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COSTS VERSUS BENEFITS for

ENERGY STORAGE IN THE GRID

Walter J. Culver

Board Chairman Great Lakes Energy Institute

at Case Western Reserve University,

Cleveland, Ohio 44106

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• It can soften the stress on the grid from ramping – Solar & wind come at the wrong times, with severe, long

ramps (easily 10 MW/sec) at the start and end of the generation workday.

– Even w/o renewables there are ramps around breakfast, dinnertime, and the use of air conditioners.

• It can improve profits and reduce consumer rates by storing cheap energy and releasing it during expensive periods.

• In lieu of peaker generators, it can fill in the spikes from solar & wind intermittencies that can disrupt frequency and voltage.

Storage Has Been Conceptually Attractive for Decades

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The “Stress” Thing: Steam-Fired Generators Don’t Like to Cycle…

From D. Bradshaw, Value Proposition for Wind Smoothing and Mitigation of Ramps, EPRI Webinar, “Functional Requirements for Energy Storage Applications…,” 29 July 2010:

http://www.ttcorp.com/epri/July29_Webinar_Slides%20R1.ppt#395.

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From W. J. Culver, High-Value Energy Storage for the Grid: A Multi-Dimensional Look, The Electricity Journal 23 (Dec. 2010), pp. 59-71.

…And Storage Is Far Better Emissions-Wise

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• 32% of the grid is arguably storage-addressable, but only

• 2.5% of the grid is served by storage (≈ 30 GW of the U.S.’s 1100 GW), and of that

• 99% is pumped hydroelectric storage from reservoirs at elevation.

• Reason? Cost, interwoven with the complexity of quantifying the benefits in the business case for storage.

But Storage Penetration of the Grid is Low

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There are 17 storage applications,*

• Some needing a high power-to-energy configuration and some needing a low power-to-energy configuration.

• Some are alternatives to generation, others transmission & distribution (T&D), yet others customer-premises assets.

• The needs swing considerably around the average, requiring care to size and justify any given deployment.

• The needs do not translate well to the storage providers’ world, so their product-specification sheets lose some relevance.

* See J. Eyer, G. Corey: Sandia National Laboratories report SAND 2010-0815, Energy Storage for the Electricity Grid, Benefits and Market Potential…, 232 pages, February 2010, where

applications are called Benefit Types.

The Complexity in Assessing Benefits Starts with the Diversity of Applications in the Grid

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And “Raw” Costs Are Too High…

From W. J. Culver…, adapted from D. Rastler, “New Demand for Energy Storage,” Electric Perspectives, September/October 2008, pp 30-47: http://www.eei.org/magazine/EEI%20Electric%20Perspectives%20Article%20Listing/2008-09-01-EnergyStorage.pdf

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…Compared to the One-By-One Applications Benefits

From W. J. Culver...

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• Newspaper accounts of 10 MW wind-farm in Maui, Hawaii report $1,000 per kW (half the EPRI table’s costs, but still too high).

• The TECHNOLOGY of Li ion batteries is benefitting from the auto market – but any economies of scale are at the cell level.

• The power electronics – at least a 1/3 adder to raw-storage cost – is the subject of major federal research investments.*

* See, e.g., the ARPA-e program ADEPT (Agile Delivery of Electrical Power Technology), which is surge-funded by the American Recovery and Reinvestment Act (the 2009 stimulus package): http://www07.grants.gov/search/search.do?&mode=VIEW&oppId=52376

Especially for Electrochemical Storage, Costs ARE Dropping…

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• 13 of the 17 applications are good candidates for sharing a deployment with other applications.*

• Consider. e.g., five applications wrapped synergistically around Benefit Type 11, Time-of-Use Energy Cost Management:

…But a Straighter Path to Deeper Penetration Is Multi-Use Storage to Harvest Multiple Benefits

* See J. Eyer, page 121.

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The Reddish Line Shows the Economic Payoff is Between 50% and 100% Better in This Multi-Use

Deployment

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Deployed Capital Cost of Grid Storage $ / kW(Includes the Power Electronics)

Not-unrealisitc synergy of Benefit Type 11 with 9 & 12-14

Stand-alone aggregate of Benefit Types 9 & 12-14

Benefit Type 11 stand-alone

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• The Benefit Types (applications) have to be compatible and the combinations cost-attractive -- even if no one Benefit Type is.

• So we need tools to answer the following analytically and to make verification, validation, and accreditation (V&V&A) runs:– Which applications fit multi-use baskets specific to “us?”– How do we optimize the mix of technologies, control laws,

and sites across what operational scenarios?– What “what-ifs” do we try in the convenience of a testbed?– Is the financial payoff worth the trouble?

• This all heuristic today: To start building a definitive toolbox is a goal of the Energy Storage Validation Center (ESVC) started by Case Western Reserve and other partners.

To Realistically Harvest These Multi-Use Synergies…