Energy Storage Industrial

Acceptance Area: Lessons,

Methods, and Models Resulting from

Recent Experience

Patrick Balducci

Chief Economist

Other team members: V. Viswanathan, J. Alam, A. Somani, D. Wu, K. Mongird, Y. Yuan, V. Fotedar,

R. Fan, and A. Crawford

DOE OE Energy Storage Peer Review

Santa Fe, New Mexico

September 25, 2018

Energy Storage Projects Being Evaluated by

Pacific Northwest National Laboratory

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Industrial Acceptance Thrust Areas

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Economics Control Systems

Cost and Performance Characterization Distribution System Integration

Taxonomy of Energy Storage Services

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Energy Storage Holds Tremendous Value

Source: Balducci, P., J. Alam, T. Hardy, and D. Wu. 2018. Assigning Value to Energy Storage Systems at Multiple Points in an

Electrical Grid. Energy Environ. Sci., 2018, Advance Article. DOI: 10.1039/C8EE00569A. Available online at

http://pubs.rsc.org/en/content/articlelanding/2018/ee/c8ee00569a#!divAbstract. 5

Results from Recent PNNL Valuation Studies:

Present Value Benefits and Costs over

Economic Life of Energy Storage Systems

*Reliability benefits are based on assessments of the value of lost load to customers, thus expanding the benefits to include those

accruing to both the utility and the customers it serves.

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Orcas Power & Light Co-Op – CEF II

Energy Storage & Community Solar

Total 20-year value of photovoltaics (PV) and energy storage system (ESS) operations at $3.3

million in present value terms, while present value costs are $2.9 million for a benefit-cost ratio

(BCR) of 1.13, including outage mitigation raises BCR to 1.25

Benefits largely driven by transmission deferral benefit at $2.0 million in present value terms

Cable replacement deferral estimated to be 3.65 years

$-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

Benefits Costs

Load Shaping Charge Reduction Demand Charge Reduction Transmission Charge Reduction

Volt-VAR/CVR Transmission Deferral Energy Losses

Energy Storage System Rate Impacts Lost Revenue Gen Set Cost Avoidance

Outage Mitigation PV Energy Production

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Submarine Transmission

Cables

Mainland Washington

Cable 5 and Energy Storage System (ESS) site at Decatur Substation in the OPALCO Single Line Diagram (upper); Cable 5

Cross Section (lower)

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Shell Energy North America (SENA) Small,

Modular Pumped Storage Hydro – Market

Assessment

SENA hydro battery costs are

roughly comparable to those in

the marketplace for electro-

chemical batteries at $743/kWh

Several hydro battery

characteristics outlined by SENA

are tremendously valuable

the ability to act as load and

generation

the ability to follow a regulation

signal

the ability to provide 14 MW of

regulation up/down capacity

the spinning reserve mode

enables grid synching to improve

project economics

Benefits exceed costs under the base case in the Pacific NW, Hawaii, and two NYISO

regions. Under the mature cost method, positive BCRs are obtained in all regions with

the exception of one CAISO sub-region

Economic viability of the SENA hydro battery is highly dependent on locational factors

Regulation, capacity, and frequency response are the most valuable use cases.

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Battery Storage Cost and Technical

Performance Characterization

Parameter NaS Battery Li-ion Battery Lead acidSodium Metal

HalideZinc-hybrid

cathodeRedox Flow

Battery

Capital Cost – Energy Capacity ($/kWh)

661 (465) 271 (189) 260 (220) 700 (482) 265 (192) 555 (393)

Power Conversion System ($/kW) 350 (257) 350 (257) 350 (257) 350 (257) 350 (257) 350 (257)

Balance of Plant ($/kW) 100 (95) 100 (95) 100 (95) 100 (95) 100 (95) 100 (95)

Construction and Commission Cost ($/kWh)

165 (157) 165 (157) 165 (157) 165 (157) 165 (157) 165 (157)

O&M Fixed ($/kW-year) 10 (8) 10 (8) 10 (8) 10 (8) 10 (8) 10 (8)

O&M Variable (cents/kWh) 0.03 0.03 0.03 0.03 0.03 0.03

Initial Round Trip Efficiency (RTE) 0.75 0.86 0.72 0.83 0.72 0.675 (0.7)

Annual RTE Degradation Factor 0.34% 0.50% 5.40% 0.35% 1.50% 0.40%

Response Time 1 sec 1 sec 1 sec 1 sec 1 sec 1 sec

Cycles at 80% Depth of Discharge 4,000 3,500 900 3,500 3,500 10,000

Life (Years) 13.5 10 2.6 (3) 12.5 10 15

Manufacturing Readiness Level 9 (10) 9 (10) 9 (10) 7 (9) 6 (8) 8 (9)

Technology Readiness Level 8 (9) 8 (9) 8 (9) 6 (8) 5 (7) 7 (8)

Primary estimates represent 2018 values; numbers in brackets represent 2025 forecast values.

Siting/Sizing Energy Storage

Broad Set of Use Cases

Regional Variation

Utility Structure

Battery Characteristics

What We Have Learned – Need a Detailed

Methodology for Assessing an Energy

Storage System’s Value Proposition

Ability to aid in the siting of energy storage systems by

capturing/measuring location-specific benefits

Measure benefits associated with bulk energy, transmission-

level, ancillary service, distribution-level, and customer

benefits at sub-hourly level

Differentiate benefits by region and market structures/rules

Define benefits for different types of utilities (e.g., public

utility districts, co-ops, large utilities operating in organized

markets, and vertically integrated investor-owned utilities

operating in regulated markets)

Accurately characterize battery performance, including round

trip efficiency rates across varying states of charge and

battery degradation caused by cycling.

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Acknowledgments

Dr. Imre Gyuk - Energy Storage Program Manager, Office of Electricity

Delivery and Energy Reliability, U.S. Department of Energy

Bob Kirchmeier - Senior Energy Policy Specialist, Clean Energy Fund

Grid Modernization Program, Washington State Energy Office

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