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The Economic and Reliability Benefits of CSP with Thermal Energy Storage: Literature Review and Research Needs

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The Economic and Reliability Benefits of CSP with Thermal Energy Storage: Literature Review and Research Needs CSP ALLIANCE REPORT The Economic and Reliability Benefits of CSP with Thermal Energy Storage: Literature Review and Research Needs TECHNICAL REPORT SEPTEMBER 2014 csp-alliance.org BENEFITS OF CSP WITH THERMAL STORAGE The CSP Alliance The CSP Alliance is a public policy advocacy organization dedicated to bringing increased awareness and visibility to this sustainable, dispatchable technology. Our membership includes many of the world’s largest CSP corporations and their supply-chain partners. Our objectives include advancing the industry’s value proposition, addressing issues of job creation and environmental sustainability, and setting the foundation for future uses of the technology. The first version of this report was released in December 2012. This next version includes expanded discussion of methodology and new study results available over the course of 2013-14. Acknowledgments This project was initiated for the CSP Alliance by Joseph Desmond, BrightSource Energy, Fred Morse, Abengoa Solar, and Tex Wilkins, CSP Alliance. The report was prepared by Udi Helman and David Jacobowitz. Many other people contributed data and provided comments. In particular, we would like to thank the following for their comments and support on the original and revised report: Brendan Acord, Paul Denholm, Paul Didsayabutra, Jon Forrester, Warren Katzenstein, Or Kroyzer, Tandy McMannes, Mark Mehos, Andrew Mills, Hank Price, Tom Riley, Ramteen Sioshansi, Chifong Thomas and Mitch Zafer. Brendan Acord, Yehuda Halevy, Vered Karty, Saheed Okuboyejo, Elizabeth Santos, David Schlosberg, Daniel Schwab, Zhanna Sigwart, Mitch Zafer, and Omer Zehavi provided support for Tables 5-1 to 5-3. Tom Mancini provided a full review of the document. However, reviewers of the report are not responsible for any subsequent errors or interpretations of results. i BENEFITS OF CSP WITH THERMAL STORAGE Contents The CSP Alliance and Acknowledgments ........................................................................i Acronyms ............................................................................................................................v 1. Introduction ................................................................................................................ 1 1.1 The Design of Clean Power Systems ........................................................................... 2 1.2 Economic and Reliability Benefits of CSP with Thermal Storage ...................................... 2 1.3 Report Objectives and Overview ................................................................................. 4 2. Design and Operational Attributes of CSP with Thermal Energy Storage ......... 6 2.1 Background on CSP Plant Design and Operations ....................................................... 6 Thermal Energy Storage Systems ................................................................................ 8 2.2 Key Components of CSP Plant Design and Production Modeling.................................... 9 Solar resource modeling ........................................................................................... 9 Solar Multiple ......................................................................................................... 10 Thermal Storage Capacity ....................................................................................... 10 Operational Attributes of Different Configurations...................................................... 11 3. Utility or Market Services Offered by CSP with Thermal Energy Storage – and Comparison with PV ........................................................................................ 13 3.1 Capacity ................................................................................................................ 14 3.2 Energy and Ramping ............................................................................................... 15 3.3 Ancillary Services – Operating Reserves ..................................................................... 16 Regulation ............................................................................................................. 16 Contingency Reserves ............................................................................................. 16 Supplemental Reserves ............................................................................................ 17 3.4 Other Ancillary Services and Operational Requirements .............................................. 17 Frequency Response ................................................................................................ 17 Inertia Response ..................................................................................................... 18 Reactive Power and Voltage Support ......................................................................... 18 3.5 Visibility and Control ............................................................................................... 19 4. Valuation of Renewable Resources – Definition of Net System Cost and Quantitative Methods .................................. 21 4.1 Utility Valuation and Net System Cost ....................................................................... 22 4.2 Quantitative Methods for Economic Valuation............................................................ 23 Power system sub-hourly operational models ............................................................. 23 Power system dispatch models ................................................................................. 23 Plant-level simulation with exogenous prices .............................................................. 24 ii BENEFITS OF CSP WITH THERMAL STORAGE Other pricing models .............................................................................................. 24 Statistical and operational models for measuring capacity credits ................................ 24 Portfolio planning/capacity expansion models ........................................................... 25 4.3 Applications in long-term planning and procurement methods..................................... 25 4.4 Scenario Development and Baseline Measurements ................................................... 26 4.5 Low versus High Penetration Scenarios ...................................................................... 29 5. Valuation of Renewable Resources – Implication of Regulatory and Market Regimes .................................................. 31 5.1 Institutional structures for the power sector ................................................................. 31 5.2 Valuation in U.S. Markets ......................................................................................... 32 5.3 Valuation outside the U. S. ....................................................................................... 34 6. Looking to the Future: Simulating Power Systems under High Renewable Scenarios ........................... 47 6.1 High Penetration Renewable Resource Scenarios ........................................................ 47 6.2 Resource Adequacy ................................................................................................. 49 6.3 System Operations .................................................................................................. 50 6.4 Summary ................................................................................................................ 52 7. Energy and Ancillary Services ................................................................................ 53 7.1 Energy ................................................................................................................... 53 Low Renewable Energy Cases or Scenarios ............................................................... 54 High Renewable Energy Scenarios ............................................................................ 56 Start-up Costs ........................................................................................................ 59 Subhourly Energy Dispatch and Ramping Reserves ..................................................... 59 7.2 Ancillary Services .................................................................................................... 59 Ancillary service benefits modeled in recent studies .................................................... 61 Other Ancillary Services .......................................................................................... 63 7.3 Summary and Additional Research Needs .................................................................. 64 8. Resource Adequacy and Long-term Reliability .................................................... 65 8.1 Methodology for Capacity Valuation ......................................................................... 65 8.2 Capacity Value in Low Solar Penetration Scenarios ..................................................... 66 8.3 Capacity Value at Higher Solar Penetrations .............................................................. 67 8.4 Capacity Resources with Flexible Operational Attributes .............................................. 70 8.5 Summary and Additional Research Needs .................................................................. 71 9. Integration and Curtailment Costs ........................................................................ 72 9.1 Renewable integration requirements .......................................................................... 72 iii BENEFITS OF CSP WITH THERMAL STORAGE 9.2 Avoided integration
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