Energy storage optimization

A techno-economic analysis of battery chemistries in hybrid microgrids

October 27, 2015

Rebecca Ciez*, Jay Whitacre*†

*Engineering & Public Policy, †Materials Science & Engineering

Energy storage significant in microgrids• Significant component for both functionality and cost

• How do the inherent characteristics of different storage technologies influence the overall cost of electricity from hybrid systems?

• Which technologies are the most cost-effective, and what economic conditions are necessary for mass adoption?

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Energy Storage

Solar PV Diesel

Generator

Off-Grid Community (lighting, small electronics)1

Maximize utilization

Account for degradatio

n

Variety of factors influence storage performance

• State of Charge (SOC swing)• Temperature • Operational timeframe

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ChemistryCost per

kWhCycle life

Sensitivity to SoC Swing

Details

Lead-Acid $200($150-$250)

Poor(~500)

HighMost commonly used battery in hybrid microgrid systems

High Power Density Li-ion

(A123 Systems, LiFePO4)

$680($530-$1000)

Excellent(~10,000)

Low High cost, high power density

High Energy Density Li-Ion

(Panasonic, LiNiCoAlO2)

$250($200-$300)

Average(~5,000)

MediumLow cost, high energy density

Battery cycles depend on SOC swing

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• Existing data for lead acid [Pesaran & Markel, 2007] and High power density li-ion [Peterson et al 2010]

• Cycle testing for high energy density li-ion

Thanks to W. Wu for SEM images

Operational Model Overview

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Operational Model

Sola

r PV

Load

Diesel Generator

Battery Storage

Actual Cycling Behavior

Storage Requirement

Power Mix

Operational Parameters

Battery technology

Renewable energy requirements

Maximum SOC swing

Operational lifetime (1, 2, 5, 10, 20 years)

Storage capacity required

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Trends in storage capacity

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Short timeframe: •Falling storage requirement as max SOC swing increasesInflection point: •Deep cycling degradation occurs•Add capacity to extend lifetimeVery long timeframe:•Max. SOC swing reached decreases•Load constant, packs much larger•Never approach specified limit SOC swing

Economic Model Overview

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Operational Model

Sola

r PV

Load

Diesel Generator

Battery Storage

Actual Cycling Behavior

Economic Model

Cost A

ssum

ptio

ns

Repla

cem

ent

Assu

mptio

ns

LCOEStorage

Requirement

Power Mix

Economic Parameters

Fixed 20 year timeframe

Number of battery replacements (every 1, 2, 5, 10, 20 years)

Cost Assumptions

Discount Rate

Levelized cost of electricity tracks with storage capacity

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More replacements offer lower costs for higher SOC swings

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Previous graphs show variation in:•Battery chemistry•Maximum SOC swing•Cost assumptions•Number of replacements

Comparing between technologies

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• 5% discount rate• 75% min.

renewable energy

requirement

High energy density li-ion slightly cheaper than lead acid

Fixed: discount rate and renewable energy requirement

What about other model parameters?

Renewable energy requirement: •Most optimal combinations exceed the minimum target •Max change was 4¢/kWh

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Discount rate matters: •Low discount rate: lead acid best•Higher rates, high energy density li-ion •High power li-ion always most expensive

Price changes required increase with discount rate

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• Diesel prices required to induce a switch track with discount rate

• Larger percentage price decreases on batteries for higher discount rates

• High power li-ion still most expensive in absolute terms

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Feed-in tariffs comparable to current rates at low discount rates4

Carbon taxes would need to be much higher•Typically $10-30/ton•Highest: $168/ton (Sweden)5

Policy interventions track with discount rate

Conclusions• Optimal number of battery replacements dependent on how

deeply batteries are cycled

• At assumed prices, diesel is still less expensive than hybrid systems

• High performance of high-power li-ion doesn’t offset high capital cost

• Discount rate is a significant factor in determining the lowest-cost storage option

• Low discount rates: Lead-acid best• High discount rates: high energy density li-ion best

• Diesel price changes and policy interventions required to induce a switch to hybrid system track with discount rate

• Larger battery price changes required as discount rate increases

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Acknowledgements

This material is based upon work supported by the National Science Foundation Graduate Research Fellowship under Grant No. DGE 1252522 . Any opinion, findings, and conclusions or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the views of the National Science Foundation.

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This research was supported by:•National Science Foundation GRFP •Carnegie Mellon University•Bushnell Fellowship in Engineering•Aquion Energy

Thanks to Inês Azevedo for her thoughtful comments and discussions, and to Wei Wu for his assistance with battery cycle testing & SEM imaging.

Questions?

Rebecca Ciezrciez@andrew.cmu.edu

References

[1] E.M. Nfah, J.M. Ngundam, M. Vandenbergh, J. Schmid, Simulation of off-grid generation options for remote villages in Cameroon, Renewable Energy. 33 (2008) 1064–1072. doi:10.1016/j.renene.2007.05.045.[2] Pesaran, A. & Markel, T., Battery Requirements and Cost-Benefit Analysis for Plug-In Hybrid Vehicles (Presentation), (2007) 1–22. [3] S.B. Peterson, J. Apt, J.F. Whitacre, Lithium-ion battery cell degradation resulting from realistic vehicle and vehicle-to-grid utilization, Journal of Power Sources. 195 (2010) 2385–2392. doi:10.1016/j.jpowsour.2009.10.010.[4] Feed-in Tariffs and similar programs, US Energy Information Administration. (2013) http://www.eia.gov/electricity/policies/provider_programs.cfm [accessed 27-3-2015].[5] The World Bank, Putting a Price on Carbon with a Tax, 1–4, http://www.worldbank.org/content/dam/Worldbank/document/Climate/background-note_carbon-tax.pdf [accessed 10-12-2014].

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Storage Requirements Converge for different renewable energy requirements in the long-term

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Frequency of Pack SOC swing as operating time increases

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Model Specification

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Discount rate has limited impact on diesel generation costs

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• Capital costs play a small role in LCOE of diesel-only generation

• Discount both electricity produced & variable costs (fuel)

Value future electricity production less

Model Overview

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Operational Model

Sola

r PV

Load

Diesel Generator

Battery Storage

Cycling Behavior

Storage Requirement

Power Mix

Economic Model

Cost A

ssum

ptio

ns

Repla

cem

ent

Assu

mptio

ns

LCOE

Operational Parameters

Battery technology

Renewable energy requirements

Maximum SOC swing

Operational lifetime (1, 5, 10, 20 years)

Economic Parameters

Fixed 20 year timeframe

Number of battery replacements (every

1, 2, 5, 10 years)

Cost Assumptions

Discount Rate