Adding g Storag age: e: Tec echnol ology ogy, E Econom omic - - PowerPoint PPT Presentation

Adding g Storag age: e: Tec echnol

• logy
• gy, E

Econom

• mic a

and Regulator

• ry

y Issues es i in Hy Hybridization

June 11, 2020

www.energystorage.org

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Today’s Speakers

Rhonda Peters Principal InterTran Energy Consulting Rob Gramlich Founder & President Grid Strategies LLC Jason Burwen VP, Policy U.S. Energy Storage Association

Adding St Storage t to Existing a and Operating Renewable P Projects

ESA SA W Webinar J June 11, 11, 2020 2020

Rob Gramlich

www.gridstrategiesllc.com

Hyb ybrid PPA P Prices F Falling

(PV PV-batt ttery)

8

Source: Gorman et al, LBNL (2020), https://eta.lbl.gov/publications/motivations-options-deploying-hybrid

• Prices in the continental US

dropped from $40-70/MWh in 2017 to $20-30/MWh in 2018 and 2019.

• Primarily due to falling

technology costs and tax credit qualification

• Battery/generation ratio and

battery duration rising

Rapid H Hybri rid D Deployment Growth

9

Sources: EIA (2020) https://www.eia.gov/todayinenergy/detail.php?id=43775 Gorman et al, LBNL (2020), https://eta.lbl.gov/publications/motivations-options-deploying-hybrid

• 4.6 GW of hybrid capacity currently installed.
• 14.7 GW of hybrid capacity in the immediate development pipeline.
• >40 GW of hybrids entered queues in 2019
• 69 GW of hybrid capacity currently in ISO/RTO interconnection queues

Hybri rids Concentr trated i in C CA

10

Source: Gorman et al, LBNL (2020), https://eta.lbl.gov/publications/motivations-options-deploying-hybrid

• Hybrids ~49% (35,675 MW) of CA queue as of September 2019
• CA has reached solar penetration level where time-shifting is valuable
• Other regions will reach that point in the future

Som

• me La

Lasti ting B Ben enefi fits ts o

• f Hybrid

id v vs Stand-Alon

• ne…

e…

ev even n thoug ugh p h power m market ets a s aggregate a all s sources es

• Investment T

Tax C Cred edit qualification f for r the e battery--

• -temporary
• If accept some operational flexibility limitations
• Shared

ed t transmission i inter erconnection s ser ervice--

• -lasting
• Shared i

inverter--

• -lasting
• For new projects. Not the case for adding battery to operating generation.
• Shared

ed l land, c constru ruction l labor--

• -lasting
• Shared

ed P PPA n neg egotiation a and c contracting—lasting

• Self-op
• pti

timizing d dispatch ch--lasting => The n e natural s state i e is mostly h hyb ybri rid r ren enewables, e even en w without a a tax cred edit advantage

11

Cost Savings Co-location vs Integration vs Stand-Alone

12

Fu, Remo, Margolis, R., NREL, 2018, https://www.nrel.gov/docs/fy19osti/71714.pdf

Combined ed c cheap eaper er t than an s separ arate

• Possible capacity value benefit—complex Effective Load Carrying Capability analysis

Inte tegrate ted D DC-Co Coup upled ed Hybr brids S Save e $ on I n Inver erter er S Size e (N (Not t possible b by a y adding s storage t to e existi ting g generati tion)

13

NC State Energy Storage Team (2019) https://energy.ncsu.edu/storage/wp- content/uploads/sites/2/2019/02/NC-Storage-Study-FINAL.pdf

Addin ing St Stor

• rage to
• Existin

ing G Gen eneratio ion Ca Can Be Be a Faster r Path t to Market

• Queu

Queues ar are s e slow (3 years) a and cl clogged (60 600 G GW) so so new hybrids w will take a a long ti time t to g get th t through

• So w

why not a add storage t to the 20 200 G GW

• f so

solar a and 15 150 GW o

• f

wind already i in queue?

14

15

https://gridprogress.files.wordpress.com/2019/09/e nabling-versatility-allowing-hybrid-resources-to- deliver-their-full-value-to-customers.pdf

Hybrids, especially PV-battery, are in high demand and are a natural fit for wholesale power markets 39 proposed reforms for RTOs & FERC

• Interconnection
• Capacity credit
• Market participation

Policies a are La Lagging

• Rece

cent F FER ERC r reforms do not mention h hybrids

• FERC Storage Order No. 841
• Generator interconnection Order No. 845 (began in 2015)
• Allows additions to existing generation but not queued generation
• Market r

rules r represent h hybrids a as d devi viations from e existing re resourc rce t types

16

Policy P Principles

1.

• 1. Indiv

ivid idual m l mark rket p part rticip icipants s should ld b be a able le t to m

• make t

their o ir own economic c choices a s about h how a and wh when t to o

• perate, a

as long a as gr grid id op

• perators can u

ultim timately s ly step in t to p

• prevent v

viola

• lation of
• f

relia liabilit ility c y constrain ints or

• r the e

exercis ise of

• f m

mark rket p power. . 2.

• 2. Mark

rket p part rticip icipants s should ld b be a allowed to freely ly add capabilit ilitie ies to p propose sed a and e existing p projects as l long a as the c chan anged ele lectri rical p l propertie ties do n

• not h
• t harm

rm t transmis ission s system relia liability ility. 3.

• 3. Gr

Grid o

• perators s

s should appropriately v value r reso sources’ s’ contr trib ibutio tions i in s such ch a a way t y that avoid ids s systematic ically ly u under- valuing (or

• r ov
• ver-valu

luin ing) c certain in c config iguratio ions r rela lativ tive to oth

• thers.

17

Keep i in touch! h!

rgramlich@gridstrategiesllc.com Twitter er: @ @RobG bGramlichDC, #energytwitter er

18

Grid Interconnection of Hybrid Projects

Rhonda Peters, Ph.D. InterTran Energy Consulting

June 11, 2020 Energy Storage Association

Hybrid Projects

• Interconnection Studies

– Order 841 and Hybrid Projects – Hybrid Study Assumptions

• Adding Storage to Existing Wind or Solar

– Material Impact study Check – Order 845 Surplus Interconnection Shortcomings

• Storage as a Generator Interconnection Upgrade
• Recommendations

Order 841 on Energy Storage

• Tariffs Must Now Allow Energy Storage to Participate in the Market

(Buying and Selling)

• Implementation/Compliance Over the Next Few Years
• Opened the door for Hybrid Projects!

Since the majority of hybrid projects involve Energy Storage, having established Tariff policies for storage, including study and operational models, is a critical first step!

Hybrid Interconnection Studies

• Connection of Dual Generation Technologies
• Each fuel source/generator is directly connected to the grid
• Wind/Solar can charge a battery, that is connected to the grid
• Dispatch Assumptions

– Dispatch determines Power Flow – Power Flow determines Constraints – RTO/ISO’s utilize different dispatch methodologies – ISO/RTO’s study “worst case power flows” to assign Network Upgrades and can include scenarios that may not be

• perationally possible, likely, or desired by the Interconnection

Customer

Hybrid Dispatch in MISO

From MISO Business Practice Manual 15 Appendix E

Adding Storage to Existing Wind/Solar

Order 845 Surplus Interconnection

• Surplus rights depend on host generator being in operation

(rights expire 1 year after host retirement)

• Material modification impact study required
• Host project must have executed generator interconnection

agreement (does not need to be constructed)

• Allowed in Tariffs under Order 845, but generally requires

Business Practice Manual updates to be utilized in practice

Adding Storage to Generation in the Queue

– Material modification impact study required – Changes in fuel source prohibited due to archaic Federal policy

Order 845 Surplus Interconnection Shortcomings

Surplus NOT Allowed While Project is in the Queue – Purely a matter of policy, not engineering! – Individual ISO/RTOs could file to allow as “superior” to 845 standard (845 requires a completed LGIA)

Material Modification Impact Study:

• Must ensure no harm to other generators
• Must electrically perform equivalent or better to original
• Must not inject more power than original

interconnection allows, including dispatch-up in study scenarios

Fuel-Based Dispatch: Wind Solar Battery Coal “On-peak” Study 20% 100% +/-100% 100% “Shoulder” Study 100% 50% +/-100% 100% Scenario:

• 100 MW Wind Farm was studied at only 20 MW in “on peak’ model
• Seeks to add battery storage without increasing the 100MW
• Can it add a 50 MW battery? 20 MW battery? 5 MW battery?

What if it proposed to limit full project output to 20MW during “on peak” hours (8 hours/year) and to 100MW all other times? What if it was a 100MW Solar project? Shoulder hours (70% of peak load) are more frequent and less predictable

Order 845 Surplus Interconnection Shortcomings

Storage as a Generator Interconnection Upgrade

• Generation projects wish to add storage to mitigate

transmission constraints, but its not allowed!

• Tariff policy changes are required to permit addition of

energy storage by a generation owner to mitigate constraints caused by generation impacts to the grid

• MISO’s precedent setting SATOA proposal prohibits energy

storage from mitigating generator impacts to the grid

• SATOAs must have operating guides which are not permitted for use

in addressing generator-caused constraints

• Market –Based Storage (as a NTA) cannot be added during the

queue process to mitigate constraints because it would have needed to have gone through the queue first

Recommendations

• Update Federal policy so a change in fuel source is no longer

arbitrarily/automatically deemed a Material Modification

• Adopt Federal policy on thresholds for fuel based dispatch

differences that do not trigger Material Modification

• Adopt Federal policy that allows energy storage as an NTA

“Non Transmission Alternative” to address transmission upgrades identified in generator interconnection studies as an addition to the generation under study, when it does not increase net project output

Contact Info

Rhonda Peters, Ph.D. InterTran Energy Consulting

intertranec@gmail.com

720-319-1860

Policy I y Issues es for Hy Hybrid R Resource e Mar arket P Partic icipation

Jason Burwen Energy Storage Association June 11, 2020

www.energystorage.orge

Key C Con

• nsid

ideratio tions f for M Market t Participation

Interconnection (already discussed) – how will hybrids be studied for transmission system impacts? Can hybridization occur mid- process? Market Participation Model – what asset type will hybrids use? What are the features/constraints? Capacity Accreditation – how do we account for the contribution

• f hybrids to resource adequacy? What deliverability issues?

Market Participation Issues

Renewables with dispatchability vs. storage with “fuel”

• Renewables have considerations associated with variable “fuel” supply (e.g., imbalance

charges)—do these get lost?

• Storage has considerations associated with energy limits (e.g., offer obligations)—do

these get lost?

• SOLUTIONS (nearer-term):

− Patches to existing resource types (for lower relative sizing, storage durations) − Allow participation as conventional generator (for higher relative sizing, storage durations)

• SOLUTION (longer-term): Establish a “universal” resource type that can be parameterized

along all characteristics

Not clear that RTOs can presently optimize hybrids even with new resource type

• Hesitation to put standalone storage into DA market optimization – parameter

limitations, suboptimal or infeasible scheduling

• Operating constraints of conventional generators (e.g, ramp rate limitations, lack of Pmin,

etc) still baked into market operations

• SOLUTION: Retain right to self-optimization (akin to Order 841 right to manage state of

charge)

Capacity Accreditation Issues

• Renewable capacity accreditation based on

historical performance

• Non-dispatchability  use of “test hours” to

calculate value

• Storage capacity accreditation still being

worked out

• Effective Load Carrying Capability (ELCC)

approach adopted in NYISO & CAISO, expected in SPP & PJM

• Hybrid capacity accreditation is a

challenging combination

• “One size fits all” not possible with multiplicity
• f configurations (e.g., renewable tech, storage

duration, relative sizing, etc) and operational intentions (e.g., charging restrictions, headroom reservations, etc)

• SOLUTION: Manageable heuristics that vary by

region and penetration − ELCC basis preferable in longer-term − Hybrid accreditation method should not unduly bias for/against hybridization versus separate standalone assets

Example from 2019 SPP Energy Storage Study

(Astrape Consulting)

RTO/ISO Hybrid Resource Initiatives

Forecast ing Market Mitigation / Physical Withholding Market Participation & Software Scheduling (MOOs) Capacity Accreditation and MOO rules Offer Parameters (bidding flexibility; RT offer updates) Interconnection (queue position; interconnection constraint; study scenarios) Resource Planning Metering & Telemetry CAISO X X X X X X NYISO X X X X ERCOT X X X X X X X MISO X X X X X X X PJM X X X X SPP X X ISO-NE X X X

Walk: SPP and ISO-NE yet to start formal initiatives Jog: NYISO, MISO, and PJM in early/middle stages Run: CAISO and ERCOT nearing completion

High-level summary of RTO/ISO initiative status on ESA’s website at: https://energystorage.org/legislative-summary/status-of-hybrid-resource-initiatives-in-u-s-organized-wholesale-markets/

Other Hybrids Considerations

• Market mitigation
• Capacity bid mitigation complicated by strong MOPRs, lack of CONE, understanding of E&AS

revenues

• Energy bid mitigation likely to follow storage path

− SOLUTION: Allow hybrid operators to propose energy market opportunity cost methods

• Federal and state policy drivers
• Federal Sec. 48 investment tax credit availability could change via legislation or get updated IRS

guidance

• State policies may require – example: new SMART program rules in Massachusetts require storage-

pairing on solar projects 500+ kW

• Future hybrid resources
• Different techs

− Battery + gas turbine hybrids − Pumped storage + floating solar hybrids − Nuclear power + hydrogen P2G storage hybrids

• More than 2 resources

− Wind + solar + battery hybrids

• Do we need an Order 841 for hybrid resources?

Qu Ques estion

• ns? F

Feed eedback?

Jason Burwen, VP of Policy j.burwen@energystorage.org

Q & A

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