INTEGRATION OF STORAGE DEVICES INTO POWER SYSTEMS WITH RENEWABLE ENERGY SOURCES

1. INTEGRATION OF STORAGE DEVICES INTO POWER SYSTEMS WITH RENEWABLE ENERGY SOURCES George Gross University of Illinois at Urbana-Champaign presented at the PAP Annual Meeting I Hotel, Champaign, IL May 14, 2010 © 2010 George Gross, University of Illinois at Urbana-Champaign, All Rights Reserved

2. PROJECT OVERVIEW • Development of models and simulation methodo-logy for the analysis of storage integration impacts on the transmission-constrained electricity markets over longer-term periods • Assessment of storage as a system resource that providesflexibility in managing renewable energy intermittency impacts, improves reliability and is able to provide energy- and capacity-based ancillary services

3. OUTLINE • Background and motivation • Project objectives and scope • Nature of the proposed approach • Tasks and project scope • Benefits • Summary

4. RPS STATUS ME: 30% x 2000 New RE: 10% x 2017 VT: (1) RE meets any increase in retail sales x 2012; (2) 20% RE & CHP x 2017 WA: 15% x 2020* MN: 25% x 2025 (Xcel: 30% x 2020) MT: 15% x 2015 NH: 23.8% x 2025 MI: 10% + 1,100 MW x 2015* MA: 22.1% x 2020 New RE: 15% x 2020(+1% annually thereafter) ND: 10% x 2015 OR: 25% x 2025(large utilities)* 5% - 10% x 2025 (smaller utilities) WI: Varies by utility; 10% x 2015 statewide SD: 10% x 2015 RI: 16% x 2020 NY: 29% x 2015 CT: 23% x 2020 NV: 25% x 2025* IA: 105 MW OH: 25% x 2025† PA: ~18% x 2021† CO: 30% by 2020(IOUs) 10% by 2020 (co-ops & large munis)* WV: 25% x 2025*† IL: 25% x 2025 NJ: 22.5% x 2021 CA: 33% x 2020 KS: 20% x 2020 UT: 20% by 2025* VA: 15% x 2025* MD: 20% x 2022 MO: 15% x 2021 DE: 20% x 2020* AZ: 15% x 2025 DC NC: 12.5% x 2021(IOUs) 10% x 2018 (co-ops & munis) DC: 20% x 2020 NM: 20% x 2020(IOUs) 10% x 2020 (co-ops) TX: 5,880 MW x 2015 HI: 40% x 2030 29 states + DC have an RPS (6 states have goals) State renewable portfolio standard Minimum solar or customer-sited requirement * State renewable portfolio goal Extra credit for solar or customer-sited renewables † Solar water heating eligible Includes non-renewable alternative resources 4 Source: www.dsireusa.org / April 2010

5. 2003 – 09 GLOBAL WIND CAPACITY 160 150 140 130 120 26,669 37,349 110 19,989 100 90 15,042 thousands of MW 80 11,471 70 60 8,189 50 40 30 20 10 0 2004 2006 2005 2007 2008 2003 2009 Source: GWEC, http://www.gwec.net/fileadmin/documents/PressReleases/PR_2010/Annex%20stats%20PR%202009.pdf

6. PV CAPACITY ADDITIONS (MW) MW Source: SEIA- US Solar Industry Year in Review, 2009 Residential Non- residential Utility p = preliminary

7. RPS SOLICITATIONS RESPONSE Renewable Energy Offers in IOU Solicitations energy (TWh) / year solicitation year

8. CAISO: DEMAND RESPONSE FOR PEAK SHAVING June 20, 2008 peak 46,775 MW MW

9. CAISO DAILY WIND PATTERNS MW 700 600 500 400 300 200 100 0 hour Source: CAISO

10. PV POWER OUTPUT OF 1 - MWCdTe ARRAY IN GERMANY 1000 900 800 700 600 500 kW 400 300 200 100 0 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 samples collected on a 5 – minute basis

11. PV POWER OUTPUT AT THE NEVADA 70kW POLYCRYSTALLINE ARRAY 80 70 60 50 40 kW 30 20 10 0 6:00 7:00 8:00 9:00 11:00 12:00 13:00 10:00 14:00 16:00 15:00 17:00 18:00 19:00 data collected on a 10 – second basis

12. LACK OF STORAGE CAPACITY • The lack of utility-scale storage in today’s power system drives • electricity production to be the prototypical just-in-time manufacturing system; and • electricity to be a highly perishable commodity • Storage capacity is primarily in the pumped storage plants; there are only two operationalCAES units in the world • Pace of energy storage development has been very slow in the past

13. NEW TECHNOLOGY PUSH IN ENERGY STORAGE • Recent developments in storage technology are important in facilitating the integration of renewable energy resources and in improved management of their intermittencyeffects • There are various signs indicating the wider deployment of storage, both as a distributed energy resource and as a system resource • Key developments are in areas that include CAES, flywheels, battery vehicles and utility-scale batteries

14. STORAGE TECHNOLOGY ADVANCES Lead-Acid Batteries CAES Plug-in Hybrids flywheels

15. ENERGY STORAGE DEVICES NaSBattery Pumped storage Flywheel Lead-Acid Battery CAES Ni-CdBattery SMES Li-ion Battery increasing energy increasing power Source: Electricity Storage Association

16. INSTALLED ENERGY STORAGE TECHNOLOGY RATINGS discharge time (hr) rated power (MW) Source: Electricity Storage Association

17. ESTIMATES OF CAPITAL COSTS FOR ENERGY STORAGE TECHNOLOGY Source: Dan Rastler, “The Electric Storage Landscape: Renewables Integration and Smart Grid,” presented at Platts Power Storage Conference, January 15-16, 2009 17

18. DEMAND RESPONSE AND ENERGY STORAGE DEPLOYMENT peak 5% about 2,500 MW occurs less than 50 hours per year demand response MW CAISO LDC peak 25% of capacity occurs less than 10% of the time energy storage hours per year

19. BENEFITS OF GRID-INTEGRATED STORAGE DEVICES • System operations: • flexibility to mitigate the effects of variable renewable energy sources; • effective resource in various contingencies; and • provision of energy- and capacity-based ancillary services • System planning and investment: • deferral of need for specific transmission improvements;

20. BENEFITS OF GRID-INTEGRATED STORAGE DEVICES • deferral of investments in new generation resources; and • improvement in system reliability • Demand response resource (DRR) deployment: • enhancement in the DRR responsiveness and dependability in electricity markets; and • improvement in the DRR provision of ancillary services

21. KEY IMPACTS OF FEDERAL LEGISLATION ON STORAGE • The 2007 Energy Independence and Security Act led to the issue of a report by the US Department of Energy with wide-ranging impacts on storage • The 2009 American Recovery and Reinvestment Act explicitly recognizes the significant effect of storage on electric system and the stimulus package includes substantial provisions for battery research and manufacturing as well as matching funds for storage demonstration projects

22. MOTIVATION FOR THE PROJECT • In order to take advantage of the increased flexi-bility imparted by the grid-integrated storage devices, we need to develop appropriate models, methodologies, tools and policy initiatives • These needs pertain to all the domains: • planning and investment analysis; • policy analysis; • operations; and • market performance

23. PROJECT GOALS • Develop appropriate models and methodologies in the area of planning, investment and policy analysis by developing a comprehensive simulation methodology which allows • the quantification of the variable effects of large-scale power systems incorporating storage devices, intermittent renewable and controllable demand resources • assessment of the economics and the reliability

24. PROJECT GOALS impacts of the storage device deployment on power systems • Demonstrate the application of the methodology to various studies, including • justification for investment in storage devices; • formulation of effective storage device deployment strategies; and • analysis of different policies and their impacts on power systems and markets

25. PROJECT SCOPE • The project focuses on the development of a practical simulation methodology for evaluating storage integration impacts on the transmission-constrained electricity markets over longer-term periods • The perspective is from the vantage point of deploying a storage device as a system resource • Key emphasis is on the effective representation of the operation of the storage device in conjunction with intermittent renewable resources and controllable DRRs

26. ANTICIPATED OUTCOMES • Practical simulation methodology for evaluating the variable effects of storage integration on the performance of the transmission constrained electricity markets over longer-term periods • Demonstration and illustrative examples of its application to planning studies and policy formulation • Case studies to quantify the economically efficient and effective utilization of storage devices in the grid

27. THE PROPOSED APPROACH • Construction of a framework that can accommo-date the transmission-constrained market structure and be able to evaluate the expected production costs and reliability metrics for power systems with intermittent and storage resources • The methodology makes effective use of probabi-listic simulation concepts, Monte Carlo simulation methods with systematic sampling techniques and snapshot-based analytical approaches

28. TASK 1 : REPRESENTATION OF GRID- SCALE STORAGE DEVICES • Identification of salient physical characteristics of storage technology and key constraints and considerations that need to be represented in the integration of storage devices into the grid • Determination of the level of detail required in the representation of the identified characteristics, the considerations and the constraints for simulation purposes • Explicit representation of the uncertainty associated with storage devices and deployment

29. TASK 2: MODELING OF STORAGE DEVICES • Construction of the models that appropriately represent the storage devices, including • the uncertainty associated with their use • their economic characteristics • their interactions with other generation resources and loads with special emphasis on intermittent resources • the operational issues in their “dispatch” • The effective integration of the models for simulation purposes

30. TASK 3: DESIGN OF SIMULATION METHODOLOGY • Development of the proposed simulation approach for systems with storage, renewable and other time-dependent resources ensuring • adequate level of detail in system emulation • explicit representation of transmission-constrained markets, seasonality effects, maintenance schedules and policy issues • Study of key implementational aspects to ensure computational tractability for large-scale system applications over longer-term periods

31. TASK 4: STORAGE INTEGRATION SOFTWARE DEVELOPMENT • Development a prototype software tool that implements the proposed simulation methodology • Investigation of the integration of the software with some of the existing planning and operations tools

32. TASK 5: STORAGE INTEGRATION OPTIMIZATION • Development of tools for the optimal deployment of storage technology with the ability to • ensure efficient operation of integrated storage devices • select appropriate technology, determine its siting and specify its utilization • Study the effective deployment of storage devices for improving system reliability

33. TASK 6: CASE STUDIES • Formulation of various application studies to demonstrate the capabilities of the proposed methodology in the analysis of planning, investment and transmission utilization issues • Extensive parametric and sensitivity studies to determine the benefits of storage integration in large-scale systems, including those with deep penetration of renewable resources • Optimization studies for the specification of optimal storage size and the assessment of the trade-offs between system reliability and the size of storage devices

34. TASK 7: POLICY ANALYSIS • Analysis of regulatory policy issues • Formulation of appropriate incentives for facilitating the orchestration of storage deployment in large-scale systems • Study of the appropriate regulatory treatment of storage as a system resource for generation and transmission enhancement

35. PROJECT SCHEDULE 35

36. PROJECT BENEFITS • The comprehensiveness of the proposed methodology will provide ISOs and their members as well as vendors the ability to • simulate the behavior of power systems with integrated intermittent renewable resources and storage devices over longer periods • quantify economic and reliability impacts • plan new investments in generation as well as transmission to improve/add resources to the existing network

37. PROJECT BENEFITS • The project will provide demonstration of the ability to determine the optimal benefits of energy storage deployment through • the effective integration of renewable energy resources in large-scale power systems • the reduction in emissions • the ability for vendors to configure storage into existing systems with the attainable improvements in the operation of power systems effectively quantified

38. SUMMARY OF PROJECT CONTRIBUTIONS • Development of a practically-oriented methodolo-gy for simulation of large-scale systems over longer-term periods • Comprehensive and versatile approach for the quantification of the impacts of the integration of storage devices into power systems with deepening penetration of renewable resources • Demonstration of the capabilities of the proposed approach to a broad range of planning, investment, transmission utilization and policy analysis studies