batteries and energy storage - tucson electric power© 2016 electric power research institute, inc....

© 2016 Electric Power Research Institute, Inc. All rights reserved.

Haresh Kamath

Senior Program Manager,

Energy Storage and Distributed Generation

Presentation to Tucson Electric Power

November 2, 2016

Batteries and

Energy Storage:Looking Past the Hype

2© 2016 Electric Power Research Institute, Inc. All rights reserved.

Together…Shaping the Future of Electricity

EPRI’s Mission

Advancing safe, reliable,

affordable and environmentally

responsible electricity for society

through global collaboration,

thought leadership and science

& technology innovation


Tesla PowerWall 2

Home Battery

Briefing objective: With no hype on the technology, provide realistic projections on

application and market outlook

“…[the] solar generation/battery storage

combination is currently an order of

magnitude too expensive to cause much

grid defection.”

- Moody’s Investor Service, “Batteries are

Coming but Utilities are not Going Away”

January 6, 2015

“Improvements in batteries and

distributed generation could partly or

completely eliminate some customers’

usage of the power grid…”

- Morgan Stanley Blue Paper,

Solar Power & Energy Storage

July 28, 2014

The Growing Interest in Energy Storage

Courte

sy T

esla

Moto

rs, In

c.


Moving beyond the hype cycle…

Understanding the facts will help us to move beyond the peak of the hype cycle

Bulk Energy

Storage

Distribution

Energy Storage

Behind-the-Meter

Energy Storage

The Gartner Hype CurveMicrogrids

Natural Gas

Distributed

Generation


What can storage do?

Transmission Level

– Ancillary Services Frequency

Regulation

– Renewable Shifting/Smoothing

– Voltage/ Reactive Power Support

– Capacity/Congestion relief

– Deferral of transmission upgrades

– Deferral of peaking plant

installation/operation

Distribution Level

– PV Shifting/Smoothing

– Increase PV accommodation

– Power Quality improvement

– Deferral of distribution upgrades

– Demand charge avoidance

– Assist in many Transmission

applications on an aggregated

basis

Frequency Regulation

Renewables Shifting/Smoothing

Power Quality improvement

Deferral of transmission upgrades

Deferral of peaker installation/operation

Storage is a key element in enabling 2 way power flow in the grid – some technologies can do it all some are limited


The historical challenges are being overcome

0

500

1000

1500

2000

2500

Lead-Acid

(2012)

Li Ion

(2015)

Target

(2020)

$/k

W

Installed Cost

0

100

200

300

400

500

600

700

800

Lead-Acid

(2012)

Li Ion

(2015)

Target

(2020)

$/k

W-y

r

Operating Costs

0

2000

4000

6000

8000

10000

12000

Lead-Acid

(2012)

Li Ion

(2015)

Target

(2020)

Me

an C

ycle

s b

efo

re F

ailu

re

Cycle Life

60%

80%

100%

Lead-Acid (2012)

Li Ion (2015)

Target (2020)

Effi

cie

ncy

Round Trip Efficiency

T&D Upgrade

Deferral

Costs of

Storage Potential Benefits of Storage

Power Quality

and

Reliability

Regulation

Services

Demand Peak

Reduction

For Illustration Only

Generation Transmission &

Distribution

Load

Advanced Technologies

Lower costs New Business Models

Lithium Ion Battery Cost

$0

$5,000

$10,000

$15,000

$20,000

0 500,000 1,000,000 1,500,000 2,000,000

Worldwide Vehicle Battery Production Capacity (packs/yr)

Veh

icle

Batt

ery

Pa

ck

Co

st

RegulatoryRulings

LegislativeAction

• Technical challenges

• Performance

• Life

• Efficiency

• Economic Challenges

• High Costs

• Small Value Streams

• Regulatory Challenges

• Lack of clear definition

• Framework designedfor existing grid


-

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

450.0

MW

Cumulative Battery Storage Deployments by Technology (MW)

Since 2013

Lithium Ion Lead Acid Sodium Chemistries

Flow - Vanadium Flow - Zinc Other

Deployment of stationary storage continues

Investment is still relatively small

but rapidly growing

– Storage to provide ancillary services

in energy markets is the largest

market

– Utilities are exploring options at the

transmission and distribution level

– Developers are installing systems on

the customer side of the meter

Many if not most installations are

at the demonstration / pilot phase

– Benefits are understood, but

monetization can be difficult

Note dominance of lithium ion

battery in deploymentsSource: GreenTech Research

AES 36 MW storage

in West Virginia

Duke 400 kW storage

in North Carolina

Chevron 2MW storage

in California

So

urc

e: A

ES

So

urc

e: D

uke

En

erg

y

So

urc

e: E

PR

I


EPRI 2015 Energy Storage Cost Estimates – Distributed & Bulk Technologies

Storage Cost Estimates

* Pumped Hydro and CAES costs are estimated installed costs; all others are battery costs (not including power conversion or balance of plant)

Broad future

reduction in

cost seen for Li

Ion Batteries

Newer

technologies face

scaling challenges

– cost targets rely

on high

manufacturing

output

Very large, mature systems with

large capital requirements


Lithium ion battery prices continue to fall…

100

200

300

400

500

600

700

800

900

2010 2015 2020 2025

Veh

icle

Ba

tter

y C

ost

s

($/k

Wh

)

Year

2010-2020 Vehicle Lithium-Ion Battery Cost Projections

Sharp drop in prices in late 2015!

Source: EPRI Estimates, 2016


Lithium Ion Technology Outlook

$180-$225/kW $100-$120/kW

$2,000-$2,500

$200-$250/kW

Projected Capital Cost 2015 2020

Cell

Battery Pack

Residential

ES System

11.5 W for 1 hour

10 kW for 1 hour (dc power)

10 kW for 1 hour (ac power)

$1000-$1200/kW

$10,000-$12,000 $5,000-$6,000

$350-$500/kW

$3,500-$5,000

$500-$600/kW

$1.15-$1.40$2.00-$2.50

Costs can differ significantly at the cell, battery pack, and complete system levels


Disposal

Battery Replacement

Operations and Maintenance

Installation

Auxiliary Equipment

Power Electronics

Battery

Lithium Ion Residential System Cost Breakdown

Cost Breakdown for a Residential

Lithium Ion Battery System

250

200

150

100

50

0

Installed system cost

can easily be 2 or 3

times the battery cost

Lifecycle cost

(including battery

replacement, O&M,

and disposal costs)

could be close to

twice the installed

system cost




Residential

ES System


$1000-$1200/kW

$10,000-$12,000 $5,000-$6,000

$2,000-$2,500

$200-$250/kWBattery Pack

10 kW for 1 hour (dc power)

$350-$500/kW

$3,500-$5,000

$500-$600/kW

$180-$225/kW $100-$120/kWCell

11.5 W for 1 hour

$1.15-$1.40$2.00-$2.50

Residential

ES System


$1000-$1200/kW

$500-$600/kW

$800-$1000/kW

$350-$500/kW

Utility Scale

ES System

10 MW for 1 hour (ac power)

Gas Turbine

$900-$1050/kW

$850-$1050/kW


For 1 hour




Residential

ES System


$3200-$4000/kW

$1400-$2000/kW

Utility Scale

ES System


Gas Turbine

$900-$1050/kW

$850-$1050/kW


For 4 hours

$4000-$4800/kW

$2000-$2400/kW


Example for illustration only

The Case for Behind-the-Meter Storage in California

The business case presently relies heavily on federal and state incentives

Policy Incentives

Ancillary Services Revenue

Demand Charge Reduction

PV Energy Shift

Reliability Value to Owner

Installed Cost of Storage

O&M Cost

COST REVENUE


Addressing the Remaining Challenges to Storage

Costs and performance factors of technology solutions must be better understood

Tools for understanding the value and grid impacts of storage are being developed

Ensuring that storage technology solutions are safe, secure, reliable, affordable, and practical

Create best practices for deployment, integration, operations, maintenance, and disposal

Integrate storage technology into utility planning and operations processes to improve reliability and reduce costs


Key Takeaways

Energy storage is potentially a game-changer: Low-cost batteries and other energy storage technologies may transform the grid, making it more flexible and more resilient, improving reliability and enabling more renewable penetration

Technology and costs for storage are improving significantly: Widespread adoption of energy storage technologies on the grid is likely to happen in the next 10 years. Much of this deployment may be sited at commercial and industrial customers.

There are still many technical and economic challenges to energy storage: While the technology is now possible, there are still many questions that must be addressed to ensure that storage is a safe, reliable, and cost-effective solution.

Utilities are well-positioned to be integrally involved in storage adoption:While storage is sometimes considered a “disruptive technology” that may lead consumers towards islanded solutions, storage is most valuable as part of an energy network. It is far more likely that storage will be used to augment traditional grid solutions, rather than to replace them.


Together…Shaping the Future of Electricity

batteries and energy storage - tucson electric power© 2016 electric power research institute, inc....

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