NON-SOLAR DISTRIBUTED GENERATION MARKET RESEARCH
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Transcript of NON-SOLAR DISTRIBUTED GENERATION MARKET RESEARCH
NON‐SOLAR DISTRIBUTED GENERATION MARKET RESEARCH B&V PROJECT NO. 186018 B&V FILE NO. 40.0000
PREPARED FOR
Portland General Electric
24 SEPTEMBER 2015
®
®
©Black & Veatch Holding Company 2014. All rights reserved.
Portland General Electric | Non‐Solar Distributed Generation Market Research
BLACK & VEATCH | Table of Contents i
Table of Contents LegalNotice..............................................................................................................................................................11.0 ExecutiveSummary............................................................................................................................1‐1
1.1 TechnologyCharacteristicsandCosts.........................................................................................1‐11.2 FinancialAssessment.........................................................................................................................1‐31.3 AchievablePotential...........................................................................................................................1‐6
2.0 Introduction..........................................................................................................................................2‐13.0 TechnicalCharacteristicsandCosts.............................................................................................3‐1
3.1 BatteryEnergyStorageSystems....................................................................................................3‐13.1.1 TechnicalCharacteristics...............................................................................................3‐13.1.2 BESSCosts............................................................................................................................3‐8
3.2 FuelCells................................................................................................................................................3‐113.2.1 TechnicalCharacteristics.............................................................................................3‐123.2.2 FuelCellCosts...................................................................................................................3‐20
3.3 Microturbines......................................................................................................................................3‐233.3.1 TechnicalCharacteristics.............................................................................................3‐233.3.2 MicroturbineCosts.........................................................................................................3‐26
4.0 FinancialAssessment.........................................................................................................................4‐14.1 ModelAssumptions.............................................................................................................................4‐1
4.1.1 TechnicalandCostAssumptions................................................................................4‐14.1.2 FinancialandIncentiveAssumptions.......................................................................4‐54.1.3 CustomerLoad...................................................................................................................4‐6
4.2 EnergyStorage......................................................................................................................................4‐84.2.1 SystemSize..........................................................................................................................4‐94.2.2 Results.................................................................................................................................4‐10
4.3 FuelCells................................................................................................................................................4‐144.3.1 SystemSizing....................................................................................................................4‐144.3.2 Results.................................................................................................................................4‐15
4.4 Microturbines......................................................................................................................................4‐164.4.1 SystemSizing....................................................................................................................4‐164.4.2 Results.................................................................................................................................4‐17
5.0 AchievablePotential..........................................................................................................................5‐1
LIST OF TABLES Table1‐1 BESSTechnicalCharacteristics......................................................................................................1‐1Table1‐2 FuelCellsandMicroturbinesTechnicalCharacteristics......................................................1‐2Table1‐3 TechnicalandFinancialAssumptions‐BESS(2014$).........................................................1‐2Table1‐4 TechnicalandFinancialAssumptions‐FuelCellsandMicroturbines
(2014$).....................................................................................................................................................1‐3
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BLACK & VEATCH | Table of Contents ii
Table1‐5 SummaryofLevelizedCostofEnergyforFuelCellsandMicroturbines(2014$/kWh).........................................................................................................................................1‐5
Table1‐6 ForecastedAnnualBESSAdoption...............................................................................................1‐6Table3‐1 BESSComponents................................................................................................................................3‐3Table3‐2 TypicalLithiumIonBatteryPerformanceParameters........................................................3‐6Table3‐3 VanadiumRedoxFlowBatteryVersusLithiumIonBattery..............................................3‐8Table3‐4 EnergyStorageSystemConceptualEPCCostsfor2015(2014$)..................................3‐10Table3‐5 DistinguishingFeaturesofFuelCellTechnologies..............................................................3‐12Table3‐6 TypicalApplicationsforFuelCells..............................................................................................3‐13Table3‐7 PerformanceCharacteristicsofBloomEnergyFuelCellSystems.................................3‐16Table3‐8 PerformanceCharacteristicsofFuelCellEnergyFuelCellSystems..............................3‐18Table3‐9 PerformanceCharacteristicsofDoosanPureCellModel400..........................................3‐19Table3‐10 FuelCellProjectsApplyingforSGIPFundingin2012to2014.......................................3‐21Table3‐11 PerformanceCharacteristicsofCapstoneC65Microturbine..........................................3‐25Table3‐12 MicroturbineProjectsApplyingforSGIPFundingin2011to2014.............................3‐26Table4‐1 TechnicalandFinancialAssumptions‐BESS(2014$).........................................................4‐1Table4‐2 TechnicalandFinancialAssumptions‐FuelCellsandMicroturbines
(2014$).....................................................................................................................................................4‐2Table4‐3 SystemLossSummaryforFuelCellsandMicroturbines....................................................4‐2Table4‐4 NaturalGasWholesaleandRetailCommercialForecast(2014$)...................................4‐4Table4‐5 AvailableFinancialIncentivesin2016Cases...........................................................................4‐5Table4‐6 FinancialModelingAssumptions..................................................................................................4‐6Table4‐7 CommercialCustomerTypeLoadSummary............................................................................4‐7Table4‐8 PGECommercialRateScheduleSummary(2014Rates)....................................................4‐8Table4‐9 SolarPVSystemSizebyCustomerType....................................................................................4‐9Table4‐10 BESSOnlySystemPaybackSummarybyCustomerType...............................................4‐12Table4‐11 FuelCellCustomerTypeandSystemSize...............................................................................4‐14Table4‐12 FuelCellSystemPaybackbyCustomerType,CPI+1Case,BaseFuelCost..............4‐15Table4‐13 FuelCellRealLevelizedCostofEnergyEstimates(2014$/kWh).................................4‐15Table4‐14 MicroturbineCustomerTypeandSystemSize......................................................................4‐16Table4‐15 MicroturbineLevelizedCostofEnergy(2014$/kWh).......................................................4‐17Table5‐1 ForecastedAnnualBESSAdoption...............................................................................................5‐2
LIST OF FIGURES Figure1‐1 BESSOnlyPaybackbyCustomerType.......................................................................................1‐4Figure3‐1 EnergyStorageApplicationsAcrosstheElectricUtilitySystem......................................3‐1Figure3‐2 LithiumIonBatteryShowingDifferentElectrodeConfigurations..................................3‐4Figure3‐3 LithiumIonBatteryEnergyStorageSystemLocatedatBlack&VeatchHQ...............3‐5Figure3‐4 DiagramofVanadiumRedoxFlowBattery(Source:DOE/ElectricPower
ResearchInstitute[EPRI]2013ElectricityStorageHandbookin
Portland General Electric | Non‐Solar Distributed Generation Market Research
BLACK & VEATCH | Table of Contents iii
CollaborationwithNationalRuralElectricCooperativeAssociation[NRECA]).................................................................................................................................................3‐6
Figure3‐5 VanadiumRedoxFlowBattery(Source:PrudentEnergybrochure).............................3‐7Figure3‐6 ContainerizedFlowBattery(Source:UniEnergy)..................................................................3‐7Figure3‐7 CaliforniaSGIPHistoricalEnergyStorageCosts($perkWh)(Source:SGIP
Database).................................................................................................................................................3‐9Figure3‐8 SchematicofaHydrogen‐FueledFuelCell(Source:
www.fuelcelltoday.com).................................................................................................................3‐11Figure3‐9 FuelCellFlowDiagram....................................................................................................................3‐14Figure3‐10 StationaryFuelCellInstalledCost(withandwithoutincentives)–2003to
2013(Source:NREL)........................................................................................................................3‐20Figure3‐11 Cut‐AwayofMicroturbine(left)andTypicalMicroturbineInstallation
(right)withHeatRecoveryModule............................................................................................3‐23Figure4‐1 RetailNaturalGasForecast,BaseandLowCases(2014$).................................................4‐3Figure4‐2 IllustrativeExampleofaLargeHotelUsing400kWhBESSandPV..............................4‐8Figure4‐3 BESSPaybackCurves,2035CPI+1.............................................................................................4‐10Figure4‐4 BESSOnlyPaybackbyCustomerType.....................................................................................4‐11Figure4‐5 BESSplusPVSystemPaybackbyCustomerType................................................................4‐13Figure5‐1 SolarPVMaximumMarketPenetrationCurveRelativetoPaybackPeriod................5‐1
Portland General Electric | Non‐Solar Distributed Generation Market Research
BLACK & VEATCH | Legal Notice LN‐1
Legal Notice ThisreportwaspreparedforPortlandGeneralElectric(PGE)byBlack&VeatchCorporation(Black&Veatch)andisbasedoninformationnotwithinthecontrolofBlack&Veatch.Black&Veatchhasassumedthattheinformationprovidedbyothers,bothverbalandwritten,iscompleteandcorrectandhasnotindependentlyverifiedthisinformation.Whileitisbelievedthattheinformation,data,andopinionscontainedhereinwillbereliableundertheconditionsandsubjecttothelimitationssetforthherein,Black&Veatchdoesnotguaranteetheaccuracythereof.SinceBlack&Veatchhasnocontroloverthecostoflabor,materials,orequipmentfurnishedbyothers,orovertheresourcesprovidedbyotherstomeetprojectschedules,Black&Veatch’sopinionofprobablecostsandofprojectschedulesshallbemadeonthebasisofexperienceandqualificationsasaprofessionalengineer.Black&Veatchdoesnotguaranteethatproposals,bids,oractualprojectcostswillnotvaryfromBlack&Veatch’scostestimatesorthatactualscheduleswillnotvaryfromBlack&Veatch’sprojectedschedules.
UseofthisreportoranyinformationcontainedthereinbyanypartyotherthanPGE,shallconstituteawaiverandreleasebysuchthirdpartyofBlack&Veatchfromandagainstallclaimsandliability,including,butnotlimitedto,liabilityforspecial,incidental,indirect,orconsequentialdamagesinconnectionwithsuchuse.Inaddition,useofthisreportoranyinformationcontainedhereinbyanypartyotherthanPGEshallconstituteagreementbysuchthirdpartytodefendandindemnifyBlack&Veatchfromandagainstanyclaimsandliability,including,butnotlimitedto,liabilityforspecial,incidental,indirect,orconsequentialdamagesinconnectionwithsuchuse.Tothefullestextentpermittedbylaw,suchwaiverandreleaseandindemnificationshallapplynotwithstandingthenegligence,strictliability,fault,breachofwarranty,orbreachofcontractofBlack&Veatch.Thebenefitofsuchreleases,waivers,orlimitationsofliabilityshallextendtotherelatedcompaniesandsubcontractorsofanytierofBlack&Veatch,andtheshareholders,directors,officers,partners,employees,andagentsofallreleasedorindemnifiedparties.
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BLACK & VEATCH | Executive Summary 1‐1
1.0 Executive Summary Black&VeatchwascommissionedbyPortlandGeneralElectric(PGE)toassessthepotentialdeploymentofsolarandotherdistributedgeneration(DG)technologies,giventechnical,financialandotherachievabilitycriteria.Thisreportexaminesthepotentialofthreeclassesofnon‐solarDGforelectricity‐onlyapplications:batteryenergystoragesystems(BESS),fuelcells,andmicroturbines.Theassessmentcoveredvarioustechnologieswithineachclassthataremostpracticalforbehind‐the‐meter,customer‐sitedapplicationsforcommercialcustomers.Thesetechnologiesincludethefollowing:
1. BatteryEnergyStorageSystems(BESS)
a. Lithiumion
b. Vanadiumredoxflowbattery
2. FuelCells(NaturalGas)
a. Solidoxidefuelcells(SOFC)
b. Moltencarbonatefuelcells(MCFC)
c. Phosphoricacidfuelcells(PAFC)
3. Microturbines(NaturalGas)
Whilethereareothertechnologiesthatexist,theywerenotincludedbecauseeithertheyarenotsuitableforstationaryapplicationsortheyarestillinrelativelyearlystagesofcommercialization.Black&Veatchalsofocusedonthepotentialforusingnaturalgasasthefuelinput,asbiogasutilizationwouldbehighlysite‐specificandwouldposeadditionalissuesaroundmaintenanceforthesetechnologies.Combinedheatandpower(CHP)applicationswerenotincludedinthescopeofthisstudy,astheyrequirecustomerandsitespecificevaluations
1.1 TECHNOLOGY CHARACTERISTICS AND COSTS Thestudyfirstconsideredthetechnicalcharacteristics,thestatusofeachofthetechnologies,andcurrentandforecastedcostsofthevarioustechnologies.AsummaryofthesystemcharacteristicsandstatusofdeploymentforthevarioustechnologiesisprovidedinTable1‐1andTable1‐2.ForBESS,theroundtripefficiencyreflectstheoverallefficiencylossesincurredduringbothcharginganddischargingofthesystem.
Table 1‐1 BESS Technical Characteristics
COMMERCIALSTATUS APPLICATION
SYSTEMSIZING(KWH)
ROUNDTRIPEFFICIENCY
BESS
LithiumIon Advanced PeakShaving/LoadShifting
5to32,000 75to90percent
VanadiumRedox Emerging PeakShaving/LoadShifting
200to8,000 65to75percent
kWh‐kilowatt‐hour
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BLACK & VEATCH | Executive Summary 1‐2
Table 1‐2 Fuel Cells and Microturbines Technical Characteristics
COMMERCIALSTATUS APPLICATION
MINIMUMUNITSIZE(KW)
ELECTRICALEFFICIENCY(HHV),%
FuelCells
SOFC Emerging Baseload 210‐262.5 47to54
MCFC Advanced Baseload 300‐1400 43
PAFC Advanced Baseload 400 42
Microturbines Mature Baseload/Dispatchable(limited)
65 25
kW‐kilowattHHV‐higherheatingvalue
Asfarastechnicalfeasibility,allofthesetechnologieshavealreadybeendeployedinsomecapacitynationallyandinternationally,sotheyaretechnicallyfeasible,andtheirpotentialarenotlimitedbyresourceavailability,asisthecasewithsolarandwindresources.Thegreaterconstraintsareassociatedwiththeeconomicsofthesystems.
ThecostassumptionsusedforthevarioustechnologiesareshowninTable1‐3andTable1‐4.Itshouldbenotedthatdramaticcostdeclinesareassumedforalltechnologiesbetween2016and2035,exceptformicroturbines.Whilethereisconsiderableuncertaintywhetherthesetechnologiescanachievethoselowercostlevels,Black&Veatchwantedtotestwhetherthesesystemswouldbefinanciallyviableatthoselowerlevels.
Table 1‐3 Technical and Financial Assumptions ‐ BESS (2014$)
TECHNOLOGYSIZE(KWH)
2016 2035
CAPITALCOST($/KW)
FIXEDO&M($/KW‐YR)
ROUND‐TRIP
EFFICIENCY(%)
CAPITALCOST($/KW)
FIXEDO&M
($/KW‐YR)
ROUND‐TRIP
EFFICIENCY(%)
BESS 10 1500 20 87 400 20 87
$/kW‐dollarsperkilowatt‐hourO&M‐operationsandmaintenance
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BLACK & VEATCH | Executive Summary 1‐3
Table 1‐4 Technical and Financial Assumptions ‐ Fuel Cells and Microturbines (2014$)
TECHNOLOGYSIZE(KW)
2016 2035
CAPITALCOST($/KW)
FIXEDO&M($/KW‐YR)
HEATRATE(BTU/KWH)
CAPITALCOST($/KW)
FIXEDO&M($/KW‐YR)
HEATRATE(BTU/KWH)
SOFC 210 8000 1000 7000 1500 150 5600
MCFC 300 4000 300 8000 1500 150 8000
PAFC 400 6000 150 9000 1500 150 9000
Microturbine 65 4000 170 13400 4000 170 13400
Btu/kWh‐Britishthermalunitperkilowatt‐hour
1.2 FINANCIAL ASSESSMENT Tounderstandprojectfinancials,Black&VeatchmodeledeachofthetechnologiesforanumberofcommercialcustomertypesusingamodifiedscriptingoftheNationalRenewableEnergyLaboratory(NREL)SystemAdvisorModel(SAM)software.Themodelincorporatestechnicalperformanceparameters,systemcapitalandO&Mcosts,projectfinancingandtaxes,incentives,andutilityratedata,togetherwithcustomerloaddata,toproduceasuiteofresultsincludingnetpresentvalue(NPV),paybackperiod,levelizedcostofenergy(LCOE),annualcashflow,andannualenergysavings.Black&Veatchmodeledscenariosfor2016and2035foralltechnologiesandcustomertypes.ForBESS,thesystemwastestedwithandwithoutsolarphotovoltaic(PV).Also,itwasimportanttousedifferentcustomertypestounderstandhowdifferentloadshapesmaybenefitthroughelectricitybillreductionsforbothdemandandenergycharges,undereachoftheirrespectiverateclasses.Foreachcustomertype,eachofthetechnologieswasalsosizedtomeeteitherthecustomerloadorminimumtechnologyunitsize.Forboththe2016and2035cases,Black&Veatchalsotestedtwoutilityratesescalatingtwoways:attheConsumerPriceIndex(CPI)of2percent,andatCPIplus1percent(CPI+1).Additionally,fuelcellsandmicroturbinesweretestedunderbaseandlowgaspricescenarios.
Ingeneral,noneoftheBESSoptionsevaluatedarefinanciallyviableinthe2016timeframe,definedaspaybackoffewerthan20years,givenestimatedcosts,performance,availableincentives,andutilityrates.Asidefromcostofthesystems,anexaminationofPGE’scommercialretailratesshowedthatthereislittleornobenefitinloadshiftingbetweenpeakandoff‐peakhours,astheround‐tripefficiencyofBESSwashesoutthetimeofuse(TOU)pricedifferentialbetweenpeakandoff‐peakhours.Thus,demandchargereductionistheonlysourceofbillsavings,andPGEdemandchargesforcommercialcustomersaresomewhatlowcomparedtootherpartsofthecountrywhereBESSarebeingdeployed.By2035,assumingdramaticinstalledcostdeclines,BESSoptionsdoappeartobecomefinanciallyviable.Thepaybacksforthecustomersrangefrom5to10yearsformostcustomers.RefertoFigure1‐1.
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BLACK & VEATCH | Executive Summary 1‐4
Figure 1‐1 BESS Only Payback by Customer Type
Theanalysisoffuelcellsandmicroturbinesinallcases,includinglownaturalgaspricecases,showedthatnoneofthesetechnologiesresultinpaybackslessthanthelifeoftheproject.Oneexceptionisthecaseforsecondaryschoolsin2035deployingSOFC,underalownaturalgaspricescenariowithratesthatincreaseatCPI+1,resultsinapaybackperiodlessthanthelifeoftheproject.However,thisassumesthattheinstalledsystemandO&Mcostsdropsubstantiallyandefficiencygainsareachievedforthetechnology,whichishighlyuncertaingiventhetechnologystatustoday.AsidefromcapitalandO&Mcost,thefinancialsofthesetechnologiesrelativetoutility‐suppliedpowerarepenalizedintwoways:higherheatratescomparedtoPGE’ssystemheatrateandnaturalgaspricedatretailrates.Thesedrawbacksareunlikelytochangeunderanycondition.RefertoTable1‐5forthelevelizedcostofenergy.
0 5 10 15 20 25
FullServiceRestaurant
Hospital
LargeHotel
LargeOffice
MediumOffice
Outpatient
PrimarySchool
SecondarySchool
QuickServiceRestaurant
SmallHotel
SmallOffice
StandAloneRetail
StripMall
Supermarket
Warehouse
ES2035
ES2016
20‐YearSystem Life
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BLACK & VEATCH | Executive Summary 1‐5
Table 1‐5 Summary of Levelized Cost of Energy for Fuel Cells and Microturbines (2014$/kWh)
YEARNATURALGAS
CASE SOFC MCFC PAFC MICROTURBINE
2016Base $0.24 $0.13 $0.13 $0.16
Low $0.23 $0.12 $0.12 $0.14
2035Base $0.08 $0.10 $0.11 $0.18
Low $0.07 $0.09 $0.10 $0.15
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BLACK & VEATCH | Executive Summary 1‐6
1.3 ACHIEVABLE POTENTIAL DevelopingestimatesofachievablepotentialfortheDGtechnologiesexaminedinthisstudyischallenginginthatthesetechnologiesarenotfinanciallyviableinthenear‐termundercurrentfinancialconditions,andthelong‐termcostoutlookisquiteuncertainformanyofthesetechnologies.Anotheraddedcomplexityisthatappropriatelysizingofthesystems,matchedtoacustomer’sloadshape,reallydrivesthefinancials.Inorderforthetechnologiestobefinanciallyviable,technologycostswouldneedtodropsubstantially,additionalpoliciesandincentiveswouldneedtobeputinplace,andchangesinratestructureareneededtopromoteadoption.Absentthoseconditions,Black&Veatchforecastsminimaladoptionofthesetechnologiesoverthestudyperiod.Ifanyadoptionoccurs,itwouldbetowardsthelatterdecade(2026to2035)oftheanalysisperiodwhenbetterclarityoncostsisavailable.TheonemajorcaveatinthisstudyisthatBlack&Veatchfocusedontheimpactofthesesystemsoncustomerelectricitybillsbutdidnotaccountforthevalueofreliabilityandpowerqualitytothecustomer.Thesefactorsaremuchmoredifficulttovalueandcouldvarywidelybycustomertype.PGEmaywanttoconsiderstudyingthesevaluestocustomersfurtherinfutureanalysis.
Asdiscussedinthefinancialassessmentsection,onlyBESStechnologymakessomefinancialsenseby2035.Black&Veatchestimatesthatduringthe2025to2035timeframe,approximately2.6to5.1MWperyearofenergystorageinstallationsmaybepossibleifcostsdofalltoforecastedlevelsandthefinanciallyoptimalsystemsizeis10kWhpercustomer.Adoptionmaybehigherifcertaincustomertypes,suchascriticalfacilities(hospitals,schools,etc.),placesomevalueonreliabilityandpowerqualityassociatedwithinstallingBESSand,thus,installlargersystemsand/orhavewideradoptiondespitepoorpaybacks.However,thismetricwasnotstudiedinthisanalysis.
Table 1‐6 Forecasted Annual BESS Adoption
BESSCAPACITY(MW/MWH)
2016TO2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
LowAdoption
0 2.6/5.2
2.6/5.2
2.6/5.2
2.6/5.2
2.6/5.2
2.6/5.2
2.6/5.2
2.6/5.2
2.6/5.2
2.6/5.2
HighAdoption
0 5.2/10.4
5.2/10.4
5.2/10.4
5.2/10.4
5.2/10.4
5.2/10.4
5.2/10.4
5.2/10.4
5.2/10.4
5.2/10.4
FortheBESSplussolarPVcases,itwasdeterminedthattheadditionofBESStoasolarinstallationdoesnotimprovethefinancialsofthecombinedsystem,and,infact,inthe2016cases,BESScausespaybacktoincrease.Therefore,inthenear‐term,giventhatsolarPVinstallationsareabletonetmeter,thereisnoincrementalbenefittodeployinganenergystoragesystemwithPVuntilnetmeteringisnolongeravailable.By2035,BESScostswillhavefallenenoughthatBESSinstallations,combinedwithsolarPV,wouldnotalterthepaybacksignificantlycomparedtosolarPValone.However,thisalsoimpliesthatacustomerwouldbeambivalenttoinstallingaBESSwithitssolarPVsystem,unlessnetmeteringpolicychangesinthefuture.Ifnetmeteringisreplacedwithotherpolicies,thedeploymentofBESSaspartofasolarPVsystemmaybecomefinanciallyviablebutwilldependontherulesaroundthealternativeratestructures.
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BLACK & VEATCH | Executive Summary 1‐7
Asnotedpreviously,electricity‐onlyapplicationsforfuelcellsandmicroturbinesarenotfinanciallyviableinalmostallcases.Thesetechnologiescouldbeconfiguredtoprovidecombinedheat‐and‐powertohelpwiththefinancialsofthesystems.WhileCHPmayimprovethesetechnologies’financialsoverelectricity‐onlyoperation,CHPapplicationsarelimitedtospecificcustomersthatcanutilizeboththeenergyandheat.AdditionalstudiesexaminingspecificcustomerloadwouldbeneededtoassessthepotentialoffuelcellsandmicroturbinesforCHPapplications.
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BLACK & VEATCH | Introduction 2‐1
2.0 Introduction Black&VeatchwascommissionedbyPortlandGeneralElectric(PGE)toassessthepotentialdeploymentofsolarandotherdistributedgeneration(DG)technologies,giventechnical,financialandotherachievabilitycriteria.Thisreportexaminesthepotentialofthreeclassesofnon‐solarDGforelectricity‐onlyapplications:batteryenergystoragesystems(BESS),fuelcells,andmicroturbines.Theassessmentcoveredvarioustechnologieswithineachclassthataremostpracticalforbehind‐the‐meter,customer‐sitedapplicationsforcommercialcustomers.Thesetechnologiesincludethefollowing:
1. BatteryEnergyStorageSystems(BESS)
a. Lithiumion
b. Vanadiumredoxflowbattery
2. FuelCells(NaturalGas)
a. Solidoxidefuelcells(SOFC)
b. Moltencarbonatefuelcells(MCFC)
c. Phosphoricacidfuelcells(PAFC)
3. Microturbines(NaturalGas)
Whilethereareothertechnologiesthatexist,theywerenotincludedbecauseeithertheyarenotsuitableforstationaryapplicationsortheyarestillinrelativelyearlystagesofcommercialization.Black&Veatchalsofocusedonthepotentialforusingnaturalgasasthefuelinput,asbiogasutilizationwouldbehighlysite‐specificandwouldposeadditionalissuesaroundmaintenanceforthesetechnologies.Combinedheatandpower(CHP)applicationswerenotincludedinthescopeofthisstudy,astheyrequirecustomerandsitespecificevaluations.
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BLACK & VEATCH | Technical Characteristics and Costs 3‐1
3.0 Technical Characteristics and Costs ThissectioncoversthetechnicalcharacteristicsofthevariousDGtechnologiesthatwerereviewedandtheirtypicaloperatingmodes.CurrentestimatedcostsarealsopresentedforeachoftheDGtechnologiesbasedonBlack&Veatch’sengineering,procurement,andconstruction(EPC)experience,industrysurveys,and/orinstalledcostdatafrompubliclyavailablesources.Sincemanyofthesetechnologiesdonothavealargeinstalledbase,thenumberofdatapointsmaybelimited.
3.1 BATTERY ENERGY STORAGE SYSTEMS BESSarebecomingamoreprevalentgridresourceoptioninrecentyearsastheneedformoreflexiblecapacityisemerging,bothatthetransmissionaswellasthedistributionlevel.Newpoliciesinanumberofstates,suchasCalifornia,NewYork,andHawaii,aredrivinggrowthinthissectorthroughincentivesorstaterequirements.Companies,suchasTesla,anelectricvehiclecompany,areseekingwaystomassproducebatteriesinordertodrivecostsdownforbothtransportationandstationaryapplications.ThissectioncoversthetechnicalcharacteristicsandcostsassociatedwiththeBESStechnologiesthatwerereviewed,currentcosts,andforecastedcosts.
Sincethefocusofthisreportisonbehind‐the‐meter,stationarycustomerapplications,lithiumionandvanadiumredoxflowbatteriesaretwopracticaltechnologiestoconsiderforstationaryenergystorage.
3.1.1 Technical Characteristics
Althoughitisnotagenerationresource,energystoragecanperformmanyofthesameapplicationsasatraditionalgeneratorbyusingstoredenergyfromthegridorfromotherdistributedgenerationresources.Theseapplicationsrangefromtraditionalusessuchasprovidingcapacityorancillaryservicestomoreuniqueapplicationssuchasmicrogridsorrenewableintegrationapplications.AsnapshotofvariousenergystorageapplicationsacrosstheelectricutilitysystemcanbefoundonFigure3‐1.
Figure 3‐1 Energy Storage Applications Across the Electric Utility System
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BLACK & VEATCH | Technical Characteristics and Costs 3‐2
Generallyspeaking,energystoragecanserveanumberofroles:
TimeofUse(TOU)EnergyManagement(ElectricalEnergyTime‐Shift):Energystoragecanchargeenergywhenelectricitypricesarelowanddischargetosupplyloadwhenelectricitypricesarehigh.
DemandChargeManagement:Energystoragecandischargeduringexpensivepeakdemandtimestoreduceacustomer’smonthlydemandcharges.
ElectricServiceReliability:Energystoragecanimprovethereliabilityofacustomer’selectricserviceandhelpreducethenumberofoutagesforcustomers.Thisapplicationcanincludeemergencybackuppower.
PowerQuality:Energystoragecanprotectloadsagainstshortdurationevents(i.e.,voltageflickers,frequencydeviations)thataffectthequalityofpowerdeliveredtotheload.
FrequencyRegulation:Energystoragecanbeusedtomitigateloadandgenerationimbalancesonthesecondtominuteintervaltomaintaingridfrequency.
VoltageSupport:Theenergystorageconvertercanprovidereactivepowerforvoltagesupportandrespondtovoltagecontrolsignalsfromthegrid.
VariableEnergyResourceCapacityFirming:Energystoragecanbeusedtofirmenergygenerationofavariableenergyresourcesothatoutputreachesaspecifiedlevelatcertaintimesoftheday.
VariableEnergyResourceRampRateControl:Rampratecontrolcanbeusedtolimittheramprateofavariableenergyresourcetolimittheimpacttothegrid.
Energystorageapplicationscanbegroupedintoeitherpowerorenergyapplications.Powerapplicationsaregenerallyshorterduration(approximately30minutesto1hour)applicationsthatmayinvolvefrequentrapidresponsesorcycles.Frequencyregulationorotherrenewableintegrationapplicationssuchasrampratecontrol/smoothingaregoodexamplesofpowerapplications.Energyapplicationsgenerallyrequirelongerduration(approximately2hoursormore)energystoragesystems.
Forthepurposesofthisreport,Black&Veatchfocusedoncustomer‐sitedstoragethatisconnectedbehindtheelectricitymeterforcommercialandindustrialcustomers(alsocalledbehind‐the‐meterenergystorage).Theapplicationsspecificallyrelatedtobehind‐the‐meterenergystorageareasubsetofallthepotentialapplicationsstoragesystemscanperform.
TheprimarypurposeoftheenergystoragedevicesconsideredinthisreportwouldbetoprovideTOUenergymanagementanddemandchargemanagement,whichwouldbeprimarilyanenergyapplication.TOUenergymanagementanddemandchargemanagementtogethercanbecalledend‐userbillmanagementapplications.Whilethestoragesystemsareversatileandcanperformotherapplications,theend‐userbillmanagementapplicationsarethemostcommonapplicationsperformedbybehind‐the‐meterenergystoragesystemsseentoday.Thisisbecauseavoidingexpensivedemandcharges(thatcanvarybyregionandutility)canprovidereasonablevaluetothecustomer.Moredetailedanalysisonend‐userbillmanagementcanbefoundinlatersectionsofthisreport.Theotherapplicationscanbeperformedbybehind‐the‐meterenergystorage,butoftenvaluingtheseparticularapplicationsisdifficultandishighlysiteandmarket‐specific.
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BLACK & VEATCH | Technical Characteristics and Costs 3‐3
AfullyoperationalBESScomprisesanenergystoragesystemthatiscombinedwithabidirectionalconverter(alsocalledapowerconversionsystem).TheBESSalsocontainsabatterymanagementsystem(BMS)andsiteorBESScontroller(Table3‐1).
Table 3‐1 BESS Components
COMPONENT DEFINITION
EnergyStorageSystem(ESS)
TheESSconsistsofthebatterymodulesorcomponentsaswellastheracking,mechanicalcomponents,andelectricalconnectionsbetweenthevariouscomponents.
PowerConversionSystem(PCS)
ThePCSisabidirectionalconverterthatconvertsalternatingcurrent(ac)todirectcurrent(dc)anddctoac.ThePCSalsocommunicateswiththeBMSandBESScontroller.
BatteryManagementSystem(BMS)
TheBMScanbecomposedofvariousBMSunitsatthecell,module,andsystemlevel.TheBMSmonitorsandmanagesthebatterystateofchange(SOC)andchargeanddischargeoftheESS.
BESS/SiteController TheBESScontrollercommunicateswithallthecomponentsandisalsotheutilitycommunicationinterface.MostoftheadvancedalgorithmsandcontroloftheBESSresidesintheBESS/sitecontroller.
Whenconsideringdifferentenergystoragetechnologies,thereareanumberofkeyperformanceparameterstounderstand:
PowerRating:Theratedpoweroutput(MW)oftheentireenergystoragesystem.
EnergyRating:Theenergystoragecapacity(MWh)oftheentireenergystoragesystem.
DischargeDuration:ThetypicaldurationthattheBESScandischargeatitspowerrating.
ResponseTime:HowquicklyanESScanreachitspowerrating(typicallyinmilliseconds).
Charge/DischargeRate(C‐rate):AmeasureoftherateatwhichtheESScancharge/dischargerelativetotherateatwhichitwillcompletelycharge/dischargethebatteryin1hour.A1hourcharge/dischargerateisa1Crate.Furthermore,a2Cratecompletelycharges/dischargestheESSin30minutes.
RoundTripEfficiency(RTE):TheamountofenergythatcanbedischargedfromanESSrelativetotheamountofenergythatwentintothebatteryduringcharging(asapercentage).TypicallystatedatthepointofinterconnectionandincludestheESS,PCS,andtransformerefficiencies.
DepthofDischarge(DoD):Theamountofenergydischargedasapercentageofitsoverallenergyrating.
StateofCharge(SOC):Theamountofenergyanenergystorageresourcehaschargedrelativetoitsenergyrating,notedasapercentage.
CycleLife:Thesearereportedat80percentand10percentofDoDandcorrelatetothenumberofcyclestheESScanundergobeforetheenergystoragesystemdegradesto80percentofitsinitialenergyrating(kWh).ThecyclelifecanvaryforvariousDoDs.
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Sincethefocusofthisreportisonbehind‐the‐meter,stationarycustomerapplications,lithiumionandvanadiumredoxflowbatteriesaretwopracticaltechnologiestoconsiderforstationaryenergystorage.Mostofthestationaryenergystorageactivityintheindustryiscurrentlybasedonthelithiumionbatterytechnology.Lithiumionbatteriesarethedominantplayerinbatteryenergystorage,andtheirdemonstratedexperienceisgrowing.AccordingtotheDepartmentofEnergy(DOE)GlobalEnergyStorageDatabase,over80MWoflithiumioninstallationsareoperationalintheUnitedStates.Lithiumionbatteriesareprojectedtobeamajorindustryplayerintheyearstocomeandarewellsuitedforbothpowerandcyclingapplicationsaswellassomeenergyapplications.
Vanadiumredoxflowbatteryinstallationsaremorelimited,butworldwideinstallationstotalover17MW,includinginstallationscurrentlybeingverified.1Vanadiumredoxflowbatteriesarealsoprojectedtolikelyhaveaconsiderablemarketshareforlargestationaryapplicationsinthefutureandarebestsuitedforenergyapplicationsthatrequirelongerdurationsofdischarge.
Abasicdescriptionofthesetwotechnologiesisprovidedinthefollowingsections.
3.1.1.1 Lithium Ion Batteries
Lithiumionbatteriesareaformofenergystoragewherealltheenergyisstoredelectrochemicallywithineachcell.Duringchargingordischarging,lithiumionsarecreatedandarethemechanismforchargetransferthroughtheelectrolyteofthebattery.Ingeneral,thesesystemsvaryfromvendortovendorbythecompositionofthecathodeortheanode.SomeexamplesofcathodeandanodecombinationsareshownonFigure3‐2.
Figure 3‐2 Lithium Ion Battery Showing Different Electrode Configurations
Thebatterycellsareintegratedtoproducemodules.Thesemodulesarethenstrungtogetherinseries/paralleltoachievetheappropriatepowerandenergyratingtobecoupledtothePCS.
1 DOE Global Energy Storage Database, http://www.energystorageexchange.org/.
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AnimageofanexamplelithiumionBESScanbefoundonFigure3‐3.
Figure 3‐3 Lithium Ion Battery Energy Storage System Located at Black & Veatch HQ
Lithiumionbatterystoragesystemscanbeusedforbothpowerandenergyapplications.Onekeystrengthoflithiumionbatteriesistheirstrongcyclelife(refertoTable3‐2).Forshallow,frequentcycles,whicharequitecommonforpowerapplications,lithiumionsystemsdemonstrateexcellentcycle‐lifecharacteristics.Additionally,lithiumionsystemsdemonstrategoodcycle‐lifecharacteristicsfordeeperdischargescommonforenergyapplications.Overall,thistechnologyoffersthefollowingbenefits:
ExcellentCycleLife:Lithiumiontechnologieshaveacyclingabilitysuperiortootherbatterytechnologiessuchasleadacid.
FastResponseTime:Lithiumiontechnologieshaveafastresponsetimethatistypicallylessthan100milliseconds.
HighRoundTripEfficiency:Lithiumionenergyconversionisefficientandhasuptoa90percentroundtripefficiency(dc‐dc).
Versatility:Lithiumionsolutionscanprovidemanyrelevantoperatingfunctions.
CommercialAvailability:Therearedozensoflithiumionbatterymanufacturers.
EnergyDensity:Lithiumionsolutionshaveahighenergydensitytomeetspaceconstraints.
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Table 3‐2 Typical Lithium Ion Battery Performance Parameters
PARAMETER LITHIUMIONBATTERY
Powerrating,MW 0.005to32
Energyrating,MWh 0.005to32
Dischargeduration,hours 0.25to4
Responsetime,milliseconds <100
Roundtripefficiency(ac‐ac),% 75to90
Cyclelife,cyclesat80%DoD 1,200to4,000
Cyclelife,cyclesat10%DoD 60,000to200,000
3.1.1.2 Vanadium Redox Flow Batteries
Vanadiumredoxflowbatteriesareanotherformofelectrochemicalstorage.Vanadiumredoxflowbatteriesarethemostcommerciallydevelopedtechnologyofthevariousflowbatterytechnologies.Inthistechnology,theenergyforthesesystemsisstoredwithinaliquidelectrolytethatistypicallystoredinlargetanks.Theelectrolytecanbescaledtoproducethedesiredenergystoragecapacity;thepowercells(wherethereactionshappen)canbescaledtoproducethedesiredpoweroutput.AdiagramofavanadiumredoxflowbatterycanbefoundonFigure3‐4.
Figure 3‐4 Diagram of Vanadium Redox Flow Battery (Source: DOE/Electric Power Research Institute [EPRI] 2013 Electricity Storage Handbook in Collaboration with National Rural Electric Cooperative Association [NRECA])
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ThistechnologyisalsointegratedwithaPCStoformtheoverallBESS.Vanadiumredoxbatteriesaremoretypicallyusedforenergyapplications,astheycanmoreeffectivelybescaledtolongerdischargeperiodsthanlithiumionbatteries.However,onedrawbackwithflowbatteriesisthespacerequirementsforthesesystems.Thevanadiumredoxflowbatteriesrequiremorespacefortheinstallationthanlithiumionbatteries.VanadiumredoxBESScanbemodular,asshownonFigure3‐5,andcontainerizedsystems,asshownonFigure3‐6.
Figure 3‐5 Vanadium Redox Flow Battery (Source: Prudent Energy brochure)
Figure 3‐6 Containerized Flow Battery (Source: UniEnergy)
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AcomparisonoflithiumionandflowbatterytechnologiesisprovidedinTable3‐3.Comparedtolithiumionbatteries,flowbatteriesarebettersuitedtoprovidinglongerdischargedurationsandhavealongercyclelifeat80percentofDoD.Ontheotherhand,vanadiumredoxflowbatteriessufferfromlowerroundtripefficiencies.Additionally,flowbatteriesdonotperformaswellatshallow10percentDoDcycles.Whiletheelectrolyteinflowbatteriesdoesnotdegrade,manufacturerinformationindicatesthatthepowercellcomponentofthebatterymayneedtobereplacedafter5to10years.
Table 3‐3 Vanadium Redox Flow Battery Versus Lithium Ion Battery
PARAMETER LITHIUMIONBATTERYVANADIUMREDOXFLOWBATTERY
Powerrating,MW 0.005to32 0.050to4
Energyrating,MWh 0.005to32 0.200to8
Dischargeduration,hours 0.25to4 3to8
Responsetime,milliseconds <100 <100
Roundtripefficiency,% 75to90 65to75
Cyclelife,cyclesat80%DoD 1,200to4,000 10,000to15,000(notDoDdependent)
Cyclelife,cyclesat10%DoD 60,000to200,000 10,000to15,000(notDoDdependent)
3.1.2 BESS Costs
Black&Veatchleverageditsexperienceintheenergystorageindustryanddeepvendorknowledgetoprovidehigh‐levelcostsforthetwotechnologiesofinterest.
Inadditiontothis,Black&VeatchreviewedSandiaNationalLaboratory’sreporttitled“DOE/EPRIElectricityStorageHandbookinCollaborationwithNRECA,”whichincludescostsgatheredthroughextensivesurveysofanumberofvendors.2Black&VeatchalsoreviewedtheDOEGlobalEnergyStorageDatabase,whichisacompilationofmanyexistingenergystorageprojects.3Furthermore,historicaldatafromtheCaliforniaSelf‐GenerationIncentiveProgram(SGIP)wasalsoreviewed.SGIPprogramdatashowcostshavedeclinedsignificantlysince2009‐2010buthavebeengenerallyflatbetween2011and2014(Figure3‐7).
2 DOE/EPRI 2013 Electricity Storage Handbook in Collaboration with NRECA, http://www.sandia.gov/ess/handbook.php. 3 DOE Global Energy Storage Database, http://www.energystorageexchange.org/.
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Figure 3‐7 California SGIP Historical Energy Storage Costs ($ per kWh) (Source: SGIP Database)
3.1.2.1 Current Energy Storage Costs
Reportedcostsofenergystoragesystemscanvarywidely,dependingonsizeanduniquesiteconditions,andareoftenreportedinconsistently.Costsmaybereportedforthebatteriesaloneorfortotalinstalledcost.Furthermore,installedcostsforBESSmaybereportedincostperkW(power)orcostperkWh(energy).Sincetheapplicationsconsideredinthisanalysisareprimarilyenergyapplications,costsarepresentedonadollarsperkWhbasis.
Currentreportedequipmentpricingforlithiumionbatteriesalonerangefrom$500to$750perkWhandtotalinstalledcostsrangingfrom$700to$3000perkWh,withsmallerbehind‐the‐metersystemsatthehigherend.4Vanadiumredoxflowbatteriesarefarmoreintegratedsystems,socostsaretypicallyreportedastotalinstalledcost.
Black&Veatchdevelopedarangeofinstalledcoststhatincludethefollowingcomponents:
Batterymodules.
PCS.
BMS.
Controller.
4 “The Value of Distributed Electricity Storage in Texas,” Brattle Group, 2014. http://www.brattle.com/system/news/pdfs/000/000/749/original/The_Value_of_Distributed_Electricity_Storage_in_Texas.pdf?1415631708.
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
2009 2010 2011 2012 2013 2014
SGIPInstalledCosts($perkWh)
Wtd.AverageCost
WtdAveCostAfterIncentives
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Balance‐of‐systems,includinginterconnectingelectricalequipment,racking,andwiring.
Engineeringanddesign,includingnecessarypermittingandconstructionmanagement.
Installation,includinglabor.
Contractormargin.
VarioussizesofenergystoragesystemsareshowninTable3‐4thatrepresentareasonablerangeofsizesforthestoragesystemsstudiedinthisreport.ThecostsarepresentedintermsofdollarsperinstalledkWhbasedontheenergystorageability,whichiswhatwillbeusedinthemodelingexercisepresentedlaterinthisstudy.
Table 3‐4 Energy Storage System Conceptual EPC Costs for 2015 (2014$)
TECHNOLOGYPOWER,KW
ENERGY,KWH
INSTALLEDCOST,$/KWH
FIXEDO&M,$/KW‐YR
VARIABLEO&M,$/KWH
Lithiumionbattery
5 10 1,500–2,000 20‐25 0.0010–0.0015
100 400 1,250–1,750 20–25 0.0010–0.0015
1,000 4,000 1,000–1,300 8–10 0.0010–0.0015
Vanadiumredoxflowbattery
200 700 1,400–1,600 15‐20 0.0015–0.0020
1,200 4,000 900–1,100 7‐9 0.0015–0.0020
Fixedandvariableoperationsandmaintenance(O&M)costsforlithiumionandflowbatteriesarealsopresentedinTable3‐4.FixedO&Mincludesroutinemaintenanceontheequipmentandelectronics,andvariableO&Mdependsonhowmuchthestoragesystemisusedthroughoutthecourseofitsoperation.SincetheO&Misdependentontheexpectedoperation,theoperationofthesesystemsisassumedtobeonefullchargeanddischargedailyfor365daysoftheyear.Thisisareasonableassumptionfortheexpectedapplicationsconsideredinthisreport.TheO&Mcostsdonotincludebatteryreplacementsorcomponentreplacementsovertime.Furthermore,thenumberofcyclesinoperationwilldeterminetheiroveralllife,whichisestimatedtobeapproximately10yearsifcycleddaily,andproportionatelylongerifthesystemisnotcycleddaily.
3.1.2.2 Forecasted Energy Storage Costs
Basedonindustryworkshops,theDOEhasestablishedgoalsofreducingtheinstalledsystemcapitalcostforBESSinthenear‐term(by2019)to$250perkWh.5Additionally,theDOEhasalongerterm2024goalof$150perkWh.Otherindustryreportsprojectbattery‐alonecoststodropto$100to$250perkWhinthenear‐term(5to10years)andtotalinstalledcoststobeaslowas$350perkWhby2020,whichismorereasonablethantheDOEgoals.Inallcases,thesecostsareforlargerutility‐scaleinstallations.
Forsmaller‐scalesystemsbeingconsideredforbehind‐the‐meterapplications,Black&VeatchbelievesthesetargetsareoverlyoptimisticforcompleteBESSinstallations.Therefore,forthe
5 Grid Energy Storage, U.S. Department of Energy, December 2013 (http://energy.gov/oe/downloads/grid‐energy‐storage‐december‐2013).
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10yearhorizon,Black&Veatchexpectsatotalinstalledcosttobemoreintherangeof$400to$500perkWhin2014$andthencoststodeclinemoreslowlybeyondthattimeframe.
3.2 FUEL CELLS Fuelcellsconverthydrogendirectlytoelectricitythroughanelectrochemicalreaction,asshownonFigure3‐8.Hydrogen‐richfuelssuchasnaturalgasordigestergasmaybetransformedintohydrogeninaprocesscalledreformingpriortouseincertaintypesoffuelcells.Fuelcelltechnologieshaveanumberofoperationaladvantagesincludingrelativelyhighconversionefficiency(i.e.,greaterthan40percent),lowemissions,andquietoperation.Utilizationofheatrecoveryforcombinedheatandpoweroperationscanincreasetheoverallefficiencytomorethan80percent.However,fuelcellscurrentlysufferfromanumberofshortcomingsincludinghighcapitalcost,shortfuelcellstacklifeof3to5years(whichincreasesO&Mcosts),andcorrosionandbreakdownofcellcomponents,resultinginperformancedegradationovertime.Duetothelongstartuptimesforfuelcells,theyalsooperatemostlyasbaseloadgenerationandcannotbedispatchedtofollowload.
Figure 3‐8 Schematic of a Hydrogen‐Fueled Fuel Cell (Source: www.fuelcelltoday.com)
Thediscussioninthissectionfocusesonstationaryfuelcellsforelectricity‐onlyapplications.Thetechnologiesthatarereviewedinclude:
SOFC
MCFC
PAFC
Onlyahandfulofmanufacturerssupplythesetechnologies,sothekeysuppliersarediscussedinthissection.Itisimportanttonotethatnoneofthefuelcellsuppliersareprofitabletoday,andaswillbeshowninthecostdiscussion,fuelcellcostshavenotshownanydeclineinthepast10years.
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3.2.1 Technical Characteristics
Fuelcellsarecomposedoftwoelectrodesseparatedbyanelectrolyte.Thespecificreactionsthatoccurattheelectrodedependonthetypeofelectrolyteemployedwithinthefuelcell.However,ingeneral,ionsarecreatedateithertheanodeorcathode,thenpassthroughtheelectrolyte;simultaneously,electronsflowbetweentheelectrodesthroughanexternalcircuit,producinganelectricalcurrent.Catalystsareoftenemployedtospeedupthereactionsattheelectrodes.
Therearesixprominenttypesoffuelcells,typicallydistinguishedbythematerialthatservesastheelectrolytewithinthefuelcell:
SOFC
MCFC
PAFC
Protonexchangemembranefuelcells(PEMFC)
Directmethanolfuelcells(DMFC)
Alkalinefuelcells(AFC)
DistinguishingfeaturesforthesetechnologiesarelistedinTable3‐5.
Table 3‐5 Distinguishing Features of Fuel Cell Technologies
FUELCELLTECHNOLOGY ELECTROLYTE
ELECTRODECATALYST
MOBILEION
OPERATINGTEMPERATURE(°C)
POTENTIALFUELS
PEMFC Water‐based,acidicpolymermembrane
Platinum H+ <100 Hydrogen
DMFC Polymermembrane Platinum‐Ruthenium
H+ 60to130 Methanol
AFC Potassiumhydroxideinwater
Nickel OH‐ 70to100 Hydrogen
PAFC Phosphoricacidinsiliconcarbidestructure
Platinum H+ 180 Hydrogen
MCFC Liquidcarbonatesaltsuspendedinporousceramic
None CO32‐ 650 Hydrogen,naturalgas,biogas
SOFC Solidceramic(e.g.,zirconiumoxide/yttriumoxide)
None O2‐ 800to1,000 Hydrogen,naturalgas,biogas
Source:FuelCellToday(www.fuelcelltoday.com).
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AsshowninTable3‐5,PEMFCandDMFCtechnologiesaretypicallyemployedforportableandtransportationapplications,whileMCFC,PAFC,andSOFCtechnologiesareemployedforbehind‐the‐meter,stationarypowergenerationapplications.WhiletherearesomecasesofPEMFCusedinstationaryapplications,thetechnologyrequiresverypurehydrogentominimizecontamination,whichwouldbechallengingforcustomer‐sitedprojects.Therefore,intheremainderofthisdiscussionregardingfuelcells,Black&VeatchhasfocusedonMCFC,PAFC,andSOFCtechnologies.NotethatMCFCandSOFCtechnologiesarealsomorepracticalforstationaryapplicationsbecausetheyareabletousenaturalgasdirectlyastheinputfuel,ratherthanhydrogen.
Table 3‐6 Typical Applications for Fuel Cells
PORTABLE
APPLICATIONSSTATIONARYAPPLICATIONS
TRANSPORTATIONAPPLICATIONS
TypicalPowerRange,kW 0.005to20 0.5to400 1to100
PotentialFuelCellTechnology PEMFCDMFC
MCFCPAFCSOFC
PEMFCDMFC
Examples Personalelectronics;militaryapplications
Powergeneration;uninterruptedpower
supplies(UPS)
Materialhandlingvehicles;automobiles,trucks,andbuses
Source:FuelCellToday,FuelCellIndustryReview2013.
Hydrogen‐richfuelssuchasnaturalgasordigestergasmaybetransformedintohydrogeninaprocesscalledreforming.Acommonmethodofreformingintroducessteamtothefuelstream;thechemicalformulaofthisreformingreactionfornaturalgascomposedprimarilyofmethane(CH4)isasfollows:
CH4+2H2O=>CO2+4H2
MCFCandSOFCtechnologiesoperateathightemperatures(650°Candhigher)and,therefore,areabletoreformgaseousfuelsinternally.Lowertemperaturefuelcells,suchasPAFC,requireanexternalreformer,whichaddstothesystemcost.Whenfuelgases(e.g.,naturalgasordigestergas)areused,certainconstituentsinthefuelgas(e.g.,moisture,hydrogensulfide(H2S),andsiloxanes)mustberemovedbeforethegasisusedinfuelcellstoavoiddamagetointernalcomponentsofthefuelcells.
Afterreforming,hydrogenissuppliedtothefuelcellstack.A“stack”isagroupoffuelcells(eachconsistingofananodeandacathodeseparatedbyanion‐conductingelectrolyte)thatareconnectedinserieswithinthefuelcellmodule.Thenumberoffuelcellsinthestackdeterminesthetotalvoltage,andthesurfaceareaofeachcelldeterminesthetotalcurrent.Multiplyingthevoltagebythecurrentyieldsthetotalelectricalpowergenerated.Theelectricityproducedisintheformofdc,whichisconvertedtoacbyaninverter.
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Thisoverallprocess,includingthereformationofnaturalgasandgenerationofelectricity,isillustratedonFigure3‐9.
Figure 3‐9 Fuel Cell Flow Diagram
Operationaladvantagesoffuelcelltechnologiesincludehighefficiency(i.e.,greaterthan40percent),lowemissions,andquietoperation.Thehigherefficienciesareachievablebecausethefuelcellprocessdoesnotinvolvecombustionandis,therefore,notlimitedbyCarnotcycleefficiency.Inaddition,fuelcellscansustainhighefficiencyoperationsevenunderpartialloadconditions(generallyconstantabove60percentofmaximumload).Utilizationofheatrecoveryforcombinedheatandpower(CHP)operationscanincreasetheoverallefficiencytomorethan80percent.Asaresultofthesehighoperatingefficienciesandthelackofcombustion,fuelcellsemitfewergreenhousegasesperunitofpowergeneratedthanotherDGtechnologiessuchasinternalcombustionenginesandmicroturbines.Thecombustion‐freeprocessalsoproducesfewerbyproductsthantheotheralternatives,whichreducescriteriaairpollutantemissions(notablynitrogenoxides[NOx]andsulfuroxides[SOx]).
Disadvantagesoffuelcellsvarybytype.Highcapitalcost,longstartuptime,ashortfuelcellstacklifeof3to5years(whichincreasesO&Mcosts),lowpowerdensity,andperformancedegradationovertimeresultingfromcorrosionandbreakdownofcellcomponentsaretheprimarydisadvantagesoffuelcellsystemsandarethefocusofresearchanddevelopment.
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Dependingonthetypeoffuelcellemployedandthenatureofthefuelgas,fuelcellsrequiremaintenance,includingthefollowing:
Replacingthecontaminantadsorbentsinthepretreatmentmoduletwotofourtimesannually.
Conductinganannualshutdownforreplacementoffiltersandforservicingothercomponentssuchasblowers.
Replacingfuelcellstacksevery3to10years,dependingonthetype.
Overhaulingthefuelprocessorafter5to10yearsofuse.
3.2.1.1 Solid Oxide
SOFCutilizeasolid,nonporousceramicmetaloxideelectrolyte,typicallyYttriaStabilizedZirconia(YSZ).SOFCoperateatrelativelyhightemperatures(500to1000°C)andcanachieveelectricalefficienciesintherangeof60percent.Whenusedonlargerscales,theexpelledheatcanbeutilizedtogenerateadditionalenergy.TheresultingCHPefficiencymaybebetween70and80percent.
Thehigheroperatingtemperaturesallowforinternalreformingofawiderangeoffuels,includingnaturalgasandotherhydrocarbonrenewableandfossilfuels,withouttheuseofareformingcatalyst.Theabsenceofacatalysteliminatestheneedforpreciousmetals(suchasplatinumgroupmetals)intheirconstruction.Conversely,thehigheroperatingtemperaturespresentengineeringanddesignchallenges.Todate,SOFCoperationallifeisusuallylimitedtoapproximately25,000hoursbecauseofdurabilityissuesassociatedwiththematerialtolerancestotemperature,particularlywhenusedinacyclicalapplication.Becauseoftheshorterlifespan,cellreplacementisnecessaryonamorefrequentbasisandO&McostsassociatedwithSOFCareestimatedtobehigh,approximately$1000/kW‐yr,basedonreportedextendedwarrantycosts.6
CurrentSOFCdevelopmenteffortsarefocusedonreducingoperatingtemperaturesthroughtheuseofadifferentorimprovedelectrolyteandelectrodes,whilemaintaininghighefficiency.Loweroperatingtemperaturesshouldprovideextendedoperationallifeandallowtheuseoflessexpensivematerialsinthestackconstructionandelectricalinterconnections.SuchachievementscouldeffectivelyreducebothcapitalandO&Mcosts.
SOFC Technology Supplier: Bloom Energy
BloomEnergy,basedinSunnyvale,California,providesmodularSOFCsystemsforelectricity‐onlyapplications.Thecompanywasfoundedin2001,growingfromtheworkofcompanyfounderDr.K.R.SridharfortheNationalAeronauticsandSpaceAdministration(NASA)Marsprogram.BloomacknowledgesthechallengesassociatedwithSOFCandclaimstohavesolvedthosechallengeswithbreakthroughsinmaterialscienceandsystemdesign.BloomEnergy’sproductsarenamed“EnergyServers”andareavailableatnameplatecapacitiesof210and262.5kW(modelsES‐5700andES‐5710,respectively).
UnderCalifornia’sSGIPprogram,Bloomsystemshaveaccountedforover100MWofcapacityinthestatesince2007,withindividualsystemsranginginsizefrom210kWto4.2MW.BloomhassupplieditssystemstoseveralFortune500companies,banks,anddatacenters.InJuly2014
6 GreenTech Media, “Stat of the Day: Fuel Cell Costs From Bloom and UTC” May 13, 2013. Available online at: http://www.greentechmedia.com/articles/read/Stat‐of‐the‐Day‐Fuel‐Cell‐Costs‐From‐Bloom‐and‐UTC.
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BloompartneredwithExcelontodevelop21MWoffuelcellprojectstosupplypowertocustomersthroughouttheUnitedStates.
PerformancecharacteristicsoftheBloomEnergyServersareshowninTable3‐7.
Table 3‐7 Performance Characteristics of Bloom Energy Fuel Cell Systems
BLOOMENERGY:ES‐
5700BLOOMENERGY:ES‐
5710
UnitRatings
GrossPowerOutput,kW 210 262.5
OutputVoltage,V 480 480
OperatingParameters
SystemEfficiency(1)
HeatRate(HHV),Btu/kWh 6,925‐7,990 6,925‐7,990
ElectricalEfficiency(HHVnetAC),% 47‐54 47‐54
EmissionRates
CarbonDioxide,lb/MWh 735‐849 735‐849
NitrogenOxides,lb/MWh <0.01 <0.01
SulfurOxides,lb/MWh Negligible Negligible
VolatileOrganicCompounds(VOCs) <0.02 <0.02
CarbonMonoxide,lb/MWh <0.10 <0.10
ParticulateMatter(PM10),lb/MWh NA NA
Source:BloomEnergyNotes:
1. Heatrateandelectricalefficiencyareestimatedoverprojectlife.
3.2.1.2 Molten Carbonate
MCFCoperateattemperaturesnear650°C,providingbalancebetweentheelectrolyteconductivityandatemperaturerangesuitableforlowercostmetals.TheelectrolyteinanMCFCisamoltencarbonatesaltmixture,suspendedinaporousceramic.Thehigheroperatingtemperaturesallowforinternalreformingofarangeoffuels,includingnaturalgasandcoalsyngas.MCFCachieveelectricalefficienciesintherangeof45to50percent.Often,MCFCsaredeployedinCHPapplications,whereevenfurtherenergyrecoveryfromthesystemisaccomplished,achievingupwardsof85percentoverallenergyefficiency.ModerncommercialMCFCstackshavelifespansestimatedaround40,000hours,withO&Mcostsofapproximately$300/kW‐yr.
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TheuseofnonpreciousmetalsandtheabilitytointernallyreformthefuelbothreducethecostofMCFC.WhileMCFCruncoolerthanSOFC,thehighoperatingtemperaturesstillleadtosomedurabilitychallengesandreducedoperatinglifespan.InthecaseoftheMCFC,thecorrosivepropertyoftheelectrolytehasbeenseentofurtherdecreasecelllife.Currentresearchanddevelopment(R&D)effortsinthefieldofMCFCarefocusedonincreasedcellandstacklifethroughelectrolyteadvancesandtheuseofmorerobustelectrodematerials.
MCFC Technology Supplier: FuelCell Energy
FuelCellEnergy,originallyfoundedin1969asEnergyResearchCorporation,hasbeenproducingMCFCsincethe1980s,withthefirstcommercialplantinstalledin2003utilizingits250kWstack.Thecompany’sproductionfacilityislocatedinTorrington,Connecticut,and,asof2012,itproduces56MWofMCFCannually.In2013,thecompanyinstalleda59MWfacilityinSouthKorea,currentlythelargestfuelcellplantintheworld.Accordingtothecompany’swebsite,FuelCellEnergyhas“morethan300MWofpowergenerationcapacityinstalledorinbacklog,”andthecompany’spowergenerationfacilitieshavegeneratedmorethan2.5billionkilowatt‐hoursofelectricity.
FuelCellEnergyprovidesthreeproductsinitsDirectFuelCell(DFC)line:the2.8MWDFC3000,the1.4MWDFC1500,andthe300kWDFC300.Thecompanyalsoprovidesits“Multi‐MWDFC‐ERG”(DirectFuelCellEnergyRecoveryGeneration)system,whichcouplesagasexpansionturbineutilizingthenaturalgaspipelinepressuretodrivetheturbinepriortosupplyingthefuelcells.Inthisconfiguration,thesystemincreasesitselectricalefficiencyfrom43percent(HHV,DFC3000andDFC1500)to55percentorhigher.
PerformancecharacteristicsofFuelCellEnergysystemsarelistedinTable3‐8.
3.2.1.3 Phosphoric Acid (PAFC)
PAFCisalong‐establishedfuelcelltechnologywithmanyyearsofdevelopmentandoperationalhistory.Thistypeoffuelcellutilizesaliquidphosphoricacidelectrolyteandcarbonpaperanodeswithaplatinum‐basedcatalyst.PAFChaveanelectricalefficiencyof40to50percent,thoughtheyaretypicallyutilizedinCHPapplications,accomplishingacombinedelectricalandthermalefficiencyashighas80to90percent.Duetorelativelylowoperatingtemperatures,around200°C,cellcorrosionanddegradationislimited,andPAFChavedemonstratedlongoperatinglifespansashighas80,000hours.However,theuseofexpensivecatalystmaterialandstackdesignresultsinarelativelyhighcostforthistechnology.
CurrentPAFCdevelopmenteffortsarefocusedonincreasedcatalystperformanceandlowercostmaterials.Bothofthesegoalswouldleadtolowercostsona$/kWbasisforPAFCsystems.Currently,commercialPAFCsystemsoperateonlifespansaround60,000hours.DuetothelongerstacklifecomparedtoMCFCandSOFC,O&McostsforcommercialPAFCsystemsareestimatedtobeapproximately$150/kW‐yr.
PAFC Technology Supplier: Doosan Fuel Cell America, Inc.
DoosanFuelCell,basedinSouthWindsor,Connecticut,isawell‐establishedcommercialproviderofPAFCsystems.DoosanacquiredClearEdgePower,afteritfiledforbankruptcy,anditsPureCellfuelcellinJuly2014.Priortothat,ClearEdgehadpurchasedUTCPowerin2013;UTCwasoriginallyfoundedin1958andprovidedfuelcellstoearlyNASAmissions.
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BLACK & VEATCH | Technical Characteristics and Costs 3‐18
Table 3‐8 Performance Characteristics of FuelCell Energy Fuel Cell Systems
FUELCELLENERGY:
DFC3000FUELCELLENERGY:
DFC1500
UnitRatings
GrossPowerOutput,kW 300 1,400
OutputVoltage,V 480 480
OperatingParameters
FuelandWaterConsumption/Discharge
NaturalGasConsumption,scfm 39 181
NaturalGasConsumption(1),MMBtu/h(HHV) 2.39 11.1
WaterConsumption(average),gpm 0.9 4.5
WaterDischarge(average),gpm 0.45 2.25
SystemEfficiency(2)
HeatRate(HHV),Btu/kWh 7,950 7,950
ElectricalEfficiency,% 43 43
EmissionRates
CarbonDioxide(electricityonly),lb/MWh 980 980
NitrogenOxides,lb/MWh 0.01 0.01
SulfurOxides,lb/MWh 0.001 0.0001
ParticulateMatter(PM10),lb/MWh 0.00002 0.00002
Source:FuelCellEnergyNotes:
1. AssumesHHVofnaturalgasof1,023Britishthermalunitperstandardcubicfoot(Btu/scf).2. Systemefficiencyassumeselectricity‐onlyoperation(i.e.,nowasteheatrecoveryorCHP
operation).scmf‐standardcubicfeetperminuteMMBtu/h‐millionBritishthermalunitsperhourgpm‐gallonsperminute
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BLACK & VEATCH | Technical Characteristics and Costs 3‐19
ThePureCellModel400isa400kWPAFCsystemconsistingofafuelreformer,thePAFCstack,andapowerconditionertosupplyACpower.Processheatisalsoavailableand,whencombinedwithelectricitygeneration,thePureCellachievesanoverallefficiencyof90percent.ThePureCellismarketedtowardandutilizedprimarilyinCHPapplicationstomaximizethesystem’stotalenergyproduct.DoosanstatesthatthePureCellproductlinehasover11millionfleetoperatinghours,withtheModel400(introducedin2012)recentlysurpassing1millionfleetoperatinghours.
PerformancecharacteristicsofthePureCellareshowninTable3‐9.
Table 3‐9 Performance Characteristics of Doosan PureCell Model 400
PURECELLMODEL400
UnitRatings
GrossPowerOutput,kW 400
OutputVoltage,V 480
OperatingParameters(1)
FuelandWaterConsumption/Discharge
NaturalGasConsumption,scfm 58.6
NaturalGasConsumption,MMBtu/h(HHV) 3.6
WaterConsumption(average),gpm None
WaterDischarge(average),gpm None
SystemEfficiency(2,3)
HeatRate(HHV),Btu/kWh 9,000
ElectricalEfficiency,% 42
EmissionRates(4)
CarbonDioxide(electricityonly),lb/MWh 1,049
NitrogenOxides,lb/MWh 0.01
SulfurOxides,lb/MWh Negligible
ParticulateMatter(PM10),lb/MWh Negligible
Source:DoosanFuelCellNotes:1. Averageperformanceduringfirstyearofoperation.2. AssumesHHVofnaturalgasof1,025Btu/scf.3. Systemefficiencyassumeselectricity‐onlyoperation(i.e.,nowasteheatrecovery
orCHPoperation).4. Performanceandemissionsbasedon400kWoperation.
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BLACK & VEATCH | Technical Characteristics and Costs 3‐20
3.2.2 Fuel Cell Costs
Uponreviewingvarioussourcesofdataforfuelcellcosts,Black&VeatchdeterminedthatthebestsourceofcurrentfuelcellcostscomefromtheSelf‐GenerationIncentiveProgram(SGIP)offeredbythestateofCalifornia,whichhasfundedasignificantportionofthefuelcellinstallationsintheUnitedStates.
Figure3‐10illustrateshistoricalSGIPdataonfuelcellcostscompiledbytheNREL.7Thecostdatahavebeennormalizedforallyearsto2010dollars.Thisfigureshowsthattheinstalledcostoffuelcellsincreased(in2010dollars)overtheperiodfrom2003to2013,whichwouldseemtoindicatethateconomiesofscalehavenotyetbeenachievedbyanyofthefuelcelltechnologiesdescribedpreviously.Thistrendappearedinallsizecategories(i.e.,lessthan500kW,500to1,000kW,andgreaterthan1,000kW).
Figure 3‐10 Stationary Fuel Cell Installed Cost (with and without incentives) – 2003 to 2013 (Source: NREL)
7 Wilpe, et al. “Evaluation of Stationary Fuel Cell Deployments, Costs and Fuels,” 2013 Fuel Cell Seminar and Energy Exposition, Columbus, Ohio, October 23, 2013.
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BLACK & VEATCH | Technical Characteristics and Costs 3‐21
3.2.2.1 Current Costs
TheCaliforniaPublicUtilitiesCommission(CPUC)publisheseligibleprojectscostsinformationbyproject.8Eligiblecostsincludeavarietyofprojectcosts:engineeringcosts,permittingcosts,costofequipmentandinstallation,andinterconnectioncosts.
WithintheSGIPdatabase,thereare143fuelcellprojectsthatappliedforSGIPfundingin2012,2013,and2014.9Thevastmajorityofthese2012to2014projects(i.e.,130projects)areelectricity‐onlyprojectsemployingfuelcellssuppliedbyBloom.TheremainderoftheseprojectsareCHPprojectsemployingfuelcellssuppliedbyDoosan(11projectsundertheClearEdgeandUTCbrandnames)orFuelCellEnergy(2projects).Capitalcostsfortheseprojects,basedonthetotaleligiblecostslistedintheSGIPdatabase,aresummarizedinTable3‐10.
Table 3‐10 Fuel Cell Projects Applying for SGIP Funding in 2012 to 2014
TECHNOLOGY SUPPLIER APPLICATIONNUMBEROFPROJECTS(1)
TOTALINSTALLEDCAPACITY(MW)
AVERAGEPROJECTSIZE(KW)
AVERAGEPROJECTCOST(2)($/KW)
SOFC Bloom Electricity‐only
130 52 400 12,000
PAFC(small‐scale)(3)
Doosan(4) CHP 6 0.18 30 17,400
PAFC(large‐scale)(3)
Doosan(4) CHP 5 4.0 800 9,200
MCFC FuelCellEnergy
CHP 2 2.8 1,400 6,200
Source:CPUC,SGIPQuarterlyProjectsReport(http://www.cpuc.ca.gov/PUC/energy/DistGen/sgip/).Notes:1. NumberofprojectsidentifiesprojectsthathaveappliedforSGIPfundingin2012,2013,and2014(excluding
projectswithstatusof“canceled”or“suspended.”)2. AverageprojectcostisbasedontotaleligiblecostslistedinSGIPdatabase.3. Becauseofsignificantvariationsinscales,PAFCprojectsaresplitintotwocategories:small‐scaleprojectsranging
insizefrom15to80kWandlarge‐scaleprojectsranginginsizefrom400to1,200kW.4. DoosanincludesprojectssuppliedbyUTCandClearEdge.
8 California Public Utility Commission, Self‐Generation Incentive Program, http://www.cpuc.ca.gov/PUC/energy/DistGen/sgip/. 9 This total excludes projects that have either been canceled or are currently suspended.
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BLACK & VEATCH | Technical Characteristics and Costs 3‐22
ForBloom’selectricity‐onlySOFCprojects,ratedcapacitiesoftheprojectsrangedfrom210kWto1,050kW,withmostprojectsreportingcostsbetween$11,000/kWand$13,000/kW.ProjectcostsforPAFCsystemsweresplitintotwocategories:smallerscale(i.e.,lessthan100kW)andlargerscale(i.e.,greaterthan400kW).TheseprojectsaredefinedasCHPprojectswithintheSGIPdatabase.Totaleligiblecostsforthesmallerscalecategoryaverage$17,400/kW,whiletotaleligiblecostsforthelargerscalecategoryaverage$9,200.
ProjectcostsforMCFCsystemsarebasedontwoprojectsidentifiedasCHPprojects.Theeligiblecostsforthesetwoprojects(eachratedat1,400kW)werereportedas$5,700/kWand$6,700/kW,respectively.
BasedontheinformationsummarizedinTable3‐10,thecapitalcostofSOFCsystemsaregreaterthanthoseofPAFCandMCFC.ThisistrueeventhoughtheSOFCsystemsprovideonlyelectricity,whilePAFCandMCFCprojectslistedintheSGIPdatabasehaveCHPapplications.
WhiletheSGIPdatarepresentinstalledsystemcosts,Black&Veatchconsidersthesevaluestobesomewhatinflatedinordertomaximizeinvestmenttaxcredit(ITC)payment.FuelcellsareeligibleforanITCpaymentof30percentofsystemcosts,upto$3,000/kW,effectivelyallowingthefull30percentcreditforsystemcostsupto$10,000/kW.Forexample,theSGIPdataforSOFCprojectsshowsystemcostsrangingfromapproximately$11,000/kWto$13,000/kW,whileBloom’spublishedsystemquotesarearound$8,000/kW10.Balance‐of‐systemcostsareacknowledgedtoaccountforsomeofthatgap.Furthercomplicatingtheestimationofactualfuelcellsystemcostsarestatementsfrommajorfuelcellsuppliers,includingBloomandFuelCellEnergy,implyingnegativeprofitabilitytodate.Thelackofcosttransparencyaddssignificantuncertaintytocurrentandforecastedfuelcellcostestimates.
3.2.2.2 Forecasted Costs
CurrentcapitalcostsgreatlyexceedtargetsforfuelcellsidentifiedbytheDOE,whichset2020targetsat$1,500/kWforoperationonnaturalgas.11
Severaltechnicalgapshavebeenidentifiedasareasforsignificantcostreductions,andrecenthistoricalcosttrendsindicatethatitwillrequireadramaticnear‐termreductionincostforfuelcellsupplierstoachieveDOEcosttargets.Althoughnotcommerciallyavailable,RedoxPower,aSOFCmanufacturerwhoiscurrentlyworkingtocommercializeitstechnologywithMicrosoftunderaDOEgrant,claimstohaveachievedabreakthroughdesign,loweringcoststoabout10percentofcurrentcommercialSOFCcosts12,13.SeveralothermanufacturersincludingToyota,Mitsubishi,andHondaarecurrentlydevelopingtheirownSOFCtechnologies.ThismarketmomentummayreducesystemcostsforSOFCand,inturn,drivedowncostsforMCFCandPAFC.Whilefuelcellcostforecastsareuncertain,andevencurrentcostsareconsideredtobevague(asdiscussedinSubsection3.2.2.1),Black&VeatchhasconcludedthatfuelcellsystemcostsreportedbySGIParesomewhatinflatedand,therefore,hasassumedforanalysispurposesthat2016costsareaboutone‐thirdlowerthanSGIPreports.Totestwhetheradramaticdropincostswouldbefinanciallyviable,Black&Veatchassumedthatthemarketgoalof$1500/kWwouldbemetforallfuelcell
10 http://www.seattle.gov/light/news/issues/irp/docs/dbg_538_app_i_5.pdf. 11 U.S. DOE, Fuel Cell Technologies Office Multi‐Year Research, Development, and Demonstration Plan (2012). 12 http://www.technologyreview.com/news/518516/an‐inexpensive‐fuel‐cell‐generator/. 13 http://www.dailytech.com/Microsofts+New+Fuel+Cell+Partner+is+Ready+to+Blow+Away+ the+Bloom+Box/article36118.htm.
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BLACK & VEATCH | Technical Characteristics and Costs 3‐23
technologiesby2035.Thiscostforecastisnotnecessarilysupportedbytherecenthistoricalmarkettrends;however,withoutasignificantcostreduction,thesetechnologieswillnotbefinanciallyfeasibleinDGapplicationssuchasthoseconsideredinthisassessment.
3.3 MICROTURBINES Microturbinesaresmallcombustionturbinesthatoperateatveryhighspeeds(i.e.,morethan40,000revolutionsperminute[rpm]andupto100,000rpm).Microturbines,asshownonFigure3‐11,aretypicallyratedatlessthan250kW,butmultipleunitscanbeinstalledinparallelforhighercapacity.Theyareavailableasmodularpackagedunitsthatincludethecombustor,theturbine,thegenerator,andthecoolingandheatrecoveryequipment.Becauseofthesmallsystemfootprints,microturbineunitsareattractiveforsmall‐tomedium‐sizedapplications.
3.3.1 Technical Characteristics
Figure 3‐11 Cut‐Away of Microturbine (left) and Typical Microturbine Installation (right) with Heat Recovery Module
Withinamicroturbine,thefuelgasiscompressedandmixedwithairinthecombustor;combustionofthefuel/airmixturegeneratesheatthatcausesthegasestoexpand.Theexpandinggasesdrivetheturbine,whichinturndrivesageneratorproducingelectricity.Heatfromtheturbineexhaustisrecoveredinarecuperatorandisusedtopreheatincomingcombustionair.Thishelpsimprovetheoveralloperatingefficiencyoftheunit.
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BLACK & VEATCH | Technical Characteristics and Costs 3‐24
Comparedtoreciprocatingenginesandengine‐drivenequipment,microturbineshavethefollowingoperatingcharacteristics:
Lowerefficiencies.
Loweremissions.
Greaterinletgaspressurerequirements(rangingfrom75to100poundspersquareinchgauge[psig]).
Greaterfuelgastreatmentrequirements(e.g.,H2Scontentmustbereducedtolessthan5000partspermillionvolumetric[ppmv]).
Thethermalefficiencyofmicroturbineunitsisintherangeof25to30percent(onalowerheatvalue[LHV]basis),dependingonthemanufacturer,ambientconditions,andtheneedforfuelcompression.Similartocombustionturbines,efficienciesarereducedtosomeextentwhenoperatingathigherambienttemperatures(asthemassflowofcombustionisreducedathigherambienttemperatures).
Microturbinesarebestoperatedcontinuouslyatfullloadasfrequentstart/stopcyclesincreasethefrequencyofperiodicmaintenanceandreduceavailability.Thesemachinescanoperateatpartialloads,althoughpart‐loadoperationnegativelyaffectsefficiency.Forexample,operationat50percentloadwouldresultinathermalefficiencyreductionto25percent(relativeto30percentefficiencyatfullload).
Capstone C65 System
Atpresent,therearetwoprimaryvendorsformicroturbinesystems:CapstoneTurbineCorporationandFlexEnergy.Forthepurposesofthischaracterization,Black&VeatchwillprovideinformationonCapstone’sC65system,whichhasaratedoutputof65kW.PerformanceofthismachineissummarizedinTable3‐11.
RegardingO&Mcosts,Capstoneoffersservicepackagesatvariouslevelsofservice(uptoandincludingcompletepartsandlaborforallmaintenanceactivities).Lumpsumfeesforthisservicearepaidonanannualbasis.TheannualfeeforthecompleteO&Mservicepackageisequivalenttoapproximately$170/kW‐yr.
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BLACK & VEATCH | Technical Characteristics and Costs 3‐25
Table 3‐11 Performance Characteristics of Capstone C65 Microturbine
CAPSTONEC65MICROTURBINE
UnitRatings
GrossPowerOutput,kW 65
OutputVoltage,V 480
OperatingParameters
FuelandWaterConsumption/Discharge
NaturalGasConsumption,scfm 14.2
NaturalGasConsumption,MMBtu/h(HHV) 0.87
WaterConsumption(average),gpm None
WaterDischarge(average),gpm None
SystemEfficiency(1)(2)
HeatRate(HHV),Btu/kWh 13,400
ElectricalEfficiency,% 25
EmissionRates
CarbonDioxide(electricityonly),lb/MWh 1,375
NitrogenOxides,lb/MWh 0.05
SulfurOxides,lb/MWh Negligible
ParticulateMatter(PM10),lb/MWh Negligible
Source:CapstoneTurbineCorporationNotes:1. AssumesHHVofnaturalgasof1,025Btu/scf.2. Systemefficiencyassumeselectricity‐onlyoperation(i.e.,nowasteheatrecovery
orCHPoperation).
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BLACK & VEATCH | Technical Characteristics and Costs 3‐26
3.3.2 Microturbine Costs
Intheperiodfrom2011to2014,only8microturbineprojectswerefundedthroughSGIP.TheseprojectsaresummarizedinTable3‐12.
Table 3‐12 Microturbine Projects Applying for SGIP Funding in 2011 to 2014
TECHNOLOGY SUPPLIERYEAROF
APPLICATION
RATEDCAPACITY(KW)
ELIGIBLEPROJECTCOST(1)($)
ELIGIBLEPROJECTCOST(1)($/KW)
Microturbine FlexEnergy 2011 726 2,831,300 3,900
Microturbine Capstone 2012 65 504,200 7,750
Microturbine Capstone 2012 65 504,200 7,750
Microturbine Capstone 2012 585 2,510,100 4,290
Microturbine Capstone 2012 600 1,129,600 1,880
Microturbine FlexEnergy 2012 750 3,310,500 4,410
Microturbine Capstone 2012 1,000 4,541,300 4,540
Microturbine Capstone 2013 1,000 3,067,100 3,070
Source:CPUC,SGIPQuarterlyProjectsReport(http://www.cpuc.ca.gov/PUC/energy/DistGen/sgip/).Notes:1. EligibleprojectcostisbasedontotaleligiblecostslistedinSGIPdatabase.
FortheCapstoneinstallationsof65kW,costswerereportedtobe$7,750perkWin2012,whilelargersystems(greaterthan500kW)rangedfrom$3,000to$4,500perkW,withtheexceptionofthe600kWCapstonesystemwithareportedcostof$1,880perkW.
BasedonrecentpricequotationsobtainedbyBlack&Veatchformicroturbinesandancillaryequipment,equipmentcostsareapproximately$2,500perkWto$3,000perkW.Therefore,whenaddingprojectdevelopmentandinstallationcosts,thereportedcostsfromSGIPwouldbeconsistentwiththeserecentequipmentquotationsandberepresentativeofcurrentinstalledcosts.
3.3.2.1 Forecasted Costs
Becauseoftherelativelymaturestateofmicroturbinetechnology,Black&Veatchdoesnotforeseesignificantcostreductionsinmicroturbineprojectcostsoverthelongterm.Therefore,theseprojectcostsareanticipatedtobeflatoverthemodeledprojectperiodinrealdollars.
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BLACK & VEATCH | Financial Assessment 4‐1
4.0 Financial Assessment Tomodelprojectfinancials,Black&VeatchmodeledeachofthetechnologiesforanumberofcommercialcustomertypesusingamodifiedscriptingofNREL’sSAMsoftware.Themodelincorporatestechnicalperformanceparameters,systemcapitalandO&Mcosts,projectfinancingandtaxes,incentives,andutilityratedata,togetherwithcustomerloaddata,toproduceasuiteofresultsincludingnetpresentvalue(NPV),paybackperiod,levelizedcostofenergy(LCOE),annualcashflow,andannualenergysavings.Black&Veatchmodeledscenariosfor2016and2035foralltechnologiesandcustomertypes.ForBESS,thesystemwastestedwithandwithoutsolarPV.Also,itwasimportanttousedifferentcustomertypestounderstandhowdifferentloadshapesmaybenefitthroughelectricitybillreductionsforbothdemandandenergycharges,undereachoftheirrespectiverateclasses.Foreachcustomertype,eachofthetechnologieswasalsosizedtomeeteitherthecustomerloadorminimumtechnologyunitsize.Forboththe2016and2035cases,Black&Veatchalsotestedtwoutilityratesescalatingtwoways:attheCPIof2percent,andatCPIplus1percent(CPI+1).Additionally,fuelcellsandmicroturbinesweretestedunderbaseandlowgaspricescenarios.
4.1 MODEL ASSUMPTIONS Black&VeatchdevelopedtechnicalandfinancialassumptionstobeinputintotheSAMmodelforeachscenario,manyofwhichwerederivedfromthetechnicalcharacteristicsdiscussedinSection3.0.Theseinputsaresummarizedinthefollowingsection.
4.1.1 Technical and Cost Assumptions
Forthisanalysis,Black&VeatchusedasinputthetechnicalparametersandcostforecastsdevelopedinSection3forthevarioustechnologies.
Table4‐1andTable4‐2summarizethetechnicalandcostinputstothefinancialassessment.ForBESS,Black&Veatchoptedtomodellithiumiontechnologyonly,asthetechnologyhasbetterround‐tripefficiencythanflowbatteriesandaremorepracticalatasmallscale.
Table 4‐1 Technical and Financial Assumptions ‐ BESS (2014$)
TECHNOLOGYSIZE(KWH)
2016 2035
CAPITALCOST
($/KWH)
FIXEDO&M
($/KW‐YR)
ROUND‐TRIP
EFFICIENCY(%)
CAPITALCOST
($/KWH)
FIXEDO&M
($/KW‐YR)
ROUND‐TRIP
EFFICIENCY(%)
BESS 10 1500 20 87 400 20 87
Forthe2035case,theimprovementsinfixedcostforfuelcellsandBESSwereassumedasdiscussedinSection3.0.InthecaseofSOFC,aheatrateimprovementontheorderof20percenthigherthanthatofcurrentcommercialsystemswasassumed.ThisassumptionisbasedonthegapbetweenexistingcommercialsystemsandthetechnicallyachievableefficiencyforSOFC.Othercommercialfuelcelltechnologies(MCFC,PAFC)andmicroturbinescurrentlyperformneartheirtechnicalpotential;thus,noheatrateimprovementisapplied.Similarly,noimprovementisassumedforBESSround‐tripefficiencyinthe2035case.
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BLACK & VEATCH | Financial Assessment 4‐2
Table 4‐2 Technical and Financial Assumptions ‐ Fuel Cells and Microturbines (2014$)
TECHNOLOGYSIZE(KW)
2016 2035
CAPITALCOST($/KW)
FIXEDO&M($/KW‐YR)
HEATRATE(BTU/KWH)
CAPITALCOST($/KW)
FIXEDO&M($/KW‐YR)
HEATRATE(BTU/KWH)
SOFC 210 8000 1000 7000 1500 150 5600
MCFC 300 4000 300 8000 1500 150 8000
PAFC 400 6000 150 9000 1500 150 9000
Microturbine 65 4000 170 13400 4000 170 13400
Table4‐3showsthegross‐to‐netlossassumptionsappliedtofuelcells,microturbines,andBESS.Inthecaseoffuelcells,ratherthanapplyapercentageyear‐to‐yeardegradation,anoverallsystemde‐ratewasappliedtobetterrepresentthestackreplacementundertheassumedO&Mpracticesforcommercialsystems.Black&VeatchhasassumedthatfuelcelltechnologieswillimprovethroughadvancesidentifiedinSection3.2,hencethisde‐rateisreducedforthe2035scenarios.
Table 4‐3 System Loss Summary for Fuel Cells and Microturbines
LOSSCATEGORY LOSS(%)
NameplateLosses 99
Availability 98
De‐rateforStackDegradation–2016(FuelCellOnly) 90
De‐rateforStackDegradation–2035(FuelCellOnly) 95
Fuelcellsandmicroturbinesaremodeledasfueledbynaturalgas.Bothtechnologiesarecapableofrunningonbiogas,butsuchaprojectwouldrequireauniquelocation,forexampleafoodprocessingplant,landfill,orwastewatertreatmentfacility.Black&Veatchhasassumedforthepurposesofthisanalysisthattheevaluatedcommercialcustomertypeswouldlikelynothavetheabilitytoutilizebiogasforthisreason.SuchoperationwouldalsoaddtothecapitalandO&Mcostsand,insomecases,reducelifespanofsomesystemcomponents.ThenaturalgaspricesusedarebasedoncurrentpublishedcommercialratesfromNWNatural,thegasutilityservingPortland,andescalatedatthegrowthratecalculatedfrombaseandlowwholesalepriceforecastsprovidedbyPGE,14asshownonFigure4‐1andinTable4‐4.
14 NW Natural Summary of Monthly Sales Service Billing Rates: https://www.nwnatural.com/uploadedFiles/Oregon_Billing_Rate_Summaries.pdf.
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BLACK & VEATCH | Financial Assessment 4‐3
Figure 4‐1 Retail Natural Gas Forecast, Base and Low Cases (2014$)
3.00
4.00
5.00
6.00
7.00
8.00
9.00
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
2036
2038
2040
2042
2044
2046
2048
2050
2052
2054
2014$/MMBtu
Retail‐Base
Retail‐Low
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BLACK & VEATCH | Financial Assessment 4‐4
Table 4‐4 Natural Gas Wholesale and Retail Commercial Forecast (2014$)
2014$/MMBTU
PGEFORECASTEDWHOLESALEPRICES ESTIMATEDRETAILPRICES
BASE LOW BASE LOW
2016 3.86 3.86 6.68 6.68
2017 3.80 3.67 6.57 6.34
2018 3.82 3.47 6.60 6.00
2019 3.83 3.28 6.62 5.66
2020 3.84 3.03 6.64 5.24
2021 3.67 2.87 6.34 4.95
2022 3.68 2.95 6.35 5.10
2023 3.89 3.00 6.72 5.19
2024 3.78 2.97 6.53 5.14
2025 4.01 3.09 6.93 5.34
2026 4.77 3.56 8.24 6.16
2027 4.53 3.52 7.83 6.08
2028 4.38 3.49 7.56 6.03
2029 4.50 3.65 7.78 6.31
2030 4.77 3.82 8.25 6.60
2031 4.97 3.95 8.59 6.82
2032 4.97 3.95 8.59 6.82
2033 4.96 3.94 8.58 6.81
2034 4.96 3.94 8.57 6.81
2035 4.96 3.94 8.57 6.80
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BLACK & VEATCH | Financial Assessment 4‐5
4.1.2 Financial and Incentive Assumptions
Thefollowingareincentivesthatwerereviewedfortheanalysisandmatchedtoeligibletechnologies.Eachincentivewasappliedtotheeligibletechnologiesforthevarious2016modelingscenarios:
FederalITC:Ataxcreditequalto30percentofeligibleprojectcostsforfuelcellsand10percentofeligiblecostsformicroturbines.
FederalModifiedAcceleratedCostRecoverySystem(MACRS):Fiveyearsforfuelcells,microturbines,andenergystorage.
OregonStateRenewableEnergySystemsPropertyTaxExemption:Ofthetechnologiesconsideredinthisanalysis,onlyfuelcellsareexplicitlyincluded,althoughithasbeenassumedthattheexemptionisavailabletomicroturbinesandenergystorage.
EnergyTrustofOregon(ETO):50percentgrantsforanumberofrenewableenergytechnologiesincludingfuelcells;however,eligibilityislimitedtothoseprojectsusingarenewablefuel.TheBlack&Veatchassessmentconsidersonlynaturalgasasafuel,sofuelcellsarenoteligible.
ETOSolarIncentive:SimilartotheassumptionsforBlack&Veatch’sSolarMarketStudy,itwasassumedthatthesolarportionofthesolarPVandBESSsystemwouldbeeligible.Table4‐5summarizestheincentivesappliedinthefinancialassessment.
OregonStateNetEnergyMetering(NEM):PGEcustomersarecreditedattheirutilityratescheduleforexcessgeneration,rollingoverfrommonth‐to‐month.Anyexcessgenerationremainingattheendoftheyearisnotcreditedtothecustomer.ThiseffectivelycapsaprojectunderNEMatthecustomer’stotalannualconsumption.Fuelcellsrunningonnaturalgasareeligible,butmicroturbinesandBESSarenot.Black&VeatchhasassumedasolarPVplusBESSsystemwouldbeeligiblefornetmetering.
Table 4‐5 Available Financial Incentives in 2016 Cases
TECHNOLOGYFEDERALITC
FEDERALMACRS
PROPERTYTAXEXEMPTION ETO NETMETERING
SOFC 30% Eligible Eligible NotEligible Eligible
MCFC 30% Eligible Eligible NotEligible Eligible
PAFC 30% Eligible Eligible NotEligible Eligible
Microturbine 10% Eligible Eligible NotEligible NotEligible
BESS NotEligible Eligible Eligible NotEligible NotEligible
BESS+SolarPV SolarPortionOnly
Eligible Eligible SolarPortionOnly
Eligible
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BLACK & VEATCH | Financial Assessment 4‐6
Forthe2035cases,incentivesareassumednottobeavailable,exceptforthe5‐yearMACRS.
Theanalysisperiodforallprojectshasbeensetto20years.AsdiscussedinSection3.0,theestimatedprojectlifespansforsometechnologiesmaybesignificantlylessthan20years,particularlyinthecaseoffuelcells.However,O&Mcostdatahavebeenestimatedbasedonfull‐servicewarrantiesandiscorrespondinglyhighforthosetechnologieswithshortlifespanstoaccountforfrequentfuelcell,turbine,orothercomponentreplacement.Inthecaseofenergystorage,asdiscussedinSubsection3.1.1,fulldailycyclingmayresultinalifespanofapproximately10years.Black&Veatchhasassumedthatthebatterysystemwillbecyclingdailybutnotnecessarilyatfulldischarge,soshouldbeabletooperateforthe20yeartestperiod.
Allprojectsareassumedtobecustomer‐ownedwithnodebtfinancing.Table4‐6summarizesthefinancialmodelingassumptions,thoughschoolsweremodeledastax‐exemptentities.Itisimportanttonotethatthepaybackcalculationreduces“energysavings”fortax‐payingentitiesbytheirtaxratesbecausetheywouldhaveotherwisehavebeenabletoexpensetheirelectricbillasatax‐deductibleitem.Theimpactofthiscalculationbetweentax‐payingandtax‐exemptcustomersissignificantonpaybackcalculations,eventhoughtax‐payingcommercialcustomersdobenefitfromMACRSandareabletodeducttheassetasacapitalexpense.
Table 4‐6 Financial Modeling Assumptions
FINANCIALASSUMPTIONS
AnalysisPeriod(Years) 20
FederalIncomeTax(%) 35.0
StateIncomeTax(%) 7.6
4.1.3 Customer Load
Itwasimportanttousedifferentcustomertypestounderstandhowdifferentloadshapesmaybenefitthroughelectricitybillreductionsforbothdemandandenergycharges,undereachoftheirrespectiverateclasses.Customerloadprofiles(hourlyelectricitydemand)wereobtainedfromDOEdatacompiledforallTypicalMeteorologicalYear3(TMY3)locationsintheUnitedStates,usingtheDOEcommercialreferencebuildingmodel15.ThedatasetcorrespondingtothePortlandInternationalAirportTMY3locationwasusedforthisanalysis.CommercialcustomertypesarepresentedinTable4‐7togetherwithsummarystatistics.PGErateschedulesusedintheanalysisaresummarizedinTable4‐8.
15 US DOE Commercial and Residential Hourly Load Profiles, openEI.org : http://en.openei.org/datasets/dataset/commercial‐and‐residential‐hourly‐load‐profiles‐for‐all‐tmy3‐locations‐in‐the‐united‐states.
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Table 4‐7 Commercial Customer Type Load Summary
COMMERCIALCUSTOMERTYPE
ENERGYUSE
(MWH)
AVERAGEDEMAND(KW)
PEAKDEMAND(KW)
MINIMUMDEMAND(KW)
LOADFACTOR(%)
ASSIGNEDPGERATESCHEDULE
FullServiceRestaurant
301 34 64 15 54 83
Hospital 8770 1001 1387 632 72 85
LargeHotel 2331 266 421 124 63 85
LargeOffice 5698 650 1718 211 38 85
MediumOffice 682 78 270 19 29 85
Outpatient 1228 140 307 36 46 85
PrimarySchool(1) 810 92 273 40 34 85
QuickServiceRestaurant
186 21 37 9 58 83
SecondarySchool(1) 2488 284 908 87 31 85
SmallHotel 549 63 126 32 50 83
SmallOffice 61 7 19 2 37 32
Stand‐AloneRetail 290 33 90 4 37 83
StripMall 270 31 84 3 37 83
Supermarket 1614 184 357 76 52 85
Warehouse 238 27 85 6 32 83
(1)Primaryandsecondaryschoolsaretax‐exemptcustomertypesandaremodeledassuch.
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Table 4‐8 PGE Commercial Rate Schedule Summary (2014 Rates)
SCHEDULE
PEAKDEMAND(KW)
OFF‐PEAKRATE
($/KWH)PEAKRATE($/KWH)
DEMANDCHARGE($/KW)
32 0to30 0.0827 0.0827 0
83 31to200 0.0728 0.0831 5.6753
85 201to4000 0.0639 0.0742 5.0573
89 >4000 0.0594 0.0697 3.8522
Resultsforthevarioustechnologiesarepresentedinthefollowingsections.
4.2 ENERGY STORAGE Fortheenergystorageanalysis,Black&Veatchtestedtwoconfigurations:BESSaloneandBESSwithPV.Black&VeatchdevelopedamodifiedscriptingofSAMtomodelBESSinbothconfigurations.Energystorageismodeledtoreducepeakdemandandassociateddemandcharges,aswellasshiftingloadbetweenon‐peakandoff‐peakhours.Figure4‐2illustrateshowBESScanoperatewithaPVsystemwheretheBESSshiftsloadduringthepeakhourstooff‐peakhours.Itshouldbenotedthatthisexampleusesa400kWhBESSforillustrativepurposes;theactualmodelrunsutilizedamuchsmallersystemsize,asdiscussedbelow.
Figure 4‐2 Illustrative Example of a Large Hotel Using 400 kWh BESS and PV
150
200
250
300
350
400
450
2‐Jul
3‐Jul
4‐Jul
5‐Jul
6‐Jul
kW
BuildingLoad
BuildingLoadWithPV
BuildingLoadWithPV+ES
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Forfinancialmodelingpurposes,wemodeledonlylithiumionbatterytechnology,duetotheavailabilityofsmallersystemsizesandsignificantlybetterround‐tripefficienciesthanflowbatteries.
4.2.1 System Size
FortheBESSplusPVsystems,thePVsystemsweresizedusingNRELcommercialcustomerprofiledataandestimatesofaverageavailablerooftopspace.Table4‐9showsthePVsystemsizesusedintheBESSplusPVcases.
Table 4‐9 Solar PV System Size by Customer Type
COMMERCIALCUSTOMERTYPEPVSYSTEMSIZE
(KW)
FullServiceRestaurant 36
Hospital 262
LargeHotel 113
LargeOffice 249
MediumOffice 116
Outpatient 55
PrimarySchool 481
QuickServiceRestaurant 16
SecondarySchool 686
SmallHotel 70
SmallOffice 36
Stand‐AloneRetail 162
StripMall 146
Supermarket 293
Warehouse 338
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Todeterminethebatteryenergystoragesystemsize,Black&Veatchranthemodelusingstepsizesof5kWhandevaluatedtheresultsintermsofsystemsize(kWh)versuspaybackyears.Inallcases,withandwithoutPV,itcanbeseenthatthepaybackcontinuestoincreasewithadditionalstoragecapacity.Figure4‐3showsthepaybackperiodsversusincreasingsystemsizeforeachcustomer.Basedonthisresult,thebatterysystemshavebeensizedtotheminimumavailablesystemsizeof10kWh,aslargersystemshavediminishingbenefitstoloadreduction.Black&Veatchnotesthattheresultsforsmallcustomerloads,suchaswarehouse,smalloffice,quickservicerestaurant,areerraticbeyond10kWh,asthesystemsizeisclosetotheiraverageloadandsoarenotshowninthegraphonFigure4‐3.
Figure 4‐3 BESS Payback Curves, 2035 CPI+1
4.2.2 Results
Figure4‐4andFigure4‐5showthepaybackinyearsforallcustomertypesforthe2016and2035energystorageandenergystoragewithPVfortheCPI+1case.Itshouldbenotedthatforsomeofthesystemsthatshowpaybacksof25years,thepaybackperiodsareactuallywellinexcessof25years,and,therefore,notfinanciallyviable.Ascanbeseen,particularlyinthe2016BESS‐onlycases,thelongcustomerpaybacksindicatepoorfinancialfeasibility.BecauseofthesmallmarginbetweentheTOUrates,thereislittleopportunitytotakeadvantageofarbitragefromloadshifting.Sincetheon‐peakratesareonlyaround15percenthigherthantheoff‐peakrates,afterfactoringintheround‐tripcharge/dischargeefficiencyofthebatterysystem,thereisverylittlepositive(andinsomecasesslightlynegative)financialadvantagetochargingduringoff‐peakperiodsanddischargingduringon‐peakperiods.Giventhiscondition,theprimaryadvantageofenergystorageis,therefore,inreducingthepeakdemandcharges.Inmostcases,thesechargesarerelativelylow,
0
5
10
15
20
25
30
5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100
Payback(yrs)
BESSCapacity(kWh)
FullServiceRestaurant
Hospital
LargeHotel
LargeOffice
MediumOffice
Outpatient
PrimarySchool
SecondarySchool
SmallHotel
StandAloneRetail
StripMall
Supermarket
10kWhSystem Size
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furtherdisadvantagingtheenergystoragefinancials.Thisisalsotrueforthe2035BESS‐onlycases,althoughdecreasedcapitalcostsshowcustomerswithsomereasonablepaybacks.
Ingeneral,in2035,customersunderthelargecommercialcustomerrate(Schedule85)withhigherdemandchargesappeartobenefitmostfromaBESSsystemwithlowerpaybacks,around5years.CustomersunderSchedule83appeartoachievepaybacksofabout10years.Thesmalloffice,underSchedule32,doesnotbenefitfromBESSatallsincethereisnodemandchargeassociatedwiththattariff.
Figure 4‐4 BESS Only Payback by Customer Type
0 5 10 15 20 25
FullServiceRestaurant
Hospital
LargeHotel
LargeOffice
MediumOffice
Outpatient
PrimarySchool
SecondarySchool
QuickServiceRestaurant
SmallHotel
SmallOffice
StandAloneRetail
StripMall
Supermarket
Warehouse
ES2035
ES2016
20‐YearSystem Life
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Table4‐10summarizesthepaybackforBESSOnlyunderboththeCPIandCPI+1cases.PaybackperiodsforCPIcasesaregreatlyincreaseddependingonthecustomertype.
Table 4‐10 BESS Only System Payback Summary by Customer Type
SYSTEMPAYBACK‐CPI SYSTEMPAYBACK‐CPI+1
ES2016 ES2035 ES2016 ES2035
FullServiceRestaurant 47.0 13.8 37.7 10.7
Hospital 28.6 8.2 24.8 6.5
LargeHotel 17.7 5.1 16.1 4.3
LargeOffice 17.9 5.2 16.2 4.4
MediumOffice 34.6 10.0 29.6 8.0
Outpatient 47.6 13.9 38.0 10.8
PrimarySchool 42.1 12.3 35.1 9.8
SecondarySchool 24.4 6.9 21.8 5.6
QuickServiceRestaurant >80 28.8 62.2 20.9
SmallHotel 30.1 8.7 26.0 6.8
SmallOffice >80 >80 59.2 19.3
StandAloneRetail 53.4 15.7 42.5 12.4
StripMall 49.5 14.5 39.9 11.4
Supermarket 26.2 7.5 23.0 6.0
Warehouse >80 32.0 67.2 24.5
WhencombinedwithaPVsystem,thetotalsystempaybackvariesbyeachcustomertype’suniquedemandprofileandPVsystemsize.However,thesepaybackcalculationsareworsethanPValone,soitdoesnotappeartobefinanciallypracticaltoinstallBESSwhenPVcurrentlyenjoysthebenefitsofnetmetering.
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Figure 4‐5 BESS plus PV System Payback by Customer Type
0 5 10 15
FullServiceRestaurant
Hospital
LargeHotel
LargeOffice
MediumOffice
Outpatient
PrimarySchool
SecondarySchool
QuickServiceRestaurant
SmallHotel
SmallOffice
StandAloneRetail
StripMall
Supermarket
Warehouse
PV+ES2035
PV+ES2016
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BLACK & VEATCH | Financial Assessment 4‐14
4.3 FUEL CELLS FuelcellsweremodeledforeachtechnologydiscussedinSection3.2:SOFC,MCFC,andPAFC.Currently,highcapitalandO&Mcostslimitcommercialfuelcellusetoareaswithstrongfinancialincentives,primarilyunderCalifornia’sSGIPprogram.Furthermore,manycurrentapplicationstakeadvantageoftheCHPcapabilitiesofsomefuelcellsystems;whereas,Black&Veatchfocusedstrictlyonelectric‐onlyapplications,whichpresentsomewhatlimitedopportunity.Black&Veatchhasassumed,asshowninTable4‐2,thatfuelcellcostswilldecreasedramaticallyby2035,andinthecaseofSOFC,mayachievehigherefficienciesinthe2035cases.Thereishighuncertaintyassociatedwiththeseassumptions,buttheyareconsideredtobereasonableassumptionstotestforlong‐termfeasibility.
4.3.1 System Sizing
Fuelcellsaremodeledtorunasbaseloadpower(i.e.,fullnameplatecapacity)withminimalloadfollowingcapabilities.Asfuelcellsareeligiblefornetmetering,systemshavebeensizedforeachcustomertypeaccordingtotheaverageelectricitydemand,showninTable4‐7.SincecurrentcommercialSOFC,MCFC,andPAFCsystemsareavailablemodularlyatcapacitiesof210kW,400kW,and300kW,respectively,foreachtechnologytype(asidentifiedinSection3.0),customertypeswithaveragedemandthatisbelowthecapacityofonesingleunithavebeenexcluded,assumingitwouldnotbefinanciallyviabletooperateanoversizedsystemundernetmeteringrules.Table4‐11showstheremainingcustomertypesofsufficientsizetobeincludedinthefinancialassessmentforfuelcells,alongwiththeultimatesystemsizemodeledforeachfuelcelltechnology.
Table 4‐11 Fuel Cell Customer Type and System Size
CUSTOMERTYPE
SYSTEMSIZE(KW)
SOFC(210KWSYSTEM)
PAFC(400KWSYSTEM)
MCFC(300KWSYSTEM)
Hospital 840 800 900
LargeHotel 210 NA 300
LargeOffice 630 400 600
SecondarySchool 210 NA 300
Supermarket 210 NA 300
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4.3.2 Results
Inboththe2016and2035case,thecombinationofcapital,O&M,andnaturalgasfuelcostsprohibitcostsavingsagainsttheutilityelectricityrates,evenwithavailableincentivesanda1percentrateescalation(theCPI+1case).Table4‐12showsthesystempaybackresultsfortheCPI+1case.
Table 4‐12 Fuel Cell System Payback by Customer Type, CPI + 1 Case, Base Fuel Cost
2016 2035
SOFC PAFC MCFC SOFC PAFC MCFC
Hospital >80 >80 >80 27.3 >80 >80
LargeHotel >80 >80 >80 27.3 >80 >80
LargeOffice >80 >80 >80 27.3 >80 >80
SecondarySchool >80 >80 >80 12.1 >80 27.3
SuperMarket >80 >80 >80 27.5 >80 >80
Forthe2035scenario,incentivesareassumedtobeunavailable,naturalgasfuelcostsareforecasttoincreasefasterthantheCPIrate,andevenwiththeassumeddramaticreductionincapitalandO&Mcosts,thevariousfuelcelltechnologiesstilldonotshowopportunityforpaybackwithintheprojectlife.Theonlycustomerwithapaybackbelowthe20yearprojectlifeisthesecondaryschoolSOFCcase,whosehighloadandtax‐exemptstatusprovideenoughbenefittoreduceitspaybackrelativetotheothercustomertypes.
Fuelcostsareclearlyasensitiveinputwithsignificantimpactontheresults,andaremoreuncertaininthe2035case.Black&Veatchalsomodeledallscenariosundera“low”fuelcostforecast.Usingthelowerfuelcosts,paybacksarereducedsomewhat;however,onlythesecondaryschool(atpaybacksof7.8yearsand17.5yearsforSOFCandMCFC,respectively)achievespaybacksbelowthe20yearprojectlife.
Table4‐13summarizestheLCOEforthedifferentfuelcellscenarios.Ingeneral,thereallevelizedcostofenergyishigherthanretailenergyratesforlargercommercialcustomers.
Table 4‐13 Fuel Cell Real Levelized Cost of Energy Estimates (2014$/kWh)
YEARNATURAL
GAS
SOFC MCFC PAFC
TAX‐EXEMPT
TAX‐PAYING
TAX‐EXEMPT
TAX‐PAYING
TAX‐EXEMPT
TAX‐PAYING
2016 Base $0.27 $0.24 $0.14 $0.13 $0.15 $0.13
Low $0.26 $0.23 $0.13 $0.12 $0.14 $0.12
2035 Base $0.08 $0.08 $0.10 $0.10 $0.11 $0.11
Low $0.07 $0.07 $0.09 $0.09 $0.09 $0.10
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WhileBlack&Veatchhasnotpresentedresultsforthecustomertypesexcludedforbeingbelowtheminimumsystemsize,thosecustomersweremodeledandpaybackperiodsforallscenariossignificantlyexceededtheestimatedprojectlife.
Itshouldbenotedthatallfuelcellshavebeenmodeledforelectricitygenerationonly.Somefuelcellscenariosmayprovetobecost‐effectiveifusedasaCHPapplication,butthatwasnotevaluatedinthisstudy.
4.4 MICROTURBINES MicroturbinesaremodeledbasedontheCapstoneC65,asdiscussedinSection3.3.Ingeneral,microturbinesaretypicallydeployedinnicheapplications,andoftenundersignificantincentivessuchasCalifornia’sSGIPprogram,astheirlowerefficiencyandrelativelyhighcosttypicallyprecludefinancialfeasibility.Wehaveassumed,asshowninTable4‐2,thatmicroturbinecostandperformancewillnotimprovefrom2016to2035asitisawell‐establishedtechnology.
4.4.1 System Sizing
Microturbinesarealsomodeledtorunatbaseloadpower,becauseoftheadditionalwearandtearincurredforcyclingandreducedheatratesiftheyarerunatpartload.SincemicroturbinesarenoteligibletobenetmeteredinOregon,anditwasassumedthatitwouldnotbefinanciallyviabletoselltheenergybacktoPGEatavoidedcost,systemshavebeensizedforeachcustomertypebasedontheminimumdemand,asshowninTable4‐7.UsingtheCapstoneC65astheminimummicroturbinesystemsizeof65kW,customertypeswithminimumdemandthatisbelowthecapacityofonesinglemicroturbinewereexcluded.Table4‐14Table4‐14showsthecustomertypesofsufficientsizetobeincludedinthefinancialassessmentformicroturbines,togetherwiththeultimatesystemsize.
Table 4‐14 Microturbine Customer Type and System Size
CUSTOMERTYPESYSTEMSIZE
(KW)
Hospital 585
LargeHotel 65
LargeOffice 195
SecondarySchool 65
Supermarket 65
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4.4.2 Results
Inallcases,forallcustomertypes(includingthosebelowtheminimumloadrequirement),andforboththebaseandlowfuelcostforecast,themodelresultsshowthathighcapitalandO&Mcosts,retailfuelprices,coupledwitharelativelylowefficiency,andlowerincentiveeligibilitymakethistechnologynotfeasibleforcommercialelectricity‐onlyapplicationsunderPGE’srateschedules.MicroturbinesmaybemorefinanciallyviableoperatinginCHPmodebutwillneedasuitablethermalloadtoaccommodatethemicroturbine.
Table4‐15summarizestheLCOEforthemicroturbinescenarios.
Table 4‐15 Microturbine Levelized Cost of Energy (2014$/kWh)
YEAR
MICROTURBINE
NATURALGAS TAX‐EXEMPT TAX‐PAYING
2016 Base 0.16 0.16
Low 0.14 0.14
2035 Base 0.17 0.18
Low 0.15 0.15
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BLACK & VEATCH | Achievable Potential 5‐1
5.0 Achievable Potential DevelopingestimatesofachievablepotentialfortheDGtechnologiesexaminedinthisstudyischallenginginthatthesetechnologiesundercurrentfinancialconditionsarenotfinanciallyviableinthenear‐term,andlong‐termcostoutlookisquiteuncertainformanyofthesetechnologies.Anotheraddedcomplexityisthatappropriatelysizingofthesystems,matchedtoacustomer’sloadshape,reallydrivesthefinancials.Inorderforthetechnologiestobefinanciallyviable,technologycostswouldneedtodropsubstantially,additionalpoliciesandincentiveswouldneedtobeputinplace,andchangesinratestructureareneededtopromoteadoption.Absentthoseconditions,Black&Veatchforecastsminimaladoptionofthesetechnologiesoverthestudyperiod.Ifanyadoptionoccurs,itwouldbetowardthelatterdecade(2026to2035)oftheanalysisperiodwhenbetterclarityoncostsisavailable.TheonemajorcaveatinthisstudyisthatBlack&Veatchfocusedontheimpactofthesesystemsoncustomerelectricitybillsbutdidnotaccountforthevalueofreliabilityandpowerqualitytothecustomer.Thesefactorsaremuchmoredifficulttovalueandcouldvarywidelybycustomertype.PGEmaywanttoconsiderstudyingthesevaluestocustomersfurtherinfutureanalysis.
Fortheenergystorageoptionsinthenear‐term,BESScostsarenotfinanciallyviableforanyofthecustomertypes,giventhelackofavailablefederalandstateincentivesaswellasrelativelylowdemandchargesandlittlearbitrageopportunitywiththeTOUrates.AsnotedinSection4.2,onlylithiumionBESStechnologywasmodeled:flowbatterieshavesignificantlylowerround‐tripefficiencywhichwouldresultinpoorfinancials.Forthe2035CPI+1case,whendemandchargesincreasefasterthaninflation,mostcustomertypeswerefoundtoshowpaybackperiodsoflessthan20years,assumingaBESScostof$400perkWhin2014$.Whiletechnicallyfinanciallyviable,similartotheSolarGenerationMarketResearchStudythatBlack&VeatchdevelopedforPGE,thelikelihoodofadoptionforindividualcustomersisstilllimitedbytheperceivedpaybackperiod.Sincetheredoesnotappeartobeamaximummarketpenetrationcurveavailableforenergystorage,ifcommercialcustomerpreferencesforBESSareassumedtobesimilartosolarPV(Figure5‐1),commercialcustomertypesthatseepaybacksofaround5yearshaveabouta20percentchanceofadoption.Usingthesamecurve,customertypesthatseepaybackscloserto10yearswouldhavea5percentchanceofadoption.
Figure 5‐1 Solar PV Maximum Market Penetration Curve Relative to Payback Period
0%
20%
40%
60%
80%
100%
0 5 10 15 20 25 30
MakretPenetration
PaybackPeriod
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Therefore,assumingthiscurveholdstrueforBESS,onlyabout5to20percentofcommercialcustomersarelikelytoadoptby2035.Sincecostsareonlyexpectedtodroptotheselowlevelsinthelatterhalfofthestudyperiod(2026to2035),minimaladoptionisanticipatedpriortothattimeperiod.Assumingthat5to10percentofPGE’scommercialcustomers(approximately104,000customers)wouldconsiderBESSinthe2026to2035timeframeandthatitismostpracticaltodeploysmallersystems(10kWh@2hourcapacity),theadoptionoverthose10yearscouldtotal52to104MWhor26to52MWofinstallations.Dividedevenlyacrossthe2026to2035timeframe,thatisequivalenttoapproximately2.6to5.1MWperyearofenergystorageinstallations.Adoptionmaybehigherifcertaincustomertypes,suchascriticalfacilities(hospitals,schools,etc.),placesomevalueonreliabilityandpowerqualityassociatedwithinstallingBESSand,thus,installlargersystemsand/orhavewideradoptiondespitepoorpaybacks.However,thismetricwasnotstudiedinthisanalysis.
Table 5‐1 Forecasted Annual BESS Adoption
BESSCAPACITY(MW/MWH)
2016TO2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
LowAdoption
0 2.6/5.2
2.6/5.2
2.6/5.2
2.6/5.2
2.6/5.2
2.6/5.2
2.6/5.2
2.6/5.2
2.6/5.2
2.6/5.2
HighAdoption
0 5.2/10.4
5.2/10.4
5.2/10.4
5.2/10.4
5.2/10.4
5.2/10.4
5.2/10.4
5.2/10.4
5.2/10.4
5.2/10.4
FortheBESSplussolarPVcases,theadditionofBESStoasolarinstallationdoesnotimprovethefinancialsofthecombinedsystem,and,infact,inthe2016cases,BESScausespaybacktoincrease.Therefore,inthenear‐term,giventhatsolarPVinstallationsareabletonetmeter,thereisnoincrementalbenefittodeployinganenergystoragesystemuntilnetmeteringisnolongeravailable.By2035,BESScostswillhavefallenenoughthatBESSinstallations,combinedwithsolarPV,willnotalterthepaybacksignificantlycomparedtosolarPValone.However,thisalsoimpliesthatacustomerwouldbeambivalenttoinstallingaBESSwithitssolarPVsystem,unlessnetmeteringwasnolongeravailable.Therefore,basedonthisanalysis,thedeploymentofBESSwithsolarPVsystemsisnotpracticaluntilnetmeteringisnolongeravailable.Ifnetmeteringisreplacedwithotherpolicies,thedeploymentofBESSaspartofasolarPVsystemmaybecomefinanciallyviable,butthiswilldependontherulesaroundthealternativeratestructures.
Theanalysisoffuelcellsandmicroturbinesinallcases,includinglownaturalgaspricecases,showedthatnoneofthesetechnologiesresultinfinancialpayback.Oneexceptionisthatthecaseforsecondaryschoolsin2035deployingSOFC,underalownaturalgaspricescenariowithratesthatincreaseatCPI+1,maymakesomefinancialsense.However,thisassumesthattheinstalledsystemandO&Mcostsdropsubstantiallyandefficiencygainsareachievedforthetechnology,whichishighlyuncertaingiventhetechnologystatustoday.AsidefromcapitalandO&Mcost,thefinancialsofthesetechnologiesrelativetoutility‐suppliedpowerarepenalizedintwoways:higherheatratescomparedtoPGE’ssystemheatrateandnaturalgaspricedatretailrates.Thesedrawbacksareunlikelytochangeunderanycondition.
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BLACK & VEATCH | Achievable Potential 5‐3
Inthisstudy,fuelcellandmicroturbinetechnologiesweremodeledforelectricityproductiononlyandCHPmodeswerenotconsideredinthefinancialmodel.However,mostcommercialfuelcellsandmicroturbinescanbeconfiguredasCHPsystems.WhileCHPmayimprovethesetechnologies’financialsoverelectricity‐onlyoperation,CHPapplicationsarelimitedtospecificcustomersthatcanutilizeboththeenergyandheat.AdditionalstudiesexaminingspecificcustomerloadwouldbeneededtoassessthepotentialoffuelcellsandmicroturbinesforCHPapplications.