National Assessment of Energy Storage for Grid Balancing and Arbitrage: Phase 1, WECC

Abstract

PHASE I WECC PHASE II EIC + ERCOT v 2. What are the most cost-effective technology options for providing additional balancing requirements today and in 2020 assuming technological progress? Our analysis includes the following technologies: i. Combustion turbine as a base case technology ii. Na-S (Sodium Sulfur) batteries iii. Li-ion (Lithium-ion batteries) iv. Flywheel v. CAES (Compressed Air Energy Storage) vi. Redox Flow batteries vii. Pumped Hydroelectric (PHES) Storage viii. Demand Response ix. Hybrid energy storage systems (configurations of various above mentioned storage technologies) 3. What is the market size (quantified in MW and MWh) for energy storage and its respective cost targets (expressed in $/kWh) for balancing and energy arbitrage applications by regions? Key Outcomes Pacific Northwest National Laboratory (PNNL) analyzed a hypothetical 2020 grid scenario in which additional wind power is assumed to be built to meet WECC's 20% renewable energy portfolio standard target. Several models were used to address the three questions, including a stochastic model for estimating the balancing requirements using current and future wind statistics and the statistics of forecasting errors. A detailed engineering model was used to analyze the dispatch of energy storage and fast-ramping generation devices for estimating capacity requirements of energy storage and generation that meet the new balancing requirements. Financial models estimated the life-cycle cost (LCC) of storage and generation systems and included optimal sizing of energy storage and generation to minimize LCC. Finally, a complex utility-grade production cost model was used to perform security constrained unit commitment and optimal power flow for the WECC. Outcome 1: Total Balancing Market in the WECC is Estimated to be 6.32 GW Assuming about 24 GW of Installed Wind Capacity in 2020 The total amount of power capacity for a 20% RPS scenario in the WECC for 2020 would require a total intra-hour balancing capacity of approximately ~6.32 GW. The total market size was estimated for the WECC by NERC sub-regions based on the potential for energy storage in the high-value balancing market. The energy capacity, if provided by energy storage, would be approximately 2.0 GWh, or a storage that could provide power at rated capacity for about 20 minutes. The additional intra-hour balancing capacity that is required to accommodate the variability due to capacity addition in wind technology and load growth from 2011-2020 was estimated to be 1.53 GW. If these additional balancing services were provided by new energy storage technology, the energy capacity would be about 0.58 GWh, or a storage capable of providing electricity at the rated power capacity for about 20 minutes. vi The regional distribution of balancing requirements within the WECC is driven by load forecasting wind prediction errors. Because of the non-homogeneous distribution of the loads and wind across the WECC region, the balancing requirements increase with load and wind capacity. NWPP and Ca...

On optimal participation in the electricity markets of wind power plants with battery energy storage systems

“…Although our results agree with the previous works which find that the overall profit of the VPP increases in day-ahead markets when compared with the WPP, it is also true that that increase is not enough to recover the capital costs of the BESS system. This corroborates the relevance of the secondary reserve market, as has been established by several studies ( [3], [4]). We also show that, contrary to the generalized claim in the literature, the role of imbalances is quite secondary from an economic point of view, representing less than 2.5% of the total incomes when the RM is considered, although they are necessary for the model to get feasibility.…”

“…Moreover, Li-ion is expected to experience the greatest five-year battery capital cost decline (~50%) [2]. There is a general consensus that profits from energy arbitrage are insufficient for achieving capital cost recovery [3]. However, participation in the ancillary services market has recently been proven to be a means for achieving economic viability for a Wind Power +Li-ion BESS facility [4].…”

Profit maximizing storage allocation in power grids

“…References [2], [3], [4] and [5] indicate factors that drive energy storage investment. References [6] and [7] couple energy storage with wind farm operations to reduce forecasting errors and spinning reserve requirements.…”

Addressing the Grand Challenges in Energy Storage

“…[ 4 ] Li-air batteries have received the widest attention. Li-S and Li-air batteries have theoretical specifi c energies of 2600 Wh/kg and up to 12 000 Wh/kg (based on the Li anode), respectively.…”

“…Recently, the DOE sponsored a careful study of the energy storage needs for the western states for intrahour balancing requirements. [ 4 ] This study for the fi rst time quantifi ed the energy storage capacity balancing requirements, Na-S batteries (assuming the safety issue can be overcome) and fl ywheels, pumped hydro and demand-response can be cost competitive today if the whole life cycle cost is considered. [ 4 ] Li-ion batteries and redox fl ow batteries could be cost competitive in the near future with further improvement of the technology.…”