Opportunities for Customers and Utilities - AEE New...

Director, Energy Storage

[email protected]

Ravi Manghani

The State of U.S. Storage Market Opportunities for Customers and Utilities

January 2017

1 Manghani - The State of U.S. Storage Market - 2017 AEENE Annual Energy Outlook Forum

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Manghani - The State of U.S. Storage Market - 2017 AEENE Annual Energy Outlook Forum

Deployment Trends


-

10

20

30

40

50

60

70

80

Q12013

Q22013

Q32013

Q42013

Q12014

Q22014

Q32014

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Deplo

ym

ents

(M

Wh)

Residential Non-Residential Utility

U.S. Energy Storage Market Has Grown In Fits And Starts U.S. Energy Storage Deployments (MWh)

Source: GTM Research/ESA U.S. Energy Storage Monitor


Where Is Energy Storage Deployed So Far?

Residential Non-Residential Utility

California 31%

Hawaii 24%

All Other 45%

California 86%

All Other 14%

PJM 42%

California 36%

All Other 22%

U.S. Energy Storage Deployments (MWh), Cumulative Through Q3 2016



Market Drivers

Key Wins in 2016


Energy Cost Reduction

T&D Cost Reduction

Ancillary Services and Wholesale Market Cost Reductions

Reduced Peak Capacity

$275 M

$305 M

$397 M

$1,083 M

$219

M

Renewable

Integration Cost

Reduction

Source: State of Charge Report – Massachusetts Energy Storage Initiative

$2.3B in total potential

system benefits

The Value Of Energy Storage Is Increasingly Clear Potential System Benefits Highlighted by Massachusetts State of Charge Report


Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan

Alison Canyon: 15 Months Of History

2015 2016 2017

40 MW of

capacity

scheduled to

come online in

SCE

Remaining 7 MW of

capacity scheduled to

come online in SCE and

37.5 MW of capacity

scheduled to come online

in SDG&E

Aliso Canyon

gas leak is

discovered

Governor

Brown declares

state of

emergency

California

energy

agencies

release action

plan

Gas leak is

permanently

plugged; SDG&E

launches

preferred

resource LCR

RFO

CPUC orders

SCE to undertake

“expedited

procurement” for

storage resources

to meet capacity

shortfall

SDG&E releases

plans to expedite

37.5 MW of

energy storage

projects with

AES

SCE

announces

winners

totalling 47 MW

of capacity

Initial leak lasts

118 days;

97,000 tons of

methane

released

Source: GTM Research


Aliso Canyon Procurement Result Breakdown

SCE Procurements

1. Western Grid, 5 MW/20 MWh

2. Altagas-Greensmith, 20 MW/80 MWh

3. Tesla, 20 MW/80 MWh

4. Powin Energy, 2 MW/8 MWh

SDG&E Procurements

1. AES, 30 MW – 120 MWh

2. AES. 7.5 MW – 30 MWh

Aliso Canyon gas leak

site

1

4

2

SCE SDG&E

47 MW / 4 hr

duration

37.5 MW / 4 hr

duration

Multiple RFP

Winners

Single Awardee

Online 2016/2017 Online 2017

New procurements Expedited from

ongoing

procurement

Procurement data sources: SCE and SDG&E announcements and procurement websites, CA County Map

Source: California Elections Website http://www.sos.ca.gov/elections/map

2 3

1


Proposed participation model must…

The Biggest Boost Yet: FERC Proposal, November 17

..ensure that storage resources are eligible to provide

all capacity, energy and ancillary services that they

are technically capable of providing

..incorporate bidding parameters that account for the

physical and operational characteristics of electric

storage resources

…establish a minimum size requirement for

participation that does not exceed 100 kW

Source: FERC Open Commission Meeting Staff Presentation Item E-1,

11/17/2016


$212

$502

$183 $161

$551

$416

$167

$5

$172

$645

22

29

24

32

39

35

38

0

10

20

30

40

$0

$200

$400

$600

$800

$1,000

2010 2011 2012 2013 2014 2015 Q1-Q3 2016

De

al C

ou

nt

Dis

clo

se

d V

alu

e (

Mill

ion

s U

SD

)

VC Project Financing Deal Count

Corporate Investments in Energy Storage at $660 Million in Q3 2016

Note: The total disclosed investment in 2014 was boosted by a rumored $250 million investment in Boston-Power (shaded in the figure above); Data excludes battery materials and upstream companies. 2014 data differs from U.S. Energy Storage

Monitor 2014 Year in Review due to the exclusion of EV startup Atieva and inclusion of stealth startup Fluidic Energy.

Disclosed Corporate Investments in Energy Storage, 2010-Q3 2016 (Million $, Number of Deals)



Case Studies Are Worth Thousand Deployments…


Option 1

Option 2

Option 3

$6,501/custom

er

Total = $488K

Residential Case Study: Green Mountain Power to Use Behind-the-Meter Storage to Reduce Peak Capacity and Transmission Costs

Forward

Capacity

Market

(75%)

Transmission

Costs (50%)

Total benefit

= $81K per

year

75 225 200

Total Grid Services Benefits = $205K per year

$6,501/custom

er

Total = $488K

Forward

Capacity

Market

(100%)

Transmission

Costs (70%)

Total benefit

= $124K per

year

Rate rider =

$37.5/month/

customer

Total = $91K

per year

Bill credit =

$31.8/month/

customer

Total = $81K

per year

Source: Green Mountain Power, GTM Research

System Sale/Lease

Cash Transaction

Grid Service


Non-Residential Case Study: Demand Reduction for a Commercial Customer Bill Savings Opportunity

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

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10

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08

/14

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/14

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5 2

4

Sto

rag

e S

tate

of C

ha

rge

(%)

De

ma

nd

- W

ith

an

d W

ith

ou

t S

tora

ge

(kW

)

Baseline Demand (kW) After Storage Demand (kW) Storage SoC (%)

Source: GTM Research The Economics of Commercial Energy Storage in the U.S.: The Outlook for Demand Charge

Management


Non-Residential Case Study: Medium C&I Energy Storage Returns Above 5 Percent in Seven Utilities in 2016, in 17 Utilities in 2021 (Base Case)


Management

2016 C&I Energy Storage Economics


Management

2021 C&I Energy Storage Economics (Base Case)

IRR 5%-

10% IRR 10%+

IRR 5%-

10% IRR 10%+


Utility Case Study: KIUC Centralized Generation and Net Load Today

0

10

20

30

40

50

60

70

80

00:00 04:00 08:00 12:00 16:00 20:00

Ge

ne

ratio

n a

nd

Net

Syste

m L

oa

d (

MW

)

CT1 D6 D7 D8 D9 D1 D2 D3 D4 D5 GT1 GT2 S1 Solar, Hydro System Load

Source: KIUC, GTM Research. CT = Combustion turbine, D = Diesel engine, GT = Gas turbine, S = Steam turbine.

Existing Centralized Solar and Hydro

Baseload Gas Combustion Turbine

As of October 14, 2015


Utility Case Study: KIUC Centralized Generation and Net Load 13 MW Kapaia Solar Plant Addition

Source: KIUC, NREL PVWatts, GTM Research. CT = Combustion turbine, D = Diesel engine, GT = Gas turbine, S = Steam

turbine.

0

10

20

30

40

50

60

70

80

00:00 04:00 08:00 12:00 16:00 20:00

Ge

ne

ratio

n a

nd

Net

Syste

m L

oa

d (

MW

)

CT1 D6 D7 D8 D9 D1 D2 D3

D4 D5 GT1 GT2 S1 Solar, Hydro KAPAIA Solar System Load

Adding more solar leads to

over-generation, causing

further stress on baseload

fossil fuel plant


Utility Case Study: KIUC Centralized Generation and Net Load

13 MW Kapaia Solar Plant Plus 13 MW/52 MWh Storage Plant Addition

Source: KIUC, NREL PVWatts, GTM Research. CT = Combustion turbine, D = Diesel engine, GT = Gas turbine, S = Steam

turbine.

0

10

20

30

40

50

60

70

80

00:00 04:00 08:00 12:00 16:00 20:00

Ge

ne

ratio

n a

nd

Net

Syste

m L

oa

d (

MW

)

CT1 D6 D7 D8

D9 D1 D2 D3

Combining storage with solar not only relieves stress

on baseload generation, but can also eliminate

operation of inefficient fossil fuel plants and reduce

carbon emissions


U.S. Storage Market Outlook


260

2,045

-

0.5

1.0

1.5

2.0

2.5

3.0

3.5

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E 2021E

Dis

ch

arg

e D

ura

tion

(Ho

urs

) E

ne

rgy S

tora

ge

De

plo

ym

en

ts b

y S

egm

en

t (M

W)

Residential Non-Residential Utility Discharge Duration

U.S. Energy Storage Annual Deployments Will Exceed 2 GW by 2021 Market to Move to More Medium-to-Long Duration


Behind-the-meter segments

will be ~50% of annual

storage market by 2021

GTM Research is the leading market analysis and advisory firm on the transformation of the global electricity industry.

For more information, visit www.gtmresearch.com or email [email protected].

Thank you!

January 2017

Opportunities for Customers and Utilities - AEE New...

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