Energy Storage Procurement in California - APR2014

58
Energy Storage Procurement in California Cedric Christensen California Energy Storage Alliance Strategen Consulting Electric Power Conference and Expo April 2, 2014

description

Energy Storage Procurement in California Prepared for ELECTRIC POWER 2014 Presented on Wednesday, April 02, 2014

Transcript of Energy Storage Procurement in California - APR2014

Page 1: Energy Storage Procurement in California - APR2014

Energy Storage Procurement in California

Cedric Christensen California Energy Storage Alliance Strategen Consulting

Electric Power Conference and Expo April 2, 2014

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© 2014 California Energy Storage Alliance

A sampling of our clients:

Strategic thinking and industry expertise creates profitable clean energy businesses

U.S. Department of

Energy

Strategen Consutling

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1 Energy Systems, A123 Energy Solutions, AES Energy Storage, Alton Energy, American Vanadium, Aquion Energy, AU Optronics, Beacon Power, Bosch Energy Storage Solutions, Bright Energy Storage, BrightSource Energy, CALMAC, ChargePoint, Christenson Electric Inc., Clean Energy Systems Inc., CODA Energy, Customized Energy Solutions, Deeya Energy, DN Tanks, Duke Energy, Eagle Crest Energy, EaglePicher, East Penn Manufacturing Co., Ecoult, EDF Renewable Energy, Energy Cache, EnerSys, EnerVault, EVGrid, FAFCO Thermal Storage Systems, FIAMM Group, FIAMM Energy Storage Solutions, Flextronics, Foresight Renewable Systems, GE Energy Storage, Green Charge Networks, Greensmith Energy Management Systems, Gridtential Energy, Halotechnics, Hecate Energy LLC, Hitachi Chemical, Hydrogenics, Ice Energy, ImMODO Energy Services, Innovation Core SEI, Invenergy, K&L Gates LLP, KYOCERA Solar, LightSail Energy, LG Chem Ltd., NextEra Energy Resources, NRG Energy, OCI Company Ltd., OutBack Power Technologies, Panasonic, Parker Hannifin, PDE Total Energy Solutions, Powertree Services, Primus Power, RedFlow Technologies, RES Americas, Rosendin Electric, S&C Electric Co., Saft America, Samsung SDI, SeaWave Battery Inc.,Sharp Labs of America, Silent Power, SolarCity, Sovereign Energy Storage LLC, Stem, Stoel Rives LLP, Sumitomo Corporation of America, TAS Energy, Tri-Technic, UniEnergy Technologies, Xtreme Power, and Wellhead Electric Co.

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© 2014 California Energy Storage Alliance

US DOE Global Energy Storage Database

Special thanks to Dr. Imre Gyuk, US Department of Energy, Office

of Electricity Deliverability and Energy Reliability Georgianne Huff, PE, PMP, Sandia National

Laboratories

DOE Global Energy Storage Database (GESDB) Market Development Through Access To Quality Information

www.sandia.gov/ess/database

Overview & Mission Statement

• Provides free, up-to-date information on grid-connected energy storage projects and relevant state and federal policies

• Database went live in May 2012 • 60+ data fields for each project, 50+ energy

storage technologies, 3rd party verification process, data is exportable to MS Excel or PDF

Milestones & Progress to Date

145 GW of energy storage , 850+ projects, 57 countries, 18 federal and state policies

Over 450K page views from 161 countries

2014 Plans

International partnerships Grow policy coverage internationally Include codes & standards Increase publicity and visibility Improve usability

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© 2014 California Energy Storage Alliance

Estimated Global Installed Capacity of Energy Storage (MW) Represents approximately 2.7% of Global Installed Electric Capacity1

Pumped Hydro, 142,078

Thermal 1,431

Flywheel 1,027

Compressed Air, 434

Batteries*, 331

Global Total (Excl. UPS): 145,301 MW

Non-Pumped Hydro: 3,223 MW

Projects: 145 GW installed - 50 Technologies Represented

Source: Based on DOE Global Energy Storage Database (http://www.energystorageexchange.org) Est are current as of January 2014

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1Based on EIA 2010 Total Electricity Installed Capacity Data (http://www.eia.gov/cfapps/ipdbproject/IEDIndex3.cfm?tid=2&pid=2&aid=7) * Batteries include Flow, Lithium Ion, Sodium Sulfur, Nickel Cadmium, Lead Acid, and Ultra Batteries

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© 2014 California Energy Storage Alliance

What will we learn?

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» How the cost effectiveness framework developed in California applies globally

» Where storage provides a better benefit to cost ratio than traditional generation

» How you can help

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© 2014 California Energy Storage Alliance

Agenda

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Most of the year, the system is operating at

about 55% of peak

» Why California?

» The Vision, The Plan for Procurement in California: AB2514

» Energy Storage Cost Effectiveness

» Decision to Procure 1,325 MW of Energy Storage

» PG&E, SCE, and SDG&E Procurement Plans

» Other Policies Accelerating Storage Deployment

» How Might Lessons Learned in California Apply to Other Markets?

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© 2014 California Energy Storage Alliance

0.0

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California India Russia Canada Australia Spain

Why California?

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Source: 2011 United Nations Data, 2010 US Government Revenue

California compared to 9th-13th highest ranked countries by GDP (GDP in $ Trillions)

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© 2014 California Energy Storage Alliance

Foundational Legislation

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CESA is driving results-oriented change in all of these areas

Global Warming Solutions Act of 2006 (AB 32)

33% RPS Legislation (SB 2X)

Solar Energy System Incentives: CSI (SB 1)

Energy Storage Procurement Targets (AB 2514)

Self-Generation Incentive Program: SGIP (SB 412)

Smart Grid Systems (SB 17)

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© 2014 California Energy Storage Alliance

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) California’s Electric System Is Not Being Efficiently Utilized

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The current electric system must have enough transmission, distribution, generation capacity for the largest annual peak load

Most of the year, the system is operating at

about 55% of peak

Weekly average load

California Load

Data Source: CAISO 2011 OASIS Data – Graph is for illustration purposes only.

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© 2014 California Energy Storage Alliance

Storage lets us utilize the system assets we have more efficiently

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During peak times, storage helps to reduce overall load, reducing the need for excess generation capacity

With storage, we can better utilize existing grid resources during off-peak times

Data Source: CAISO OASIS Data – Graph is for demonstration purposes only.

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© 2014 California Energy Storage Alliance

California’s Electric Power System Faces Big Challenges

San Onofre Nuclear Generation Station (SONGS) has been permanently shut down since January of 2012, taking

2,254MW offline.

San Onofre Plant Name MW

Scheduled Phase-Out

Date El Segundo, Harbor (LADWP), Morro Bay

550 December 31, 2015

Encina, Contra Costa, Pittsburg, Moss Landing

950 December 31, 2017

Haynes (LADWP) 1,581 December 31, 2019

Huntington Beach, Redondo, Alamitos, Mandalay, Ormond Beach, Scattergood (LADWP)

888 December 31, 2020

Diablo Canyon Power Plant 2,240 December 31, 2024

Many power plants could go offline in the next decade for a variety of reasons

(1) Sierra Club Report: “Meeting California’s Electricity Needs Without San Onofre or Diablo Canyon Nuclear Power Plants”. CEC Docket 13-IEP-1D, TN 71790, Jul 29, 2013

Once-Through Cooling Phase-Out Schedule(1)

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© 2014 California Energy Storage Alliance

California’s Electric Power System Faces Big Challenges

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© 2014 California Energy Storage Alliance

Agenda

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Most of the year, the system is operating at

about 55% of peak

» Why California?

» The Vision, The Plan for Procurement in California: AB2514

» Energy Storage Cost Effectiveness

» Decision to Procure 1,325 MW of Energy Storage

» PG&E, SCE, and SDG&E Procurement Plans

» Other Policies Accelerating Storage Deployment

» How Might Lessons Learned in California Apply to Other Markets?

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© 2014 California Energy Storage Alliance

California AB 2514 – Landmark Energy Storage Bill

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Directs the CPUC to adopt procurement targets, if appropriate, for each Load Serving Entities to procure viable & cost-effective energy storage by 2015 & 2020

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© 2014 California Energy Storage Alliance

Agenda

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Most of the year, the system is operating at

about 55% of peak

» Why California?

» The Vision, The Plan for Procurement in California: AB2514

» Energy Storage Cost Effectiveness

» Decision to Procure 1,325 MW of Energy Storage

» PG&E, SCE, and SDG&E Procurement Plans

» Other Policies Accelerating Storage Deployment

» How Might Lessons Learned in California Apply to Other Markets?

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© 2014 California Energy Storage Alliance

Energy Storage Is A Very Broad Asset Class

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Chemical Storage

(Batteries)

Mechanical Storage

(Flywheel)

Bulk Mechanical Storage

(Compressed Air)

Thermal Storage

(Ice) (Molten Salt)

Bulk Gravitational Storage

(Pumped Hydro) (Gravel)

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© 2014 California Energy Storage Alliance

Diversity & Modularity = Broad Electric Power System Applicability

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Bulk Storage

Ancillary Services

Distributed Storage

Distributed Storage

Commercial Storage

Residential Storage

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© 2014 California Energy Storage Alliance

Comparing Energy Storage With The Status Quo

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• Siting Constraints

• Installation Speed

• Available Flexible Range

• Capacity Factor (hours of operation/year)

• Multiple Value Stream Capture

• Ramp/Response Rate

• Total Emissions

• Water Usage

VS.

Natural Gas Peaker Energy Storage

Key Criteria to Consider

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© 2014 California Energy Storage Alliance

Energy Storage Can Be Sited Closer to the Load

Russell City Energy Center Hayward, Ca

ES Siting Source: Powertree Integrated Energy Services

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© 2014 California Energy Storage Alliance

Energy Storage: Diverse, Modular, Faster to Install! Battery and thermal storage resources can be installed much more quickly

than traditional resources, reducing risk and increasing technology flexibility

0 1 2 3 4 5 6 7

CCGT

Combustion Turbine

Battery/Thermal Storage

Time in Years

Minimum Time

Maximum Time

Siting, Permitting, and Installation Time by Resource

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© 2014 California Energy Storage Alliance

Energy Storage: Four Times the Flexible Range

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Important to compare benefits, not megawatts

100MW LMS 100

Gas Peaker Plant1

100MW Energy Storage System

50MW Min. Output

100MW Max. Output

50 MW Range 100MW Discharge

-100MW Charge

200MW Range

1. Source: http://yosemite.epa.gov/R9/air/EPSS.NSF/e0c49a10c792e06f8825657e007654a3/8a153d8ab24cb6868825723400679b82/$FILE/WCE%20Evaluation.pdf

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© 2014 California Energy Storage Alliance

Energy storage can be utilized more fully throughout the year

Energy Storage: Three Times the Utilization

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100 MW LMS 100

Gas Peaker Plant1

100MW Energy Storage System

>95% Utilization Utilization

20%-40%

0% 50% 100%

Startup Time

Shutdown Time

Min Utilization

Max Utilization

Unutilized

1. Source: http://yosemite.epa.gov/R9/air/EPSS.NSF/e0c49a10c792e06f8825657e007654a3/8a153d8ab24cb6868825723400679b82/$FILE/WCE%20Evaluation.pdf

0% 50% 100%

Startup Time

Shutdown Time

Min Utilization

Max Utilization

Unutilized

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© 2014 California Energy Storage Alliance

Energy Storage Can Capture Multiple Value Streams

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Energy storage can be fully utilized throughout the year, providing multiple services from a single asset

99.7%

4.2% 0%

10%

20%

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40%

50%

60%

70%

80%

90%

100%

EnergyStorage

CombustionTurbine

0%

100%

% U

tiliz

atio

n

% Total Annual Hourly Asset Utilization

Graphs based on EPRI cost effectiveness model data, “Bulk Peaker substitution application” CPUC Workshop March 25, 2013

Energy storage is a cost effective way to provide numerous benefits to many stakeholders, few of which can be monetized today.

Down Regulation

Up Regulation

Spinning Reserves

Energy

Services Provided by Energy Storage Over the Year*

*All services include charging and discharging bids

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© 2014 California Energy Storage Alliance

Energy storage responds far more quickly and is more effective

Energy Storage Can Respond Faster and is More Effective

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Energy Storage System

Full Power Ramp

<1 second

Graph Source: Kirby, B. “Ancillary Services: Technical and Commercial Insights.” Wartsilla, July, 2007. pg. 13 1. http://www.cpvsentinel.com/about.html

LMS 100 Gas Peaker Plant

Full Power Ramp

10 Minutes

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© 2014 California Energy Storage Alliance

Prorated RA Value can actually provide greater capacity at critical times

Smaller capacity increments are good for the system

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(4) 100 MW 1h Energy Storage

Systems

(same RA Value as LMS 100, with prorating)

LMS 100 Gas Peaker Plant

0

50

100

150

200

250

18:00 19:00 20:00 21:00 22:00

Flex. Capacity

Min. Capacity

Load

0

50

100

150

200

250

18:00 19:00 20:00 21:00 22:00

Flex. Capacity

Min. Capacity

Load

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© 2014 California Energy Storage Alliance

Status Quo: CT Operation at EME Walnut Creek Energy Park

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State of the art LMS 100 installations require significant start-up and shutdown operating hours, accounting for at least 20% of operations:

Startup Hours, 350h

Shutdown Hours, 350h

Min Operating Hours, 1,052h

Max Operating Hours, 1,716h

Not Utilized, 5,292h

EME Walnut Creek Energy Park SCAQMD Analysis(1)

Capacity Factor - min 20%

Capacity Factor - max 40%

Operating Hours - Normal 2768

Operating Hours - Start-up 350

Operating Hours - Shutdown 350

Service Factor - Normal 32%

Service Factor - Total 40%

Minimum load 50%

Average load 75%

Starts/year 350

Max starts/day 2

Max start-ups/year 350

Start-up time (minutes) 35

1) http://yosemite.epa.gov/R9/air/EPSS.NSF/e0c49a10c792e06f8825657e007654a3/8a153d8ab24cb6868825723400679b82/$FILE/WCE%20Evaluation.pdf

Chart of Annual Plant Operation

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© 2014 California Energy Storage Alliance

Conventional Peakers are Expensive and Use Tons of Water

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1) Source: CEC http://www.energy.ca.gov/2009publications/CEC-800-2009-003/CEC-800-2009-003-CMF.PDF

J-Power Orange Grove Peaking Plant

• 100 MW (2 x LM6000)

• $174/kW-year in capacity revenue (Source: FERC EQR)

• 25 year tolling agreement with SDG&E

“Water delivery will require approximately one [6500 gallon] truck per hour for fresh water and one truck per hour for reclaimed water during times when the plant is operational.”1

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© 2014 California Energy Storage Alliance

Even Repowered Peakers are Expensive

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LADWP Haynes Repower 6 x LMS100 $782M / 577.8 net MW Cost: $1353/kW1 Due to repower, cost excludes: • Land aquisition & permitting • New transmission infrastructure • Site access construction

1) Source: http://www.powermag.com/ladwp-harnesses-lms100-to-solve-once-through-cooling-dilemma/

Repower: Building a new power plant on the same site as an old, decommissioned plant

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© 2014 California Energy Storage Alliance

Peak vs. Off-peak CO2 Emission Rate(1) (Tons/MWh)

Peak- Heavy A/C Use: Peaker Plants

Off-Peak - Very Little A/C Use: Better Use of Utility Assets

Baseload Fossil Fuel Plant

Peaker Fossil Fuel Plant

Optimizing the System Also Reduces GHG Emissions

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» Percent CO2 / MWh

Reduction Shifting from Peak

to Off-Peak:

SCE: 33% reduction

PG&E: 26% reduction

SDG&E: 32% reduction

» Also ~56% lower NOx

emissions

E3 Calculator Tons CO2 / MWh

Summer On-Peak

Summer Mid-Peak

Summer Off-Peak

Utility

PG&E 0.67 0.61 0.49

SCE 0.72 0.63 0.49

SDG&E 0.69 0.58 0.47

1) Source: Southern California Edison

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© 2014 California Energy Storage Alliance

Summary

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(1)Excluding start-up and shutdown time

(2)http://www.energy.ca.gov/2011_energypolicy/doc

uments/2011-02-15_workshop/comments/California_Energy_Storage_Alliance_03032011_TN-59863.pdf

100 MW Gas Turbine

10 minute ramp

50 MW flexible range

2768 useable hours/year(1)

6500 gallons per hour

Status quo GHG emissions

Energy storage can provide much greater benefits per MW as a flexible resource!

Energy Storage

Benefits

>600x the ramp rate

>4x the flexible range

>3x the operational

hours

Less water usage on

many sites

Lower GHG

emissions

100 MW Energy Storage

<1 second ramp

200 MW of flexible range

>8300 useable hours/year

Little to no water usage

Reduces GHG emissions by up to

90%(2)

VS.

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© 2014 California Energy Storage Alliance

Results: Bulk Peaking Power Plant

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Preliminary results by EPRI using stakeholder input showed a benefit to cost ratio over one for nearly every scenario

» Projects were assumed to be utility scale projects starting in 2015 and 2020

» Cost effectiveness results did not include GHG benefits of storage or GHG costs due to AB32 implementation

» High renewable penetration cases had the highest benefit to cost ratios for storage.

» GHG benefits for storage are greater the more renewables we have on the grid.

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© 2014 California Energy Storage Alliance

Agenda

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Most of the year, the system is operating at

about 55% of peak

» Why California?

» The Vision, The Plan for Procurement in California: AB2514

» Energy Storage Cost Effectiveness

» Decision to Procure 1,325 MW of Energy Storage

» PG&E, SCE, and SDG&E Procurement Plans

» Other Policies Accelerating Storage Deployment

» How Might Lessons Learned in California Apply to Other Markets?

Page 34: Energy Storage Procurement in California - APR2014

© 2014 California Energy Storage Alliance

Historic October 17, 2013 Decision: 1.325 GW Goal!

Use case category, by

utility

2014 2016 2018 2020 Total

Southern California Edison

Transmission

Distribution

Customer

50

30

10

65

40

15

85

50

25

110

65

35

310

185

85

Subtotal SCE 90 120 160 210 580

Pacific Gas and

Electric

Transmission

Distribution

Customer

50

30

10

65

40

15

85

50

25

110

65

35

310

185

85

Subtotal PG&E 90 120 160 210 580

San Diego Gas &

Electric

Transmission

Distribution Customer

10

7 3

15

10 5

22

15 8

33

23 14

80

55 30

Subtotal SDG&E 20 30 45 70 165

Total - all 3 utilities 200 270 365 490 1,325

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© 2014 California Energy Storage Alliance

AB 2514 Implementation Process and Timeline

Final Decision implementing recommendations

Conduct Cost-Effectiveness Evaluation of Key Applications

Propose procurement recommendations

Revise Recommendations Set Cost-Effectiveness Methodology

Jan. Feb. Mar. Apr. May June July August Sept. Oct. Nov. Dec. 2013

2014 Jan. Feb. Mar. Apr. May June July August Sept. Oct. Nov. Dec.

March 1, 2014

Deadline for IOUs to file procurement application

October 1, 2014

POU Compliance Deadline

December 1, 2014

First round of solicitations

Complete Cost Effectiveness Evaluation

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© 2014 California Energy Storage Alliance

Agenda

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Most of the year, the system is operating at

about 55% of peak

» Why California?

» The Vision, The Plan for Procurement in California: AB2514

» Energy Storage Cost Effectiveness

» Decision to Procure 1,325 MW of Energy Storage

» PG&E, SCE, and SDG&E Procurement Plans

» Other Policies Accelerating Storage Deployment

» How Might Lessons Learned in California Apply to Other Markets?

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© 2014 California Energy Storage Alliance

SCE Procurement Plan

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© 2014 California Energy Storage Alliance

SDG&E Procurement Plan

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© 2014 California Energy Storage Alliance

SDG&E Procurement Plan

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© 2014 California Energy Storage Alliance

Consistent Evaluation Protocol (CEP)

» Descriptive information comes directly from the offers.

» Quantitative information includes a calculation of net market value based on public inputs.

» Qualitative information includes a “yes/no” indication of which storage end uses might exist for each offer.

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© 2014 California Energy Storage Alliance

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Agenda

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» Why California?

» The Vision, The Plan for Procurement in California: AB2514

» Energy Storage Cost effectiveness

» Decision to Procure 1,325 MW of Energy Storage

» PG&E, SCE, and SDG&E Procurement Plans

» Other Policies Accelerating Storage Deployment

» How Might Lessons Learned in California Apply to Other Markets?

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© 2014 California Energy Storage Alliance

Storage Is Now Part of Long Term Procurement Planning

CPUC Proposed Decision requires SDG&E to procure an additional 25MW+ of energy storage for local capacity requirements to replace SONGS

February 11, 2014

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© 2014 California Energy Storage Alliance

As of December 2013 684 storage applications (767 by 1/14) … Only 6 installed thus far

134

183212

253 253 253 253

109124

136 143 143 143 143

145

155157

684604

132

276273

258

229

76

2013 Q1-Q3

2,382

136

2012

2,271

117

2011

1,715

77

2010

1,544

519

299

79

2002

260

138

2001

70

920 920

81

920 920 920 920 920

2009

1,390

2008

1,360

2007

1,353

2006

1,316

920

2005

1,007

651

2004

898

595

2003

86 83

920

684

276

157

136 86

76 24 14

Total

2,382 9

1. Other is comprised of pressure reduction turbines and waste heat to power Note: Cancelled projects excluded Source: SGIP Quarterly Statewide Reporting Q3 2013 (www.cpuc.ca.gov) Chart courtesy of Bryan Early, Conservation Strategy Group

Cumulative number of SGIP projects 2001-2013

Other1

Gas

turbine

Wind

Fuel Cell Elec.

Bio Gas

Fuel Cell CHP

Fuel Cell Elec.

Microturbine

Internal

Combustion

A.E.S. (Adv. Electrical Storage)

Photovoltaic

Technology

SGIP

inception

SGIP

Timeline

06/07: PV

phased out of

program

07/08: CHP

phased out of

program

08/09:

A.E.S., Fuel

Cells and

Wind

become

eligible for

SGIP

10/11: revamp;

technology

neutral, focus

on emission

reductions

Cumulative Data

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© 2014 California Energy Storage Alliance

Governor’s Executive Order: 1,500,000 EVs by 2025

Infrastructure is Needed for: • 1,000,000 EVs by 2020 • 1,500,000 EVs by 2025

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© 2014 California Energy Storage Alliance

Agenda

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» Why California?

» The Vision, The Plan for Procurement in California: AB2514

» Energy Storage Cost effectiveness

» Decision to Procure 1,325 MW of Energy Storage

» PG&E, SCE, and SDG&E Procurement Plans

» Other Policies Accelerating Storage Deployment

» How Might Lessons Learned in California Apply to Other Markets?

Page 50: Energy Storage Procurement in California - APR2014

© 2014 California Energy Storage Alliance

Strategies for Energy Storage Success

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» Use all storage benefits – do not just rely on time shifting

» Create a common set of benefits and use cases

» Invest in a common and accessible model

» Clear policy hurdles to accessing and “stacking” benefits

» Compare storage to other grid assets, not just energy prices

» Collaborate with all stakeholders, especially incumbents

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© 2014 California Energy Storage Alliance

How you can help

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• Join the California Energy Storage Alliance

• Discover your North American strategy

• Come to Energy Storage North America

Page 52: Energy Storage Procurement in California - APR2014

© 2014 California Energy Storage Alliance

Successful Launch in September 2013

“I’ve been to a lot of conferences, yet I’ve learned more

at Energy Storage North America in the first four hours

than I’ve learned at any other conference I’ve attended”

Phil Undercuffler, Director, Product Management and Strategy

at OutBack Power Technologies

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© 2014 California Energy Storage Alliance

Join us in San Jose on September 30 – October 2, 2014

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JOIN THE INDUSTRY

LEADERS

Mike Florio Commissioner –

California Public Utilities Commission

Carla Peterman Commissioner –

California Public Utilities Commission

Mateo Jaramillo Director of Powertrain Business Development

Tesla Motors

Peter Rives Co-Founder & CTO

Solar City

Eric Schmitt Vice President, Operations

California ISO

John Norris Commissioner

Federal Energy Regulatory Commission

Fong Wan Senior Vice President, Energy

Procurement Pacific Gas & Electric

HIGHLIGHTS 3 Days

80 Speakers

6 Tracks

Workshops

Site Visits

Awards

3 FOCUS AREAS

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© 2014 California Energy Storage Alliance

Thank you!

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Cedric Christensen Strategen Consulting California Energy Storage Alliance 2150 Allston Way, Suite 210 Berkeley, CA 94704 [email protected] www.strategen.com www.storagealliance.org

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RFO Requirements

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RFO Requirements

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RFO Requirements

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