the potential & pitfalls of energy storage in nj · 18/10/2019 · may offer opportunities for...

The Potential & Pitfalls of Energy Storage in NJ

Clint Andrews, Ali Ghofrani, Nathalie Pereira

https://commons.wikimedia.org/wiki/File:Grid_energy_storage_icon.png

• Disclaimer: This presentation reflects our personal views and does not represent an official position of the State of NJ

• New Jersey Energy Storage Analysis (May 2019). Report available at https://www.bpu.state.nj.us/bpu/commercial/energy_storage.html

• Rutgers Team: Mohsen Jafari, Nathalie Pereira, Ali Ghofrani, Glenn Amatucci, Dunbar Birnie, Clinton Andrews, Will Irving, Francis Jordan-Cuebas, JaciTraszka, Kashayar Mahani

https://www.bpu.state.nj.us/bpu/commercial/energy_storage.html

Overview

• Introduction (Clint)

• Technologies (Nathalie)

• Applications (Ali)

• Good bets (Clint)

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Motivation

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Overview






EES Technology Evaluation

• Assessment of wide portfolio of commercially available/near commercially available/next

generation electric ES technologies

⇒ to determine their suitability for grid applications in New Jersey

• Analysis of US and international EES installations

⇒ to address the large spectrum of utility needs & access the most state of the art

Electrical- Mechanical

Pumped Hydro

Flywheel

Compressed Air

Gravitational

Electrochemical

Batteries

High Temp. Batteries

Redox Flow Batteries

Capacitors

Electrical- Thermal

Ice

Pumped Heat

Molten Salt

Electrical- Chemical

Hydrogen Fuel Cell

• Focus on the implementation within New Jersey

scalability, energy and power densities, lifetime, robustness, capital installation

costs, lifetime costs, environmental impact

Data for the economic assessment (Clint)

Data for the ES analytics and network level evaluation (Ali)

Mechanical EES: Pumped hydro storage (PHS)

• PHS currently dominates with 96% of global ES capacity (176 GW) = 169 GW, and 90% in the US

(25.1 GW) = 22.6 GW

• PHS majority (88.5%) of New Jersey’s ES capacity (475 MW) with 420 MW at Yards Creek station

• Mature technology, wide range of application, lowest lifetime cost of installation

• Main concern = lack of suitable geographical sites, especially with conventional design

• Engineering and design developments underway ⇒ advance the technology ⇒ new capabilities, and

by enabling new geographical sites

Yards Creek Station, NJ

Average Installed Costs

PHS

Mechanical EES: Compressed Air ES (CAES)

• CAES only other low cost commercial ES technology able to generate power outputs

>100 MW, in a single unit (like PHS)

• Total global capacity = 450 MW, only two large-scale units located in Germany (290 MW)

and in Alabama (110 MW), but several in –ground units are under contract/construction

• Many applications: frequency and voltage control, load shift, peak shaving, black start

services, variable renewable power sources integration, and transmission and

distribution level investments deferral

• Similar geographical requirements restrictions to PHS

• Developments underway of other geological structures that overcome these constraints


CAES

CAES System Schematic

Electrochemical Energy Storage Evaluation

Electrochemical Energy Storage

Batteries

Non-Aqueous Li-ion

Aqueous

Pb-Acid

Aqueous

Ni-Cd, NiMH

High Temp. Batteries

NaS

ZEBRA

Redox Flow Batteries

Vanadium

Zinc Bromine

Capacitors

EDLC

Hybrid Capacitors

Electrochemical battery storage

power (MW) and energy (MWh)

in the United States between 2013 and 2016

• Electrochemical ES marginally used for grid applications up to 2011

• Although still small in size at 1.9 GW globally and 680 MW in the US, it has become the most rapidly

growing segment since 2015

Batteries: Non-Aqueous Li-ion Batteries

• Li-ion battery technology is the fastest growing technology being implemented today

• Global Li-ion ES capacity is 1.5 GW by the end of 2017

• The largest Li-ion system is the 100 MW/129 MWh system located in Australia

• Decreasing battery and balance of system costs have contributed to the utility systems’ market growth

• In spite of Li-ion systems’ costs decrease, they remain high compared to some competing technologies

• Technology viewed favorably based on its scalability, modularity, short installation times, and its ability to

address a wide range of utility applications from fast response FR to longer-duration peak-shift and

resiliency

• 44.5 MW of Li-ion systems have been installed in New Jersey

Year-over-year decline price and balance of system cost over 2013 to 2022

2013-2018 quarterly energy storage deployment by technology

System cost and price structure

of stationary battery storage

High-Temperature Batteries: Sodium Sulfur (NaS)

• NaS batteries: operation at high temperatures, 270-350°C

• NaS systems manufactured by a single company, NGK Insulators Inc. (Japan), installed

530 MW / 3,700 MWh, over more than 200 sites, globally

• Largest operational system located in Abu Dhabi (UAE), also the “world’s largest Virtual Battery Plant”

rated at 108 MW / 648 MWh

• Wide range of services, especially attractive for long durations and continuous-use applications

• Future cost reduction opportunities, due to the intrinsically very low cost of the chemicals utilized

• Li-ion battery/NaS-battery hybrid systems currently being evaluated:• The long duration NaS battery to stabilize large, slow fluctuations

• While the short-duration Li-ion battery would absorb rapid, small fluctuations

• In addition, NaS provide robustness and durability that Li-ion may lack

NaS battery module componentsSchematics of a basic NaS cell structure

Flow Batteries:

• Emerging flow battery technologies very attractive for large installations :

• their intrinsically cost-effective ability to be scaled into large tanks

• subsequent power system versatility by effectively decoupling power (determined by the size of the

electrodes in the cells) from energy (concentration and volume of the catholytes/anolytes)

• VRFB systems installed/under contract/in construction in 2017 worldwide totaled 264 MW

• China has moved quickly on flow batteries as its 2017 ES policy:

• Requires the deployment of multiple 100 MW-scale VRFB

• 200 MW/800 MWh system is currently under construction in Dalian to be commissioned in 2019

• The 2 MW / 8 MWh in Everett, WA is largest VRFB in the US

• More interest in VRFB for ES in the US, as CellCube has signed an agreement in March 2019 with an

unnamed US based energy asset development company to manufacture up to 100 MW of ES for

deployment in the US


FlowBattery Systems

Vanadium Redox Flow Cell

Electrical Thermal ES (TES): Ice

• Ice TES is a mature technology that results in a peak shifting of energy usage

• Deployed globally, with at least 9.5 MW installed in New Jersey

• Systems configuration can vary, depending on the targeted market

• Centralized systems = large-scale applications, such as district cooling systems,

large industrial plants, combined heat and power plants, and renewable power plants

• Distributed systems = smaller-scale domestic and commercial buildings

• Costs are currently lower than Li-ion storage, BUT can not provide utility services such as

frequency regulation and resiliency

• However, lower costs and risks may make ice TES an attractive approach for adoption

within cities and communities with expanding commercial entities.

Ice TES system schematic

Energy Storage Adoption Roadmap to New Jersey

• Currently total ES in New Jersey amounts to 475 MW

• Major contribution: pumped hydro storage at 420 MW

• Many opportunities for additional ES in New Jersey

• Pumped Hydro Storage:

Lowest lifetime cost and massive scalability (> GW) ⇒ NEEDS: adequate geographical site,

high capital cost, and long construction time

New Jersey: northern sections of the state where geo-topography and abandoned mines

may offer opportunities for pumped hydro storage

• Compressed Air Energy Storage:

Same geo-topography may be advantageous as pumped hydro storage

Would also bring large scalability

• Batteries:

Li-ion current mainstream technology, but also sodium sulfur and flow batteries have many

benefits specifically for longer durations

Flexible, modular, in standalone containers that facilitate deployment and trending towards

mobility (especially for Li-ion)

Can be installed and operational within a few months

• Thermal storage:

Cost-effective peak shifting

Could be an excellent avenue to reduce daytime stresses on the grid in expanding cities

But does not offer added benefits of resiliency and addressing other utility markets

As such, should be part of a strategic ES portfolio

Overview






Technical Analysis of Energy Storage

Technical Analysis Objectives:• Receive technology input

• Roundtrip efficiency• Self discharge• Min/max state of charge• Charge/discharge rates

• Simulation and modeling• Behind the meter applications/EBM• Resiliency• Network level• Bulk level

• Generate outputs for economy study and sensitivity analysis• Different rated capacities• Different durations• Different end uses

TechnologyInput

Modeling Economy study

Case Scenarios

• Different building functionalities for:• Residential• Commercial• Industrial

• Load profiles specifically represented built environment located in NJ and based on NJ weather condition

• Based on real meter data and US DOE reference models for NJ

DOE Reference Model NJ Commercial Facility NJ Industrial FacilityHospital College Fabricated Metal (1 shift)Hotel Fire Station Fabricated Metal (2 shifts)Office Hospital (275 bed) Food ProcessingMidrise Apartment Hospital (450 bed) General ManufacturerSecondary School Middle School PharmaceuticalSupermarket Office Plastic Manufacturer

Pump Station Services

Residential Warehouse

Supermarket

Wastewater Treatment

List of facilities studied

Load profiles

Load profile for the 18 facilities in cooling design day

Distribution level networks

A network level analysis was conducted for three representative distribution network topologies

Applications of ES for Resiliency

ES can mitigate the risk of outage and unserved demand for short and long duration outages.

• Rated capacity and duration of ES play an important role• Sizing depends on the facility’s critical load

ES Revenue Streams at Bulk Level

• ES owners can participate in the wholesale market to generate revenue• Different considerations should be taken into account• Market saturation highly impacts the revenues• ES can serve both for revenue and resiliency (when required)• Arbitrage and frequency regulation markets are lucrative

ES Revenue Streams at Bulk Level

What are the potential locations for ES investment in arbitrage?

NJ average daily LMP variation from 2014 to 2018

What Locations are Best Candidates for ES Resiliency Applications?• Regions prone to high risk of interruption • Remote regions • Sensitive locations

How ES Can Impact PV Investment

• ES can be installed as a centralized asset that serves the whole network and to support PV generation

• ES can also be installed as a distributed asset

PV investment increase by the use of ES as a centralized asset

PV investment increase by the use of ES as a distributed asset within a distribution network

ES at Transmission Level

ES can serve the network to reduce the operation cost of the grid, decrease the peak demand, and displace the load. An optimization model was developed to allocate 600 MW of ES in NJ at county level

ES and Wind Generation Recovery

600 MW of ES supporting OSW during three representative days in heating season.

ES at large capacities can be integrated with renewable energy to recover power generation from renewable resources.

Overview






Cost-Benefit Analysis• Costs (lifetime adjusted costs)

• Upfront capital expenditures (CapEx)

• Lifetime operating and maintenance (O&M) expenditures – set at $10/kW/yr2

• Investment tax credit (ITC) and accelerated depreciation (i.e., offsets to CapEx)

• Change in taxes due to change in net operating costs (i.e., reduction in demand

• charges and energy costs, added O&M costs)

• Benefits (lifetime project benefits)

• Avoided demand charges (used as a proxy for avoided T&D)

• Avoided energy costs

• Frequency regulation revenue

• Arbitrage revenue

• Non-financial benefits

• Value of avoided outages

• Value of net change in emissions (may be negative)

(Benefits – Costs)

Net Present value

Non-Financial Benefits

CO2 SO2 NOx

Peak 1,338 0.66 1.03

Off-Peak

1,254 0.68 0.67

Net 84 -0.02 0.36

Sector $/MWh LostPublic Administration $1,404Services $4,447Finance/Insurance/Real Estate $1,521Trade/Retail $15,096Telco/Utilities $1,638Manufacturing $13,107Construction $14,160Mining $7,958Agriculture $4,213Residential $117

CO2 SO2 NOx

$/lb $0.02 $2.81 $0.77

$/MWh $1.68 -$0.06 $0.28

2018 Marginal Emissions Rates for PJM (lb/MWh)

Value of Avoided Emissions (2018 $ / lb/ emitted)

Avoided Air Pollution Avoided Loss of Load

$1.90/MWh

Bulk Power Applications

Low CapExMid-Range

CapExHigh CapEx

Frequency Regulation (FR) Only

BCR 1.50 1.14 0.92

NPV $515,658,892 $194,227,657 -$127,681,898

Price Arbitrage (AR) Only

BCR 0.68 0.47 0.36

NPV -$231,770,143 -$553,201,378 -$875,110,933

25% FR/75% ARBCR

1.49 1.13

0.91

NPV $494,716,467 $173,285,232 -$148,624,323

Benefit-Cost Ratios and Net Present Value for Deployment of 600 MW of Li-ion Battery Energy Storage for Frequency Regulation and Arbitration BCR and NPV

B/C Ratios are > 1.0 except under high CapEx scenario

Distribution Level Applications

Configuration Net Present Value

Benefit-Cost Ratio

Net Avoided Emissions

Value of Avoided Outages

Centralized with PV

-$1,301,522 0.57 $62,987 $265,133

Decentralized with PV

-$1,030,728 0.67 $77,260 $327,404

Centralized ES Only

-$593,293 0.44 -$16,381 $4,860

Lifetime NPV, BCR, Net Emissions and Value of Avoided Outages Attributable to 1.84 MW of ES for ACE 17-Node Network

B/C Ratios are < 1.0

Customer Level Applications

B/C Ratios are < 1.0

Comparison: ES (Li-Ion Battery) Alone and with PV by Facility Mid-Range Cost and De-Escalation for 2020

Financing GapsCase Low CapEx Mid CapEx High CapEx

Bulk Power B/C Ratio > 1.0 $0 $0 $0

Distribution Level

B/C Ratio < 1.0 Unknown (data on statewide distribution capacity constraints is not available)

Customer Level

BCR+Avoided-Outage-Value-Weighted Distribution of 600 MW Across 6 Facility Types Total NPV and Value of Avoided Outages.

Standalone ES

NPV -$430,457,532 -$751,853,160 -$1,073,744,978


$112,813,027 $112,598,924 $112,492,485

ES with PV NPV -$140,330,970 -$395,957,985 -$652,147,660


$104,598,197 $104,906,990 $105,061,798

Conclusions

• Pumped hydro and thermal storage are currently cost-effective.

• Li-ion battery storage costs are dropping rapidly.• Currently cost-effective in providing ancillary services for the bulk

power market. • Not yet cost-effective for distribution & customer level applications.

• As cost drop, good bets include grid stabilization for offshore wind projects and electric vehicle charging stations.

• Incentives of about $140-$650 million are likely needed to get 600 MW of customer-level applications such as increasing resilience in combination with solar PV at hospitals, hotels & supermarkets. Deploying systems more slowly will cost less.

Thanks!

New Jersey Energy Storage Analysis (May 2019). Report available at https://www.bpu.state.nj.us/bpu/commercial/energy_storage.html

https://www.bpu.state.nj.us/bpu/commercial/energy_storage.html

the potential & pitfalls of energy storage in nj · 18/10/2019 · may offer opportunities for...

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