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Tdworld 7491 Sumitomo Sdge
Tdworld 7491 Sumitomo Sdge
Tdworld 7491 Sumitomo Sdge
Tdworld 7491 Sumitomo Sdge
Tdworld 7491 Sumitomo Sdge

California’s Storage Voyage

April 10, 2017
California has to surmount some big obstacles to hit its RPS targets.

According to the U.S. Department of Energy’s Energy Storage Database, California had a 50% share of the 214 MW of U.S.-based energy storage projects that became operational or were commissioned in 2016.

Pacific Gas & Electric (PG&E) reported on March 16, 2017, that it managed to deliver 32.8% of its electricity from renewable resources — including solar, wind, geothermal, biomass and hydro sources — in 2016. But PG&E still has a lot of work to do in order to meet the 33% renewable portfolio standard (RPS) goal for 2020 — as do the other utilities in the state.

What’s Driving the Push for Renewables and Storage?

California has to surmount some big obstacles to hit its RPS targets. Specifically, between December 2017 and the end of 2024, retirements of large power plants by PG&E, San Diego Gas & Electric (SDG&E), Southern California Edison (SCE) and Los Angeles Department of Water and Power will reduce available capacity by a total of 5659 MW.

Let’s take a look at PG&E. The first major storage units were installed in 2014. Storage targets are broken into pairs of annual solicitation cycles, which began in 2014 and will conclude with 580 MW of storage procured by 2020. The solicitation cycles are diversified across different levels, with 65 MW of transmission- connected energy storage, 40 MW of distribution-connected energy storage and 15 MW of customer-connected energy storage.

May Day Storage Growth in Spring

On May 1, 2017, California Public Utilities Commission plans to reopen its Self-Generation Incentive Program (SGIP) to energy storage applicants. SGIP provides incentives to support existing, new and emerging distributed energy resources (DERs), along with rebates for qualifying distributed energy systems installed on the customer’s side of the utility meter. Once reopened, SGIP will reserve 75% of its incentives for energy storage projects and 25% of its incentives for generation projects.

Storage initiatives are also moving forward briskly at SDG&E. In November 2016, SDG&E reported that it had more than 100 MW of storage either completed and operational or currently contracted.

SDG&E is also making a significant commitment to research and development in storage, as evident with its investment in a project involving a 2-MW vanadium redox flow battery. The project uses Sumitomo’s flow battery with an expected battery life of more than 20 years.

SDG&E’s Sumitomo project will help to quantify differences in flow battery performance versus other technologies, with regard to how much less degradation flow batteries suffer from, over time, due to repeated charging cycles. This issue also impacts battery economics and applications generally, since one of the most economically valuable applications is currently the utilization of batteries for frequency stabilization, which involves shorter cycles.

Capacity and the Value of BESS vs. Pumped Storage

A key use for battery energy storage systems (BESS) remains frequency regulation, which typically provides higher returns than other applications, including responding to day-ahead markets.

To give you an idea of the value of storage, PG&E’s 2-MW Vaca BESS system generated a return on the order of $2000 per megawatt in August 2015 and 350% higher monthly returns in March 2016, when the storage system operated exclusively for frequency regulation and generated approximately $7000 per megawatt. In contrast, PG&E found a much lower value for spinning reserves — which provide resource capacity available for quick dispatch if called by the California ISO — where the BESS returned a value of approximately $4 per hour per megawatt.

Storage systems are typically designed to meet specific needs. Indeed, the contrast could not be more different, comparing a large pumped hydro facility designed to meet daily energy swings against battery storage facilities designed to regulate frequency. If we look at the utilization rates or annual duration of usage of the largest storage facilities, the ratio of capacity (MW) to energy produced (MWh) shows how much higher the utilization rates are for pumped hydro storage facilities versus BESS solutions.

For example, SCE’s Big Creek facility, which is an open-loop pumped storage facility, generates 200 MW with an energy output rated at 3530 MWh and an annual duration of 17.7 hours. Its use case is focused on electric supply capacity and electric energy time-shifting. In contrast, PG&E’s 3.3-MW Powertree Services San Francisco One lithium iron phosphate battery has an annual duration of only 1.08 hours, for energy output of 3.5 MWh, because it is used for frequency control. In the middle of this range, and as a final example, the Long Beach campus of California State University has SCE’s lithium-ion battery system, which is rated at 1 MW with a power output of 6 MWh and a much smaller utilization of 6 hours.

While we are seeing tremendous interest in energy storage as utilities look to get a handle on the ultimate impact of DERs, it is important to differentiate various groups of projects based on their use cases. This is what we will do as we continue to report on storage trends as both the technology matures and its markets and applications proliferate.

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