Electric energy storage technologies have recently been in the spotlight, discussed as essential grid assets that can provide services to increase the reliability and resiliency of the grid, including furthering the integration of variable renewable energy resources. Though they can provide numerous grid services, there are a number of factors that restrict their current deployment. The most significant barrier to deployment is high capital costs, though several recent deployments indicate that capital costs are decreasing and energy storage may be the preferred economic alternative in certain situations. However, a number of other market and regulatory barriers persist, limiting further deployment. These barriers can be categorized into regulatory barriers, market (economic) barriers, utility and developer business model barriers, crosscutting barriers and technology barriers. This report, through interviews with stakeholders and review of regulatory filings in four regions roughly representative of the United States, identifies the key barriers restricting further energy storage development in the country. The report also includes a discussion of possible solutions to address these barriers and a review of initiatives around the country at the federal, regional and state levels that are addressing some of these issues. Energy storage could have a key role to play in the future grid, but market and regulatory issues have to be addressed to allow storage resources open market access and compensation for the services they are capable of providing. Progress has been made in this effort, but much remains to be done and will require continued engagement from regulators, policy makers, market operators, utilities, developers and manufacturers.
This study examines how grid-level electricity storage may benefit the operations of NV Energy, and assesses whether those benefits are likely to justify the cost of the storage system. To determine the impact of grid-level storage, an hourly production cost model of the Nevada Balancing Authority ("BA") as projected for 2020 was created. Storage was found to add value primarily through the provision of regulating reserve. Certain storage resources were found likely to be cost-effective even without considering their capacity value, as long as their effectiveness in providing regulating reserve was taken into account. Giving fast resources credit for their ability to provide regulating reserve is reasonable, given the adoption of FERC Order 755 ("Pay-for-performance"). Using a traditional five-minute test to determine how much a resource can contribute to regulating reserve does not adequately value fast-ramping resources, as the regulating reserve these resources can provide is constrained by their installed capacity. While an approximation was made to consider the additional value provided by a fast-ramping resource, a more precise valuation requires an alternate regulating reserve methodology. Developing and modeling a new regulating reserve methodology for NV Energy was beyond the scope of this study, as was assessing the incremental value of distributed storage.
This study evaluates the business case for additional bulk electric energy storage in the Southern Company service territory for the year 2020. The model was used to examine how system operations are likely to change as additional storage is added. The storage resources were allowed to provide energy time shift, regulation reserve, and spinning reserve services. Several storage facilities, including pumped hydroelectric systems, flywheels, and bulk-scale batteries, were considered. These scenarios were tested against a range of sensitivities: three different natural gas price assumptions, a 15% decrease in coal-fired generation capacity, and a high renewable penetration (10% of total generation from wind energy). Only in the elevated natural gas price sensitivities did some of the additional bulk-scale storage projects appear justifiable on the basis of projected production cost savings. Enabling existing peak shaving hydroelectric plants to provide regulation and spinning reserve, however, is likely to provide savings that justify the project cost even at anticipated natural gas price levels. Transmission and distribution applications of storage were not examined in this study. Allowing new storage facilities to serve both bulk grid and transmission/distribution-level needs may provide for increased benefit streams, and thus make a stronger business case for additional storage.
This report investigates strategies to mitigate anticipated wind energy curtailment on Maui, with a focus on grid-level energy storage technology. The study team developed an hourly production cost model of the Maui Electric Company (MECO) system, with an expected 72 MW of wind generation and 15 MW of distributed photovoltaic (PV) generation in 2015, and used this model to investigate strategies that mitigate wind energy curtailment. It was found that storage projects can reduce both wind curtailment and the annual cost of producing power, and can do so in a cost-effective manner. Most of the savings achieved in these scenarios are not from replacing constant-cost diesel-fired generation with wind generation. Instead, the savings are achieved by the more efficient operation of the conventional units of the system. Using additional storage for spinning reserve enables the system to decrease the amount of spinning reserve provided by single-cycle units. This decreases the amount of generation from these units, which are often operated at their least efficient point (at minimum load). At the same time, the amount of spinning reserve from the efficient combined-cycle units also decreases, allowing these units to operate at higher, more efficient levels.