U.S. Department of Energy Electricity Advisory Committee Meeting March 10, 2011
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U.S. Department of Energy Electricity Advisory Committee Meeting March 10, 2011 Meeting Minutes EAC Members in Attendance: Richard Cowart Edward Krapels Regulatory Assistance Project Anbaric Holdings CHAIR David Mohre (Representing EAC Member Barry Honorable Lauren Azar Lawson) Wisconsin Public Utilities Commission National Rural Electric Cooperative Association VICE CHAIR Ralph Masiello Guido Bartels KEMA IBM David Nevius Rick Bowen North American Electric Reliability Corporation Alcoa Irwin Popowsky Frederick Butler Pennsylvania Consumer Advocate Butler Advisory Services Wanda Reder Honorable Robert Curry S&C Electric Company New York State Public Service Commission Brad Roberts Jose Delgado Electricity Storage Association American Transmission Company (Ret.) Honorable Tom Sloan Robert Gramlich Kansas House of Representatives American Wind Energy Association Richard Vague Dian Grueneich Energy Plus Holdings, LLC Morrison and Forester LLP Gordon van Welie Michael Heyeck Independent System Operator of New England American Electric Power Mike Weedall Joseph Kelliher Bonneville Energy Administration NextEra Energy, Inc. Brian Wynne Electric Drive Transportation Association EAC Members Not in Attendance U.S. Department of Energy Attendees Ralph Cavanagh Natural Resources Defense Council Honorable Steven Koonin Under Secretary of Science Lisa Crutchfield National Grid USA Honorable Patricia Hoffman Assistant Secretary for Electricity Delivery and Roger Duncan Energy Reliability Austin Energy (Ret.) David Meyer Barry Lawson Office of Electricity Delivery and Energy National Rural Electric Cooperative Association Reliability Barry Smitherman Joe Paladino Public Utility Commission of Texas Office of Electricity Delivery and Energy Reliability Public Attendees John Schnagl Michele Tihami Office of Electricity Delivery and Energy IBM Reliability John Howes Larry Mansueti Redland Energy Group Office of Electricity Delivery and Energy Reliability Eric Addsworth Edison Electric Institute Kerry Cheung DOE, AAAS Fellow Larry Camm Schweitzer Bergier Caitin Callaghan DOE, AAAS Fellow Charlotte Schidemore (No affiliation listed) Energetics, Inc. Attendees Matt Hourihem Information Technology and Innovation Peggy Welsh Foundation Director, Electricity Program Cami Dodge Press Attendees Energy Policy Analyst Jason Fordney Natalie Kempkey Platts Energy Policy Analyst Katie Shay Analyst Welcome and Opening Remarks The Honorable Patricia Hoffman, Assistant Secretary for Electricity Delivery and Energy Reliability, U.S. Department of Energy (DOE), opened the meeting by thanking everyone for attending and extending her appreciation for everyone’s willingness to participate. Assistant Secretary Hoffman’s comments were echoed by Richard Cowart, Chairman of the DOE Electricity Advisory Committee (EAC). After EAC members introduced themselves, Mr. Cowart outlined the agenda for the meeting, which was to develop the EAC’s work plans for the next eight months. Mr. Cowart explained that future meetings would focus on deliverables produced by the EAC Subcommittees and to hear presentations from DOE and the DOE National Laboratories. Energy Storage Technologies Subcommittee Ralph Masiello, Chairman of the EAC Energy Storage Technologies Subcommittee, presented the Draft Energy Storage Policy Questions document developed by the Subcommittee for the EAC’s consideration and approval. The draft document contains policy questions which address issues on assistance in shouldering the costs and risks associated with energy storage research and/or demonstration projects; the need for a DOE policy or program that is directed specifically to utility distribution; policy guidance needed from DOE on the classification and treatment of energy storage resources; and better definitions of the products that energy storage technologies provide. Following Mr. Masiello’s presentation, the floor was opened for EAC members to express their views on the draft document. The discussion is summarized by topic below. Need for Major Study on Energy Storage Technologies Gordon van Welie said that energy storage is a valuable technology and that the application of it is evolving. He emphasized the need to be clear about the various definitions of energy storage and questioned what is needed from energy storage to keep the electric grid reliable. He stated that the Independent System Operator of New England (ISO-NE) report concluded that the opportunity for energy storage is minimal and that price differentials are suppressed for large scale wind integration. He questioned how to make the economic case for large scale energy storage. Mr. van Welie offered to circulate the study ISO-NE completed with General Electric and others regarding large-scale wind that addressed the issue of deployment of large scale storage. He restated his concern about the economic case for energy storage, noting that wind energy struggles to compete with low-cost natural gas. Brad Roberts asked Mr. van Welie about the percentage of offshore wind that was studied for the NE- ISO report, commenting that offshore wind is expensive and drives up the price for energy storage. Mr. van Welie responded that the ISO-NE report examined both onshore and offshore wind. Assistant Secretary Hoffman inquired if there were similar studies by other RTOs similar to the ISO-NE study. David Nevius wondered if it would be useful for the EAC to review the need for gas storage for electric reliability. In response, Mr. Cowart asked if this point should be an issue for the EAC to examine in a way that delivers recommendations to DOE. 1 Mr. Roberts emphasized the need for a major study on energy storage. He suggested that Renewable Portfolio Standards (RSP) cannot be achieved without energy storage. He also stated that energy storage is not trying to compete with other forms of energy on the system and that it would be a huge success if 10% of capacity could be achieved by 2020. Wanda Reder suggested that it does not matter where energy storage is located and that classifying benefit streams in studies would be helpful. Dian Grueneich suggested that in order to spend money wisely, there is a need to understand existing energy storage projects. She argued that there is a need to combine all the information being collected under the American Recovery and Reinvestment Act (ARRA) and other information on energy storage project that exists outside of ARRA. She further suggested that such an effort will achieve an understanding of who is collecting the information, how it is being collected, and if it could answer any of the questions in the Energy Storage Technologies Subcommittee’s policy document. Mr. Masiello suggested a report with recommendations on energy storage be disseminated to regulators. He suggested that it would be good for DOE labs to work with for-profit entities. Need for DOE Research and Development of Energy Storage Technologies Mike Heyeck believed that the energy storage technology focus for DOE should be on technology development, getting the prices down and he argued that it is too early to classify energy storage. He further expressed the need to reduce impediments at the wholesale market as that will reduce the cost of energy storage. Mr. Heyeck agreed that there is a need to demonstrate new energy storage technologies. Ed Krapels indicated that as a developer, in his opinion, the on/off peak spread is non-existent. But, he acknowledged that the peak shaving service that storage provides is important, particularly in urban applications. He also noted that storage is very important to demand response. Jose Delgado expressed worry that storage is not economic and that the industry will lose interest in the technology if results from the ARRA-funded storage projects do not produce results quickly. He encouraged the DOE to publicize the economics, costs, and benefits of the ARRA projects as soon as possible. Mr. Cowart suggested DOE help regulators understand the options they have with regard to energy storage. Current models do not show how to deal with storage. DOE labs could look into improving modeling with storage and share their conclusions. Role of the States in Energy Storage Technologies Commissioner Robert Curry offered to coordinate with his staff on starting a dialogue in New York to address energy storage technology questions. He suggested that state government may have more flexibility to address such issues. 2 Representative Tom Sloan argued that there is no need for further storage demonstration projects, but questioned how energy storage would be handled in a regulatory environment. He encouraged the EAC to provide a definition of the role of energy storage. Commissioner Lauren Azar agreed that states need to focus on energy storage technologies, but regulators do not know how to classify storage. She said that electricity stakeholders are still attempting to understand what energy storage can provide and there is a lack of existing models that have the ability to model energy storage. Commissioner Azar suggested it would be good to bring energy storage to the attention of modelers. Suggestions on What the EAC Energy Storage Technologies Subcommittee Should Address Fred Butler commented that wind energy on the electric grid depresses the price during the day, which is a problem for energy storage. He questioned if the EAC should examine current grid demand curves rather than looking ten years ahead. Mr. Butler suggested that the EAC could possibly address how the grid will operate in twenty years