Sandia National Laboratories is a multi-mission laboratory managed and operated by National Technology and Engineering Solutions of Sandia, LLC, a wholly

owned subsidiary of Honeywell International, Inc., for the U.S. Department of Energy’s National Nuclear Security Administration under contract DE-NA0003525

DAN BORNEO – SANDIA NATIONAL LABORATORIESRAY BYRNE – SANDIA NATIONAL LABORATORIES

JEREMY TWITCHELL – PACIFIC NORTHWEST NATIONAL LABORATORY

January 9, 2019SAND2018-13308 PE

Grid Energy Storage

Introductory Training for the New Mexico

Renewable Energy Storage Working Group

Santa Fe

2

Agenda

Welcome

Technologies, terms and fundamentals

Demonstrations and case studies

BREAK

Valuation, applications, and resilience

Regulatory proceedings and state policies

Resources

3

Tesla Charging stations Vandalized

3

• The charging stations looked to be pushed back on their pads with one almost off.

• Three of the chargers were missing.

www.richiejeep.com/2018-Cisco-TX-Supercharger/

'Total waste of Creme Eggs': vandals stuff sweets into electric car chargerSOPHIE WILLIAMSThursday 21 June 2018 15:56

4

Innovation : Something to Consider

One of the first gasoline powered cars ~1891 by Henry Nadig of Allentown, Pa. Courtesy of American Automobile Museum, Allentown, Pa.

The “NADIG”

5

Innovation: Something to Consider

Quotes about the Nadig in 1891*Blasted as a “dangerous device” – backfiring caused fires

Car not allowed on the streets during the day as it “frightened”

the horses

Constable served notice; drivers/operators could be arrested for

creating a “public nuisance”

“Shouts of ‘Get a horse!’ were followed by the grand insult of

the day – “Cabbages thrown at the hapless Nadig.”

* Whelan, Frank “Did Auto Age First Dawn in the Valley? Allentown Mechanic Built One of Country’s First Gas-powered Cars” Sept, 14,

1989 The Morning Call

6

DOE Energy Storage Program Overview

The Department of Energy’s Grid Energy Storage report (2013) identified a four-

pronged strategy to overcoming the barriers to energy storage deployment:

Cost-competitive energy storage technology development;

Validated reliability and safety;

Equitable regulatory environment; and

Industry acceptance.

7

OE Energy Storage Program Engagement Map

8

Industry Acceptance Program

Provide independent analysis

Application(s) benefit and ROI analysis

Power and energy requirements

Technology review and system testing

Support the development and implementation of grid-tied ES projects

RFI/RFP development

Design and Procurement Support

Application/Economic analysis

Commissioning Plan Development

Monitor and analyze operational ES Projects

Application optimization

Operational performance

Develop public information programs

Webinars

Workshops and presentations

9

Energy Storage:

Technologies, Terms, and Fundamentals

10

Source: DOE Global Energy Storage Databasehttp://www.energystorageexchange.org/

Energy Storage Comparison

Globally

• 1.7 GW - Battery Energy Storage

• ~170 GW - Pumped Storage Hydropower

U.S.

• 0.33 GW BES

• 22.7 GW PHS

% of U.S. Generation Capacity

• 0.03% Battery Energy Storage

• 2.2% Battery + Pumped Storage

Grid Energy Storage Deployments

Li-ion78%

Flow5%

Na-metal12%

Pb-acid5%

Other0%

0.0

1.0

2.0

3.0

4.0

5.0

Li-ion Flow Na-metal Pb-acid

Average Duration Discharge (hrs)

11

Growth in Battery Energy Storage over Past Decade

However

Grid-Scale Energy Storage still < 0.1% of U.S. Generation Capacity

EV’s < 1% of vehicles sold in U.S.

Source: GTM Research / ESA | U.S. Energy Storage Monitor Q2 2018

KEYFront of Meter

Non -

Residential

Residential

Current Grid Storage Deployments

12

Energy Storage Performance Ranges

1

10

100

1000

10000

100000

1000000

0.01 0.1 1 10

Dis

char

ge P

ow

er

Discharge Duration (hrs)

1 GW

1 MW

1 kW

Sup

erca

p

TVA PHS1.6 GW22 hrs

Battery Energy Storage

CAESFl

ywh

eels

100

13

Basic Battery Terminology

Electrochemical Cell: Cathode(+), Anode (-), and Electrolyte (ion conducting

intermediate)

Energy (kWh) = Voltage (V) difference between anode and cathode multiplied by

amount of ion the electrodes are able to store - given as Ah of capacity

Energy Density (Wh/kg or Wh/L): used to measure the energy density of battery.

Note: number often given for cell, pack, and system

Generally: pack = ½ cell energy density, and system is fraction of the pack.

$/kWh = capital cost of the energy content of storage device.

14

Elements of Battery Energy Storage

NOTE: All–in can increase cost by 2-4x.

Storage

• Storage device

• Battery Management & Protection (BMS)

• Racking

• $/KWh

• Efficiency

• Cycle life

Balance of Plant

• Housing

• Wiring

• Climate control

• Fire protection

• Permits

• $

Power Control System (PCS)

• Bi-directional Inverter

• Switchgear

• Transformer

• Interconnection

• $/KW

Energy management System (EMS)

• Charge / Discharge

• Load Management

• Ramp rate control

• Grid Stability

• Monitoring

• $

• DER control

• Synchronization

• Islanding

• Microgrid

• $

Site Management System (SMS)

15

Lithium-ion Batteries

Advantages

High energy density

Better cycle life than Lead - Acid

Decreasing costs – Stationary on coattails

of increasing EV.

Ubiquitous – Multiple vendors

Fast response

Higher efficiency* (Parasitic loads like

HVAC often not included)

Applications

Traditionally a power battery but cost

decreases and other factors allow them to

used in energy applications SCE Tehachapi plant, 8MW - 32MWh.

SCE/Tesla 20MW -80MWh Mira Loma Battery Facility

16

Source: Z. Yang JOM September 2010, Volume 62, Issue 9, pp 14-23

Lithium-ion: Basic Chemistries

17

Lithium-ion: Basic Chemistries

ChemistrySpecific Capacity

Potentialvs. Li+/Li

LiCoO2 273 / 160 3.9

LiNiO2 274 / 180 3.6

LiNixCoyMnzO2

~ 270 / 150~180

3.8

LiNixCoyAlzO2 ~ 250 / 180 3.7

LiMn2O4 148 / 130 4.1

LiMn1.5Ni0.5O4 146 / 130 4.7

LiFePO4 170 / 160 3.45

LiMnPO4

171 / 80~150

4.1

LiNiPO4 166 / - 5.1

LiCoPO4

166 / 60~130

4.8

Chemistry Specific Capacity Potentialvs. Li+/Li

Soft Carbon < 700 < 1

Hard Carbon 600 < 1

Li4Ti5O12 175 / 170 1.55

TiO2 168 / 168 1.85

SnO2 782 / 780 < 0.5

Sn 993 / 990 < 0.5

Si 4198 / < 3500 0.5 ~ 1

Cathodes

Anodes

NMC – LG/Volt

LFP

LTO

NCA - Tesla

iphone

18

Energy Density of Li-ion Chemistries

19

Tesla Battery Pack: 85 kWh

http://insideevs.com/look-inside-a-tesla-model-s-battery-pac/

7,104 cells

http://club.dx.com/forums/forums.dx/threadid.457734

18650 cell format used in 85 kWh Tesla battery

A system like 20MW -80MWh Mira Loma Battery Storage Facility

would require at least 6.7 million of these 18650 cells

Why this form factor?

20

Li-ion Batteries: SOA

For grid applications

Costs coming down in lithium-ion batteries. However, BOM constitute ~70-80% of cell cost.

Need lower manufacturing costs, currently in the $300-400M range for a 1GWh of manufacturing capacity

Grid batteries in addition to low BOM and cost of manufacturing

Excess capacity in the large format automotive batteries driving the market for applications in the grid

However

Safety and reliability continues to be significant concerns

Power control and safety adds significant cost to Li ion storage

Packaging and thermal management add significant costs

Deep discharge cycle life issues for energy applications (1000 cycles for automotive)

Takeaway: Need to manage the battery to limit the DoD, charge, ambient temperature.

21

Lead-Acid: Basic Chemistry and Issues

Overall Reaction

• Pb(s) + PbO2(s) + 2H2SO4(aq) → 2PbSO4(s) + 2H2O(l)

• OCV ~ 2.0 V

Flooded lead-acid

• Requires continuous maintenance

• Most common

Sealed lead-acid

• Gel and Absorbed Glass Mat (AGM)

• More temperature dependent

Advantages/Drawbacks

• Low cost/Ubiquitous

• Limited life time (5~15 yrs)/cycle life (500~1000 cycles)

and degradation w/ deep discharge (>50% DoD)

• New Pb/C systems > 5,000 cycles.

• Low specific energy (30-50 Wh/kg)

• Overcharging leads to H2 evolution.

• Sulfation from prolonged storage

http://www.ultrabattery.com/technology/ultrabattery-technology/

22

Advanced Lead Acid: Testing at Sandia#

http://www.sandia.gov/batterytesting/docs/LifeCycleTestingEES.pdf

23

Sodium Metal Batteries (NaS, NaNiCl2..)

Two primary Sodium chemistriesNaS mature grid technology developed in 1960’s

High energy density -Long discharge cycles

Fast response- Long life

High operating temperature (250-300C)

530 MW/3700MWh installed primarily in Japan (NGK)

NaNiCl2, (Zebra)mature, more stable than NaS. Developed in South Africa in 1980’s

FIAMM in limited production

Large cells and stable chemistry

Lower temperature than NaS

Cells loaded in discharge mode

Addition of NaAlCl4 leads to a closed circuit on failure

High efficiency, low discharge

Long warm up time (16 hr)

Neither NaS nor NaNiCl2 are at high volumes of production for economies of scale

NGK 34MW - 245 MWh NaS, Rokkasho, Japan

FIAMM Sonick Na-NiCl2 Battery Module

24

Na-Metal Batteries: Basic Chemistry

Batteries consisting of molten sodium anode and β"-Al2O3 solid electrolyte (BASE).

Use of low-cost, abundant sodium → low cost

High specific energy density (120~240 Wh/kg)

Good specific power (150-230 W/kg)

Good candidate for energy applications (4-6 hrsdischarge)

Operated at relatively high temperature (300~350C)

Sodium-sulfur (Na-S) battery

2Na + xS → Na2Sx (x = 3~5)

E = 2.08~1.78 V at 350C

Sodium-nickel chloride (Zebra) battery

2Na + NiCl2→ 2NaCl + Ni

E = 2.58V at 300C

Use of catholyte (NaAlCl4)

25

Na-Metal Batteries: Advantages/Issues

Temperature

Less over-temperature concerns, typical operating window 200-350C. additional

heaters needed when not in use.

At < 98°C, Na metal freezes out, degree of distortion to cell dictated by SOC of

battery (amount of Na in anode)

Charging/Discharging Limitations

Safety Concerns

Solid ceramic electrolyte keeps reactive elements from contact. Failure in electrolyte can lead to exothermic reaction (Na-S)

26

Flow Batteries

Flow Battery Energy Storage

Long cycle life

Power/Energy decomposition

Lower efficiency

Applications

Ramping

Peak Shaving

Time Shifting

Power quality

Frequency regulation

Challenges

Developing technology

Complicated design

Lower energy density

UET - AVISTA, Pullman, WA. 1.0MW – 3.2 MWh.

Vionx Vanadium Redox Flow battery, 65kW - 390kWh

27

Key Aspects➢ Power and Energy are separate enabling greater flexibility and safety.

➢ Suitable for wide range of applications 10’s MW to ~ 5 kw

➢ Wide range of chemistries available.

➢ Low energy density ~ 30 Whr/kg

➢ Lower energy efficiency

Redox Flow Battery: Basic Chemistry

28

Flow Batteries - Future

The flexibility of redox flow battery technology offers the potential to capture

multiple value streams from a single storage device.

Current research has demonstrated high power conditions can be achieved with

minimal impact in stack efficiency.

Next generation RFB technology based on Aqueous Soluble Organics (ASO)

being developed to replace vanadium species.

Continued cost reductions in Li-ion technology will be driven by EV/PHEV

deployments. RFB may be able to achieve similar cost targets at ~ 100X lower

production volume.

29

High Energy Density Li and Metal Air Batteries

All metal air batteries (Li-air, Zn-air) have the potential to deliver high energy

densities at low cost, challenges with recharging have so far precluded

commercialization of the technology

Lot of startup activity in Metal-Air batteries

Technology not mature, decade or more away

Potential fundamental problems

Li-Air combines difficulties of air and lithium electrodes

Breakthroughs needed in cheap catalysts, more stable and conductive ceramic

separators

Developing a robust air electrode is a challenge, need major breakthroughs

Li-S suffers from major problems of self discharge and poor life

breakthroughs needed for life of Li electrode, low cost separator

Note: Looking for operational data to evaluate claims.

30

Rechargeable Alkaline Batteries

Primary Chemistries

NiMH

Ni-Fe

Zn-Ni

Zn-MnO2

For low cost grid storage applications, Zn-MnO2 has compelling

attributes.

31

History of Rechargeable

Zn-MnO2 Alkaline Batteries

Long history of research on making Zn-

MnO2 rechargeable.

Several commercial products based on

cylindrical formats (Rayovac, BTI).

All focused on cylindrical designs for

consumer markets.

J. Daniel-Ivad and K. Kordesch, “Rechargeable Alkaline Manganese Technology: Past-Present-Future,” ECS Annual Meeting, May 12-17, 2002

Cylindrical cells

No flexibility to change criticalparameters.

• Traditionally primary batteries• Lowest bill of materials cost, lowest

manufacturing capital expenses• Established supply chain for high

volume manufacturing• Readily be produced in larger form

factors for grid applications• Do not have the temperature

limitations of Li-ion/Pb-acid• Are inherently safer, e.g. are EPA

certified for landfill disposal.❖ Until recently reversibility of Zn/MnO2

has been challenging

32

Lithium Ion Battery Prices

2018

~$200/kWh Pack

$400-$450/kWh

system

33

Cell price is not only driver for further cost reduction

Cell

Pack

X 1.4

System

X 2.0

Installed

X 1.3

$80/kWh cell

$~300/kWh installed

34

Future cost reduction requires addressing the entire suite of

barriers for continued deployment of energy storage

Safety and Reliability Industrial

Acceptance

Regulatory Support

Redox Flow Sodium

Cost Competitive Technologies

Zn-MnO2 Cell

Pack

X 1.4

System

X 2.0

Installed

X 1.3

35

Energy Storage Systems

The process of making batteries into energy storage requires a significant level

of systems integration including packaging, thermal management systems,

power electronics and power conversion systems, and control electronics.

System and engineering aspects represent a significant cost and component, and

system-level integration continues to present significant opportunities for

further research.

Words to the wise: 1. Have an overall system integrator (Prime).2. Assure the Prime is experienced with batteries.

36

Safety Related Issues

▪ ESS ‘product’ configuration and how safety validation is addressed

▪ New versus existing systems and new versus existing building/facility

applications

▪ Siting (location, loads, protection, egress/access, maximum quantities of

chemicals, separation, etc.)

▪ Ventilation, thermal management, exhausts (when necessary, flow rates, etc.)

▪ Interconnection with other systems (electrical, any non-electrical sources)

▪ Fire protection (detection, suppression, containment, smoke removal, etc.)

▪ Containment of fluids (from the ESS and from incident response)

▪ Signage

37

Improving Storage Safety

Development of

Inherently Safe Cells

• Safer cell chemistries

• Non-flammable electrolytes

• Shutdown separators

• Non-toxic battery materials

• Inherent overcharge protection

Safety Devices and

Systems

• Cell-based safety devices

• current interrupt devices

• positive T coefficient

• Protection circuit module

• Battery management system

• Charging systems designed

Effective Response to

Off-Normal Events

• Suppressants

• Containment

• Advanced monitoring and controls

38

Safety through Codes and Standards

▪ Many ESS safety related issues are identical or similar to those associated

with other technologies

▪ Some safety issues are unique to energy storage in general and others

only to a particular energy storage technology

▪ Current codes and standards provide a basis for documenting and

validating system safety

▪ prescriptively

▪ through alternative methods and materials criteria

▪ Codes and standards are being updated and new ones developed

to address gaps between ESS technology/applications and criteria

needed to foster initial and ongoing safety

39

Introduction to PNNL/SNL Protocol

A set of best practices for characterizing ESS and measuring and reporting their performances

Available at http://www.sandia.gov/ess/publication/

7 Applications

Peak Shaving - Using an ESS to discharge during on-peak periods for electric power while charging the ESS during off-peak periods

Frequency Regulation - Regulate the electric power frequency by providing up regulation by discharging an ESS and providing down regulation by charging

Islanded Microgrids - Using an ESS as an electrical island separated from the utility grid

Renewables Firming (PV, Wind) - Using an ESS to supplement renewable energy generation to provide steady power output

Power Quality - Mitigating voltages sags by injecting real power from ESS for a few seconds

Frequency Control-Using a discharge/charge from an ESS to make up for a sudden loss of generation or load

40

SNL & PNNL Protocol for Evaluation of ES Systems

Companies looking for an accurate

method to gauge how well large

batteries and other grid-scale energy

storage systems work use these

evaluation guidelines, called the

Energy Storage Performance Protocol.

The guidelines currently evaluate three

energy storage performance uses: • Peak Shaving

• Frequency Regulation

• Islanded Microgrids

Additional Lab Protocols: • Duty Cycle for ESS Firming

• Duty Cycle for PV Smoothing

41

PNNL Documents for Evaluation of ES Systems

42

SNL Documents for Evaluation of ES Systems

43

Commissioning/Testing Process

COMMISSIONINGSafety and Reliability

Operational Acceptance Test

(OAT)

Apply YELLOW tag

Start-up

Functional Acceptance Test

(FAT)

Apply GREEN tag

Shakedown

Factory Witness Test (FWT)

Individual components

System as a whole including all controls

Sequence of operation/Application testing. Base line info

Workmanship, specifications

Anomaly/Safety performance

44

Data Acquisition System (DAS)

• DAS monitors battery performance for operation, performance, efficiency and capacity fade

• Remote access & Time stamp of data

• Sampling rate

• 30+ day on-board memory

General Monitoring Parameters for ESS and Balance of Plant

AC Voltage(V) Current(I)

Kwh in (efficiency) Kwh out(efficiency)

Balance of plant monitoring State of Charge(SOC)

System Temperature Ambient Temperature

Frequency DC Voltage

Cell Temperature System KW

Ramp Rate System KVA

Response Time Grid Monitoring

45

Takeaways

Advances in several areas will make grid-based storage systems safer, more

reliable, and cost-effective

Technology advances

Manufacturing and scale-up

Codes and standards

Enabling applications

Current demonstration projects are leading the way

Commissioning helps ensure safe installation

Testing helps understand system operation and performance

46

Energy Storage

Demonstrations and Case Studies

47

Has Energy Storage Arrived?

Solar + Storage

January 2017 - Kauai Island Utility Cooperative

signed a solar-plus-storage PPA at $0.11/kWh.

This project at 28 MW of solar and 100 MWh

of batteries — will displace the utility's current

oil-fired baseload generation.

May 2017 - Tucson Electric Power signed a

PPA with NextEra Energy for a solar-plus-

storage system at "an all-in cost significantly

less than $0.045/kWh over 20 years.” PPA for

the solar portion of the project at below

$0.03/kWh. 100 MW PV and a 30 MW/120

MWh energy storage system, both developed

by an affiliate of NextEra Energy.

Source: Kauai Island Utility Cooperative

Source: UtilityDrive

48

Recent Deployments – Aliso Canyon

Things can happen quickly

SDG&E 30 MW/120 MWh Li-ion battery energy

storage system in Escondido, Calif.

SoCalGas relies on Aliso Canyon to provide

gas for core customers—homes and small

businesses—as well as non-core customers,

including hospitals, local governments, oil

refineries, and 17 natural gas-fired power

plants with a combined generating capacity

of nearly 10,000 megawatts.

As part of a multi-part response to the crisis,

the California Public Utilities Commission in

May 2016 fast-tracked approval of 104.5 MW

of battery-based energy storage systems

within the service areas of Southern

California Edison (SCE) and San Diego Gas

& Electric (SDG&E).

49

Washington Clean Energy Fund

1. Puget Sound Energy – Glacier Energy

Storage System (ESS)

2. Orcas Power & Light Co-Op – Decatur

Island Energy Storage and Community

Solar Project

3. Avista Utilities – Turner Energy Storage

Project

4. Energy NW – Horn Rapids Solar,

Storage, and Training Facility

5. Snohomish Public Utility District –

MESA 1 and MESA 2 ESSs

12

34

5

50

Washington Clean Energy Fund Projects

Category Use Case PSE OPALCO Avista Energy

NW

SnoPUD

Bulk Energy

Service

Capacity or Resource

Adequacy✓ ✓ ✓

Arbitrage ✓ ✓ ✓

Ancillary

Services

Regulation ✓ ✓

Frequency Response ✓

Transmission

Services

Transmission Deferral ✓

Transmission Charge

Reduction✓ ✓ ✓

Distribution

Services

Conservation Voltage

Reduction✓ ✓ ✓

Utility Bill

Management

Load Shaping Services ✓ ✓

Demand Response ✓ ✓

Demand Charge Reduction ✓ ✓

Customer

Services

Outage Mitigation✓ ✓ ✓

51

Battery Storage Evaluation Tool (BSET)

BSET is used to run a one-year

simulation of storage operations

The formulation considers the

different operation modes of the

storage system and its operational

characteristics

Increasing discharging power for

one energy service decreases the

battery’s capability for other services

Data files are linked through a

simple interface

The primary outputs of the model

are the value of each service and the

optimal number of hours the

storage system would be engaged in

the provision of each serviceThere are losses associated with charging/discharging operations,

which are modeled and considered in the optimal scheduling

formulation in order to capture the maximum obtainable value

to the grid or profit

52

Service Optimization

53

Puget Sound Energy – Glacier Energy Storage System

Issue:

Frequent transmission-line outages in Glacier, WA due to

vegetation.

Solution:

Locate 2 MW – 4.4 MWh lithium-ion battery near

Glacier substation to provide (temporary) backup

power to distribution circuit

$3.8 million grid modernization grant awarded to PSE as

part of Washington Clean Energy Fund (CEF) I

Benefits Explored:

1. Flexibility services

• Energy arbitrage

• Regulation up/down

2. Primary frequency response

3. Capacity

4. Outage Mitigation

With DOE support, PNNL modeled battery operations to determine the long-term financial benefits and costs to Glacier, WA

54

Puget Sound Energy – Glacier Energy Storage System

Outage Data

27 hours of outages on average each

year

Model shows that all outages (4 on

average per year at approximately 6.5

hours each) can be mitigated with the

ESS

Customer information

Number of customers affected by each

outage obtained from PSE

Type of customers affected also

determined (38 residential and 20 small

commercial and industrial)

Annual benefit of roughly $310k to

ratepayersIslanded Area in Glacier

55

Results: Glacier ESS Costs and Benefits (Utility Perspective)

Utility Perspective:

Outage mitigation not included as

a benefit

$3.8 million CEF grant included in

cost recovery

Results:

Total 10-year benefit value of ESS

operations at $2.9 million in present

value (PV) terms, while revenue

requirements are $6.7 million

Benefit-cost ratio (BCR) of 0.44

Benefits are relatively evenly spread

amongst use cases

Highest benefit derived from regulation

services with $902k in 10-year PV benefits

ElementBenefits Revenue

Requirements

Arbitrage $ 550,816

Regulation $ 902,976

Spin & Non-Spin $ -

Primary Frequency Response $ 803,649

Resource Adequacy $ 695,292

Outage Mitigation $ -

Revenue Requirements $ 6,748,775

$ 2,952,733

0

2000000

4000000

6000000

8000000

Benefits Revenue Requirements

Arbitrage Regulation

Spin & Non-Spin Primary Frequency Response

Resource Adequacy Outage Mitigation

Revenue Requirements

56

Results: Glacier ESS Costs and Benefits (Including Outage Mitigation)

Including Outage Mitigation as a benefit increases total 10-year present value by nearly $3 million

Benefit-Cost Ratio nearly doubles to 0.85 with this benefit included

0

1000000

2000000

3000000

4000000

5000000

6000000

7000000

8000000

Benefits Revenue Requirements

Arbitrage Regulation Spin & Non-Spin

Primary Frequency Response Resource Adequacy Outage Mitigation

Revenue Requirements

57

Orcas Power & Light: Energy Storage & Community Solar

Submarine Transmission Cables

Mainland Washington

$1 million grid modernization grant awarded to

Orcas Power & Light Co-Op (OPALCO) as part

of Washington CEF II

0.5 MW / 2 MWh UniEnergy Technology (UET)

Vanadium Redox Flow Battery Used for Modeling

Purposes

504 kW LG Community Solar Array from Puget

Sound Solar Used for Modeling Purposes

Potential PV and energy storage benefits:

Demand charge reduction

Load shaping charge reduction

Transmission charge reduction

Transmission submarine cable replacement deferral

Conservation voltage reduction

Outage mitigation

Transmission Cable Map from Fidalgo Substation in Anacortes to Decatur and Lopez Islands

58

Orcas Power & Light – Results

Sensitivity Analyses:

Outage mitigation not

included in base case

due to utility perspective

analysis. Adding in the

additional use case

increases benefits by

$0.4 million and

provides a BCR of 1.25

Total 20-year value of PV and ESS operations at $3.3 million in PV terms, while PV costs are $2.9 million

for a benefit-cost ratio (BCR) of 1.13

Benefits largely driven by transmission deferral benefit at $2.0 million in PV terms

Cable replacement deferral estimated to be 3.65 years on a 40-year cable

$-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

Benefits Costs

Load Shaping Charge Reduction Demand Charge Reduction

Transmission Charge Reduction Volt-VAR/CVR

Transmission Deferral Energy Losses

Energy Storage System Rate Impacts Lost Revenue

Gen Set Cost Avoidance Outage Mitigation

PV Energy Production

Key Lesson: The

submarine transmission

cable deferral benefit

represents a unique but

high-value use case.

59

Avista: Turner Energy Storage Project

Issue:

Power sensitive customer at end of two feeders; ride through capability needed during

outages.

Solution:

Locate 1MW – 3.2 MWh battery

near SEL campus

Benefits:

1. Capacity-resource adequacy

2. Energy arbitrage

3. Regulation up/down

4. Conservation voltage reduction

5. Outage management of critical

loads, including addressing voltage sags

UET Battery System in Pullman, WA

60

Avista – Results

Benefits for the base case ($1.2 million), which takes the utility perspective, fall far short of the revenue

requirements for the Turner ESS; benefit-cost ratio is 0.2

Reliability benefits to SEL generate enormous benefits ($9.5 million), expanding the overall benefit-cost

ratio to 1.79

Benefits vs. Revenue Requirements – Utility Perspective Benefits vs. Revenue Requirements – Inclusive of Customer

Reliability Benefits

61

City of Richland: Horn Rapids Solar, Storage & Training Facility

$3 million grid modernization grant awarded

to Energy NW as part of Washington CEF II

1 MW / 4 MWh UniEnergy Technology

Vanadium Redox Flow Battery

4 MW Solar Array from Potelco/Quanta

Services

Potential PV and energy storage benefits:

Demand charge reduction

Load shaping charge reduction

Transmission charge reduction

Volt-VAR/CVR

Outage mitigation

Solar Energy Production

Renewable energy credits

With DOE support, PNNL modeled battery operations to determine the long-term financial benefits and costs to the City of Richland.

62

City of Richland: Results

Total 20-year value of PV and ESS

operations at $13.56 million in

present value terms, while costs are

$12.87 million for a BCR of 1.05.

Based on expected value calculations

Benefits largely driven by demand

charge reduction at $3.4 million in

present value terms and solar energy

production at $2.95 million.

Total system costs

Energy storage estimated at $5.1

million in PV terms

Solar PV costs at $7.8 million

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

Benefits Costs

Avoided Power Cost PV-Related Transmission Benefit

RECs Remarketing Revenue

Demand Charge Reduction Transmission Charge Reduction

Conservation Voltage Reduction BPA Demand Response

Energy Storage System Photovoltaics

63

Snohomish Public Utilities District: MESA 1 and MESA 2

Issue:

Broader effort aimed at transforming how utilities manage grid operations through

advancement of the Modular Energy Storage Architecture (MESA)

Solution:

Locate 2MW – 1 MWh li-ion and 2 MW – 8.0 MWh vanadium flow battery systems at two

substations in Everett, WA to improve the reliability and operating costs of BPA’s

transmission grid

Benefits:

1. Energy arbitrage

2. Minimize load balancing payments to BPA

3. Demand response

4. Capacity

5. Load shaping

6. Transmission congestion reductionMESA 1 - 2 MW / 1 MWh Li-Ion Battery

System in Everett, WA.

64

Non-Linear Battery Model Summary

Model allows estimation of SOC during operation taking

into account

Operating mode

Power

SOC

Temperature

Model has been validated with data

Allows calculation of one way efficiency from rate of

change of SOC

Actual battery performance can be anticipated, thus

providing a high degree of flexibility to the BESS

owner/operator

Self-learning model applicable to energy type of storage

system

Model will be fine-tuned as more data are gathered.

65

Non-Linear Battery Model Enhances Arbitrage Value for SnoPUD

SnoPUD MESA 2UET 2 MW/8 MWh V/V Flow

Annual benefits in energy arbitrage

Key Lesson: Improving operational knowledge

enhances profit potential by finding sweet spots in which

to operate the system to provide services with smaller

profit margins and by minimizing charging losses.

50% more arbitrage revenue possible for

SnoPUD when optimized using self-learning

non-linear battery model

Battery characterization based on data

collected from Avista-operated UET battery

deployed in Pullman, WA.

66

Next Step: Battery State of Health Model

Goal: Develop a reliable and accurate model to predict battery degradation under various

conditions and to integrate it as a module in BSET

Top-down model

Quantifying the effects of energy throughput, charge-discharge power, and operating temperature

Approach being further refined by adding depth of discharge, number of cycles, SOC operation

range, and time at various voltages.

Bottom-up model to estimate battery degradation

The model includes the effect of cycling and calendar aging, taking into account the effect of

temperature and voltage

The model to date accurately predicted degradation after 18 months of testing

Both these approaches will be modified to predict battery degradation across multiple

chemistries – various chemistries within Li-ion and flow batteries.

67

Summary: Valuing Storage Requires a Detailed Methodology

Siting/Sizing Energy Storage

Broad Set of Use Cases

Regional Variation

Utility Structure

Battery Characteristics

Ability to aid in the siting of energy storage systems by

capturing/measuring location-specific benefits

Measure benefits associated with bulk energy, transmission-level,

ancillary service, distribution-level, and customer benefits at sub-

hourly level

Differentiate benefits by region and market structures/rules

Define benefits for different types of utilities (e.g., PUDs, co-ops,

large utilities operating in organized markets, and vertically integrated

investor-owned utilities operating in regulated markets)

Accurately characterize battery performance, including round trip

efficiency rates across varying states of charge and battery

degradation caused by cycling.

68

Energy Storage

Valuation, Applications, and Resilience

69

Energy Storage Applications

Energy storage application time scale

“Energy” applications – slower times scale, large amounts of energy

“Power” applications – faster time scale, real-time control of the electric grid

70

Energy Storage Services (Value Streams)

Source: DOE/EPRI Electricity Storage Handbook in Collaboration with NRECA, 2013J. Eyer and G. Corey, “Energy Storage for the Electricity Grid:Benefits and Market Potential Assessment Guide”http://www.sandia.gov/ess/publications/SAND2010-0815.pdf

71

Why is Storage Valuation Difficult?

Location/Jurisdiction

Market area, e.g., California ISO

Vertically integrated utility, e.g., PNM

Transmission and distribution deferral is very location specific

Many applications require a combination of technical and financial analysis

Dynamic simulations (requires an accurate system model)

Production cost modeling (requires an accurate system model)

Difficult to break out current cost of services, especially for vertically integrated utilities

Identifying alternatives can be difficult

Many storage technologies are not “off-the-shelf ” proven technology (e.g., O&M costs, warranty)

Storage is expensive

72

Storage Valuation Principles

Co-optimization: the system may not fulfill multiple services simultaneously,

and choosing one action may prevent the system from responding effectively to

another opportunity (e.g. discharging for arbitrage may prevent the system from

mitigating an outage)

Performance-informed: asset conditions and performance vary by technology

and design, and we are still learning how precisely systems respond to control

communications and how intensively state of charge (SOC) affects efficiency

Discrete values: benefits must not overlap to avoid double-counting, with a

value developed from an avoided cost, revenue, or societal benefit

Timeframe for analysis: analysis time horizon should be equal to the lifetime

and life-cycle cost of the proposed set of assets

Location: values should reflect local conditions and value streams should be

location-, market-, region-, and utility-specific

73

Energy Storage Value Streams – an example

Renewable firming

For vertically integrated utilities – increased regulating and spinning reserves.

In market areas, adding ramping products.

CA “duck” curve

Solar variability

74

Takeaways

Barriers to energy storage

Cost

Electricity markets/utilities do not properly allocate payments/costs for services

provided

Voltage support

Inertia

Renewable integration

Reliability

The future

Greater penetration of renewables – storage becomes essential

Higher energy prices – storage starts looking better

Lower technology costs – storage starts looking better

Efficient market design – helps pay for storage costs

75

Energy Storage Optimization Tool

76

Example: Hourly value at Bainbridge Island

77

Summary of Results (NPV benefits and revenue requirements over 20-

year time horizon) – Bainbridge Island

Random Outages – Mid-C Capacity

Value

Projected Outages – Mid-C Capacity

Value

Projected Outages – Peaker-Driven Capacity Value

Random Outages – Peaker-Driven Capacity Value

Do you notice the biggest contributor?

78

Estimating the Value of Energy Storage – CAISO Example

Analyzed ~2200 LMP nodes in CAISO

Day ahead market arbitrage

Day ahead and real time market arbitrage

Key takeaways

Revenue opportunity is highly location dependent

Significantly more potential revenue if the real time market is included

Storage model1 MW, 4 MWh80% efficiency

79

Results for DA market arbitrage and frequency regulation1

1R. H. Byrne, T. A. Nguyen and R. J. Concepcion, “Opportunities for energy storage in CAISO," accepted for publication inthe 2018 IEEE Power and Energy Society (PES) General Meeting, August 5-9, 2018.

Estimating the Value of Energy Storage – CAISO Example

80

Sterling Municipal Light Department (SMLD)

Sterling Potential value streams:

Energy arbitrage

Reduction in monthly network load (based on monthly peak hour)

Reduction in capacity payments (based on annual peak hour)

Grid resilience

Frequency Regulation

Grid Resilience was the primary goal – other applications help pay for

the system

Several potential value streams (1MW, 1MWh 2017-18 data)

For more information, please refer to:

R. H. Byrne, S. Hamilton, D. R. Borneo, T. Olinsky-Paul, and I. Gyuk, “The value proposition for energy storage at the

Sterling Municipal Light Department,” proceedings of the 2017 IEEE Power and Energy Society General

Meeting, Chicago, IL, July 16-20, 2017, pp. 1-5. DOI: 10.1109/PESGM.2017.8274631

Description Total Percent

Arbitrage $40,738 16.0%

RNS payment $98,707 38.7%

FCM obligation* $115,572 45.3%

Total $255,017 100%

81

Optimization Results – Typical Week SMLD

• Last week of July 2015• Annual and monthly peaks• Spend the majority of the time

at 50% SOC performing frequency regulation

• Charge up to 100% SOC in hour prior to FCM peak

• Discharge for two consecutive hours (FCM and RNS peak)

• Return to 50% SOC and continue performing frequency regulation

• Note minimal arbitrage (qc, qd)• Assumes an energy neutral

(with losses) regulation signal

2 MW, 4 MWh system

82

RNS monthly peak hour

FCM annual peak hour

Discharge for FCM and RNS hours

Get back to ~50% SOC

REG all the time, except RNS, FCM100% SOC

Optimization Results – Typical Day SMLD

83

QuEST – Open Source Energy Storage Valuation Tool

Sandia released the internal Python-based software tools that have been employed in-house since ~2012

Based on Sandia’s Pyomo optimization framework in Python

High level object oriented language for formulating optimization problems

2016 R&D 100 award winner

Open source software package with technical support from Sandia

Initial capabilitiesRevenue optimization in ISO market areas

Arbitrage and frequency regulation

Planned capabilities for subsequent releasesMicrogrid design and operation

Storage plus solar and wind

Technology selection guideTotal cost of ownership calculations using updated data from the Energy Storage Handbook

Available on GitHub:

https://github.com/rconcep/snl-quest

84

Takeaways

Energy storage is capable of providing a number of grid benefits

Energy storage operation is an optimization problem

Stacking benefits can increase potential revenue …

At the expense of:Potentially accelerated degradation of the energy storage system

Potentially increased complexity of the forecasting and control algorithms

Modeling the degradation as a function of charge/discharge

profile is still an active research area

85

Resilience Includes Reliability

86

Resilience Metrics Should Reflect Consequence

SAIDI and SAIFI are averages. Looking at the distribution is the first step. The second step is understanding that

customers have complex, time-dependent value of avoided outage.

87

Community Resilience and Energy Resilience

The electrical grid is the “keystone” infrastructure

Urban planners focus on community performance when developing resilience

plans

Measure Classification Common Examples

Societal MeasuresNumber of People Without Necessary

Services

Lives at Risk

Net Population Change

Economic MeasuresGross Municipal Product / Net Economic

Losses

Change in Capital Wealth

Business Interruption Costs

88

Considerations for Storage Technology

With storage and advanced inverter functionality, we can consider 100%

renewable, urban microgrids utilizing storage to form community

resilience nodes

Even small amounts of storage can greatly decrease necessary capacity of

fossil generation on resilience nodes

All EV’s are not created equal

Fleet and battery-leasing ownership models

EV+automation

High capacity necessary for resilience benefit

89

Considerations for Regulators

Very hard to annually measure resilience performance without

tying attributes to performance (e.g. through extensive study of

historic performance)

“Who pays” – not binary. All ratepayers receive some benefit from

localized resilience investments, but the local customers benefit

most.

Willingness to pay for resilience – more complex than just one

survey

For more information on the Urban and Community Resilience initiative at Sandia,

contact Bobby Jeffers, rfjeffe@sandia.gov, or visit www.sandia.gov/cities/.

90

Legislative and Regulatory Models for Storage

91

Equitable Regulatory Environment Program Summary

Document federal, state and local policies affecting storage deployment

Review IRP and similar regional, state and community analytic processes affecting

storage development and deployment

Explore alternative policies that may affect technology attributes and deployment

Maintain publicly available information on storage technology and attributes

affecting its deployment

Disseminate comprehensive information on storage technology status,

experience, and realizable contributions to grid resilience, emergency response,

renewable deployment, and asset utilization

Provide best practices for installation and use of energy storage to regulators,

policy makers and industry

92

Documenting Policies: State Storage Policy Database

In recent years, several states have begun to identify and address barriers to

energy storage. PNNL is finalizing an interactive database of state-level energy

storage policies:

93

Procurement Targets

Generally adopted where a state identifies specific issues that energy storage is

expected to address, and current practices that may prevent storage from

adoption in the normal course of business. Currently adopted in seven states:

California: AB 2514 by 2020; 500 MW (distribution-connected) by 2020

Oregon: HB 2193by 2020

Massachusetts: 200 MW by 2020; 1,000 MWh by 2025

New Jersey: 600 MW by 2021; 2,000 MW by 2030

New York: AB 6571

Nevada: SB 204

Colorado: HB 18-270

94

Regulatory Adaptation

Several states have adapted regulations intended to reduce the barriers they

create against energy storage and other flexible, scalable technologies:

California: CPUC adopts 11 rules covering energy storage in planning

Washington: WUTC issues policy statement guiding storage modeling in IRPs

Hawaii: HPUC changes to interconnection requirements encourage storage;

streamlined proceedings for review of flexible resource investments

New Mexico: NMPRC amends IRP rule to require storage analysis

Virginia: Legislature requires distributed energy integration report

Target legislation in OR, MA, NJ also requires PUC to develop processes for

evaluating, siting storage

95

Demonstration Programs

Demonstration programs are state-directed initiatives in which the state

authorizes, and often assists in funding, energy storage projects intended to

assist utilities in gaining operational understanding of energy storage:

Massachusetts: ACES program provides $20 million to 26 projects

New York: REV initiative includes an open call for demonstration project

proposals; four projects developed

Washington: CEF provides $14.3 million for four demonstration projects

Virginia: Legislation authorizes storage demonstration projects of up to 30 MW

Utah: Legislation authorizes energy storage demonstration project

96

Financial Incentives

Six states offer state-funded programs that provide incentives, either as direct

payments or tax rebates, to customers who install energy storage:

California: Self-Generation Incentive Program set aside $378M for customer-sited

energy storage projects from 2017-2021

New York: The New York State Energy Research and Development Authority

provides multiple grant programs to support energy storage developments

Nevada: Legislation expands solar incentive program to include energy storage

Arizona: Regulators authorize $2M incentive program to assist large commercial

customers in deploying behind-the-meter storage for peak management

Vermont: Legislation makes storage eligible for Clean Energy Development Fund

Virginia: Solar development authority expanded to include energy storage

97

Consumer Protection

Two states have adopted legislation that guarantees certain protections to

customers who install energy storage:

Nevada: Legislation establishes a right for customers to install energy storage in a

timely manner, subject to reasonable standards

Colorado: Legislation establishes a right for customers to install energy storage

and directs the Colorado PUC to develop interconnection rules

98

Reviewing Policies: IRP Report

PNNL has a forthcoming report that examines how 21 U.S. utilities are treating

energy storage in integrated resource planning.

An integrated resource plan (IRP) is the process by which a utility identifies its

long-term system needs and the optimal strategy for meeting them.

Why focus on IRPs? An IRP has broad impacts:

It shapes the procurement process;

It establishes avoided costs used for energy efficiency programs and PURPA contracts;

and

For regulated utilities, it serves as the foundation of a prudence determination.

99

IRP Report: High-level Findings

15 of the 21 IRPs included battery storage in their process. Of those:

Eight plans did not select battery storage

Five plans selected batteries in their preferred portfolio

Two plans selected batteries in an alternate portfolio

10 of the 21 IRPs included pumped hydro storage in their process. Of those:

Seven plans did not select pumped hydro

Two plans selected pumped hydro in the preferred portfolio (both expansions of

existing facilities)

One plan selected pumped hydro in an alternate portfolio

100

IRP Report: Utilities Relatively Uncertain About Battery Costs

Cost assumptions for technologically mature resources such as combustion

turbines and pumped storage tended to cover a smaller range than

assumptions for less mature resources, such as lithium-ion and flow batteries:

$0

$1,000

$2,000

$3,000

$4,000

$5,000

CombustionTurbine

PumpedStorage

Li-Ion Flow

Resource Cost Assumptions, 2017 $ per kW

101

IRP Report: Services Modeled

As utilities account for more services provided by energy storage, the likelihood of storage being selected in the preferred portfolio increases:

Percentage of Utilities Including Battery Storage in the

Preferred Portfolio, by Number of Services Modeled

0%

20%

40%

60%

0

5

10

15

0-2 Services 3-4 Services 6-8 Services Perc

en

tag

e o

f U

tiliti

es

Inclu

din

g B

att

ery

S

tora

ge i

n t

he

Pre

ferr

ed

Po

rtfo

lio

(l

ine)

Nu

mb

er

of

Uti

liti

es

(b

ars

)

Number of Storage Services Included in the Model

102

Resources

DOE Energy Storage Website

(www.sandia.gov/ess/)

DOE Global Energy Storage

Database

(www.energystorageexchange.org)

Energy Storage Association

(www.energystorage.org)

2016 DOE/EPRI Electricity

Storage Handbook in

Collaboration with NRECA

PNNL Energy Storage

(energystorage.pnnl.gov)

103

Acknowledgements

This work was supported by

US DOE Office of Electricity

We thank Dr. Imre Gyuk, Manager of the DOE Energy Storage Program.

Many thanks to the Grid Energy Storage teams at Sandia, PNNL, and

numerous collaborative partners at universities and the industry.