation Reserves Yes, with potentially increased compensation for fast response through FERC 755 initiated market reforms Spinning Reserves Yes Replacement/Supplemental/N Yes but values are very low on-Spinning Primary Frequency Response No. Early stage proposals / Inertia Ramping/Load Following No. Proposed in several markets Transmission Replacement Only partially via congestion prices and Deferral All Distribution Specific No. Will likely remain cost of service through regulated entities Applications Renewable Integration Captured through other services. End-Use Applications Only via rate structure, perhaps combined with aggregated wholesale services (adds transaction costs)

Value of Storage in Restructured Markets

Historical Values of Energy Storage in Restructured Electricity Markets

Market Location Years Annual Value Assumptions Evaluated Evaluated ($/kW)

Energy PJMa 2002-2007 $60-$115 12 hour, 80% efficient device. Range of Arbitrage efficiencies and sizes evaluated[1] NYISOb 2001-2005 $87-$240 10 hour, 83% efficient device. Range of (NYC) efficiencies and sizes evaluated. $29-$84 (rest) USAc 1997-2001 $37-$45 80% efficient device, Covers NE, No Cal, PJM

CAd 2003 $49 10 hour, 90% efficient device. Regulation NYISOb 2001-2005 $163-248

USAe 2003-2006 $236-$429 PJM, NYISO, ERCOT, ISONE

Contingency USAe 2004-2005 $66-$149 PJM, NYISO, ERCOT, ISONE Reserves a Sioshansi et al. 2009 b Walawalkar et al. 2007 c Figueiredo et al. 2006 d Eyer et al. 2004 e Denholm and Letendre 2007

63 Current Capacity

64 Demonstration Projects via ARRA

• From : Energy Storage Activities in the United States Electricity Grid, May 2011

65 ARPA-E Projects

66 ARPA-E Projects

• About $58 million total

67 Current Wind and Solar Integration Studies

• We have extensively studied the impacts of wind and solar in the range of 35% penetration on an energy basis. • Increased variability can be accommodated by existing generator flexibility and other “low-cost” flexibility such as increased balancing area cooperation (balancing wind generation and load over larger areas to “share” the increased variability. • Spatial diversity smooths aggregated wind output reducing short- term fluctuations to hour time scales • Almost all the wind can be used (little curtailment) • All the wind acts to reduce fuel use and emissions from existing plant • Additional reserves have a modest impact on the emissions reduction rate • Storage would be nice, but timing is uncertain

Energy Storage Technologies: Characteristics

69 Energy Storage Technologies: Characteristics

70 U.S. Energy Storage R&D Support

R&D Focus: R&D Focus: • Battery storage for utility load shifting or “High-risk, high-payoff” rampable and wind during operation and ramping control dispatchable intermittent storage projects

• Frequency regulation ancillary services

• Distributed storage for grid support 1 • CAES GRIDS: grid-scale rampable intermittant dispatchable storage • Demonstration of promising storage technologies

71 Role of Storage in Integrating Variable Renewables

Significant perception that storage is needed to integrate renewables

72 Estimated Operational Energy Storage (MW)

Storage Technology United States Worldwide Pumped Storage Hydro 20,356 142,088 Thermal Storage 553 1,722 Molten Salt Thermal Storage 281 1,337 Flywheels 56 920 Compressed Air Storage 114 435 Batteries 242 525 Lithium-ion Batteries 115 287 Sodium based Batteries 22 102 Lead-acid Batteries 76 86 Nickel based Batteries 27 30 Flow Batteries 2 19 Electro-chemical 56 80 Hydrogen Storage 0 3 Grand Total 21,376 145,771