Thursday, October 31, 2013

420 Energy Storage Projects

The government has done something right!  In contrast to the Obamacare website debacle, the DOE has provided a website that provides extensive and useful information on large scale electric storage projects.

The recent press release states,

" The Energy Storage Database lists 420 energy storage projects from 34 countries with a combined 123GW of installed capacity. More than 50 energy storage technologies are represented worldwide, including multiple battery technologies, compressed air energy storage, flywheels, gravel energy storage, hydrogen energy storage, pumped hydroelectric, superconducting magnetic energy storage, and thermal energy storage. The policy section of the database shows 18 federal and state policies addressing grid connected energy storage, from rules and regulations to tariffs and other financial incentives."

I've referred to in the past and used it to track storage projects.  It's been useful to weed out the "vaporware" projects, like the Obama Stimulus Ashlawn project (not in the database) from the real projects.  You can find our vanadium flow battery project at Gills Onions here.

It's a good resource - use it!

Wednesday, May 22, 2013

Utility Approach to Energy Storage

Energy storage is a strange duck for utilities.  Is it load or generation?  What box should it be in and what should be required from an end customer that wants to install energy storage on-site?

The California Public Utilities Commission is trying to shed some light on the problem for utilities in the current Order Instituting Rulemaking (OIR) to implement Assembly Bill 2514, setting procurement targets for storage, R1012007.  However, there are no current guidelines for interconnection.  As a result, the utility engineers are struggling to understand how to incorporate storage systems on the local distribution line.

AES has highlighted this issue with their argument that storage is both load and generation.  John Zahurancik, VP at AES Energy Storage, recently presented a webinar with Navigant Research and made the point that a 2 MW storage system is actually a 4 MW resource because it can cycle over 2 MW "down" from a set point (charging) and 2 MW "up" (discharging).  The comparison is against a typical generator that would need to be sized at 4 MW to move 2 MW up and down.

US&R is currently working to install a 2 MW, 2 hour (4 MWH) system in Southern California Edison territory and we are working through these real-world issues.  The system is being installed under the Self Generation Incentive Rebate program and the rebate requirements rule out the export of power.  However, the utility engineers reviewing the interconnection believe they must account for the possibility of 2 MW of generator export.  In addition  they want to classify it as "intermittent" generation, like solar PV or wind.  Of course, this approach is completely opposite to the often discussed "smoothing" benefits of storage.  I feel for the engineers that must evaluate such a new technology under the existing "old" criteria, but storage is a disruptive technology and implementation requires new methods of evaluation.  After several years of planning, PG&E recently announced a 4 MW system has been installed at HGST, Inc., in San Jose.  Although not behind the meter, we hope that installations like this will lead to a more informed and facilitative approach by the utilities.

Tuesday, November 29, 2011

California Energy Incentives - Shot-in-the-Foot

When is a rebate not a rebate?  When the California Public Utilities Commission (CPUC) offers a rebate, then takes it back if the California Energy Commission offers a grant.

Some people think there are too many energy agencies in California.  This may be an example of how the mission of one agency can be derailed by another.

Our firm recently considered applying for a grant through the California Energy Commission PIER (Public Interest Energy Research) program.  PIER offered a grant under their Emerging Technology Demonstration Grant Program (ETDG), which specifically targets Industrial, Agriculture & Water Energy Efficiency RD&D.  Without going into great detail, the grant would fund, among other things, customer side energy storage applications up to $2 million with applicant match funding of at least 25% of the project cost.

The CPUC offers a rebate of $2 Watt for customer side energy storage.  The CEC published a Q&A on the PIER grant advising that SGIP funds could be used for matching funds.  Fantastic!  This meant we could install a 1 MW energy storage system, which are expensive due to a lack of scale, and report on the multiple applications and monetary benefits, like power quality improvement, demand response, peak shaving, integration and shaping of the intermittent on-site solar PV, and CAISO ancillary services.  Southern California Edison issued a white paper on the applications of energy storage on their system, and we wanted to demonstrate several of their applications, such as:

On-peak intermittent energy smoothing & shaping
Ancillary service provision
End user time-of-use rate optimization
Peak load shifting downstream of distribution system
Variable distributed generation integration

Our work would help inform the CPUC for their current proceeding to, "...set policy for California utilities to consider the procurement of viable and cost-effective energy storage systems".

However, just as it looked like the energy policy and incentives in California were going to allow for a significant project with wide-ranging benefits - the CPUC informed us that they would reduce the SGIP rebate for the installation on a dollar for dollar basis if we received CEC grant money for R&D and reporting!

So California energy policy shoots itself in the foot.  We cannot do the PIER research and reporting if we want to accept the SGIP for installation.  Who is in charge?  A program designed to help the CPUC form policy has been foiled by the CPUC.  Can anyone explain this?

Thursday, September 22, 2011

Rebates Extended for Energy Storage in California

Today, Jerry Brown, Governor of California, will sign AB 1150 into law.  This bill increases the funds available for the Self Generation Incentive Program (SGIP) rebates.  These rebates have helped fund distributed storage projects in California and have been extended to include Energy Storage.  After many delays and changes in the SGIP program, these additional funds, plus the recent final ruling by the CPUC, will allow for substantial installations of energy storage.

US&R has participated directly and indirectly in all of the 8 MW's of energy storage projects that have applied for funding under the SGIP.  None have yet come to fruition, although some are still in process.  The main stumbling block to progress on these projects has been the constantly changing rules applied to the program.  US&R worked with VRB Power and Strategen to open the SGIP to energy storage. This was a process that took several years and occurred against a backdrop of changing legislation affecting the SGIP.  In late 2008, the CPUC finally agreed that energy storage could claim the SGIP, but only if "associated" with a fuel cell or wind turbine installation.

However, shortly after several projects began to come together, Strategen, on behalf of the newly formed California Energy Storage Alliance, filed an action with the California Public Utilities Commission (CPUC) to loosen the definition and technical requirements for energy storage.  That dragged on for months.  All projects were put on hold until developers, vendors and customers could be sure that their installation would qualify.  A decision was finally rendered that did little to make the rebate available to a wider range of technologies, but it did impose metering and verification requirements that were not required of any other technology.  Projects began to move forward again - but then the CPUC called a halt to any and all applications for the SGIP in December 2011.

It seemed that certain manufacturers (Bloom Energy) were reserving funds at an alarming rate.  The concern was that the funds would be depleted before the CPUC could agree on another revision to the eligibility requirements required by legislation in SB 412.

However, the final ruling by the CPUC has expanded the options for energy storage, reflecting the intent of prior legislation and AB 1150,
     "It is the intent of the Legislature that the self-generation incentive program increase deployment of distributed generation and energy storage system..."

US&R is actively developing energy storage projects for on-site applications at industrial and commercial end-users.  Please contact us if you are interested in on-site energy storage for your facility, solar PV, fuel cell or wind project.

Thursday, August 18, 2011

CPUC Revamp Trying to Kill Advanced Energy Storage?

The California Public Utility Commission (CPUC) is revamping the rules for the Self Generation Incentive Program (SGIP) with a major, and completely inappropriate, performance requirement for Advanced Energy Storage.

The SGIP provides rebates for various on-site distributed energy resources (DER).  Energy Storage was added to the list of DER's several years ago after much work by VRB Energy (the former manufacturer of the VRB-ESS® now made by Prudent EnergyStrategen and Utility Savings & Refund, LLC (US&R).    One requirement of a qualifying Advanced Energy Storage system (AES) was the ability to provide at least 4 hours of energy and be capable of hundreds of daily charge and discharge cycles.  Strategen, representing the California Energy Storage Alliance (CESA), later tried to ease these performance requirements to a single charge-discharge cycle once every three days.  The CPUC relaxed the cycling requirement for fuel cell applications but retained the 100's of cycles performance for wind applications.  In addition, the CPUC required metering for energy storage to record performance - which was not required for other technologies.

However, the CPUC never required the AES to cycle every day or otherwise "perform" to certain criteria, simply to be able to perform.  This was important for the application of AES to the specific on-site load profile of an end-user and the applicable utility tariffs.  For example, if the facility was closed on the weekend, then it would be pointless to charge and discharge the AES during the weekend.  However, if the electric load was widely variable during the day, then the ability to partially charge and discharge repeatedly would help the facility smooth out its load profile and avoid increasing it's demand on the utility system.

The CPUC has been criticized for funding many projects under the SGIP that produced little electric generation, some being abandoned shortly after installation, so they've decided to condition part of the funding on performance (see pg 32 and 68 of the draft).  That may make sense for a traditional generator, like cogen or solar, but is completely inappropriate for storage.  Energy storage "stores" energy, it does not "generate".  Some energy is lost in the charge - discharge process, which is not important if electricity is being shifted from a lower value time period to a higher value period - like a summer night to a summer hot day.

The CPUC is now requiring a 20% capacity factor for storage, which essentially means it must average a discharge of 4.8 hours per day (24 hours per day * 20% = 4.8 hours).This is a major performance change for storage and may further discourage AES installations.  Not only has the performance standard been increased 20% from 4 hours to 4.8 hours of electricity, but cycling every day would cause the installation to lose money.  For example, the E-20 industrial tariff for PG&E has a kWhr charge of $.078 at night and $.087 during the day.  Assuming 70% efficiency for the charge cycle, comparable to pumped hydro, The AES would need 10 kWhrs of electricity at night ($.78) to deliver 7 kWhrs during the day ($.609). This results in a loss of -$.017 per kWhr delivered!

An arbitray performance standard like this disincentivizes AES installations.  Without the imposed standard, the end user will optimize the AES to reduce utility bill demand charges, summer on-peak kWhr costs, improve power quality and reliability, and make the AES available for other grid support services.  Requiring daily cycles, in excess of current capacity requirements, will impose additional costs on the installation and require the AES to be operated nearly half the 24 hour cycle (charge and discharge), thus reducing its availability for other valuable grid services such as demand response or emergency power.

The CPUC haslong  recognized AES as a valuable DER that needs to be encouraged, but imposing new and costly additional requirements will not encourage new installations and may kill-off the necessary demonstration and pilot projects the SGIP is meant to encourage.

Wednesday, July 20, 2011

CPUC Issues Rebate Revamp for Storage

Well, they've done it. After much delay, the California Public Utilities Commission (CPUC) has finally issued their draft decision in Rulemaking 10-05-004 to modify the Self Generation Incentive Program (SGIP) and the rebates available for Advanced Energy Storage (AES).

The California SGIP program was originally based on state legislation designed to reduce peak energy demand. SGIP rebates were made available to many variations of on-site generation, including solar and natural gas co-generation. Subsequent legislation significantly altered the program, limiting rebates to wind and fuel cell projects. US&R successfully worked with VRB Power, Inc. and Strategen to include rebates for AES. US&R helped develop over 32 MWH of SGIP eligible projects in 2010.

However, recent legislation, SB 412 (2009), required a makeover of the program, basing incentives on green house gas (GHG) reductions instead of reducing peak demand. In addition, certain fuel cell developers, utilizing off-site bio-gas, began to monopolize the program. This resulted in a complete suspension of the program December 2010 until the new rules could be implemented.

The recent decision will be subject to further comments and workshops before it becomes final. We cannot know when new applications will be accepted, but we hope it will be soon. Here are the key points affecting AES:
  1. Energy storage will still be an eligible technology in spite of some efforts to disqualify it based on no GHG reductions.
  2. In addition, the draft decision will incentivize stand alone installations. The original program required AES to be associated with fuel cells or wind. This will remove that restriction.
  3. The incentive will remain at $2 per Watt = $2,000 kW. Other technologies have had their incentives reduced, but storage will retain their previous incentive level.
  4. Measurement and verification will increased, but the extent and cost will be determined in subsequent workshops.
  5. Size limit restrictions have been lifted. Incentives are based on the first 3 MW of capacity, but installations over 5 MW had been disqualified entirely. That will no longer apply.
  6. Generation will be allowed to be exported, with up to 25% not used on-site.
  7. Substantial application fees will be required.
  8. The SGIP incentive cannot pay for more than 30% of project cost - unless the project is ineligible for a tax credit.
  9. Energy efficiency audits will be required - although the project will not be required to implement any recommendations.
  10. Payment of the SGIP will no longer be 100% upon completion of the project. Instead, only 50% will be paid up front, with the remainder paid over 5 years based on kWh production. A capacity factor of 20% will be used for AES.
These are substantial changes for the SGIP program. We will be tracking and reporting on the final revisions.

Friday, May 13, 2011

CESA v. Itron, How Hard is it to Put Energy Storage in a Box?

The California Public Utilities Commission hired Itron, Inc. to prepare a report on the “Cost-Effectiveness of Distributed Generation Technologies” as part of their on-going project to revise the Self Generation Incentive Program, which has provided rebates for energy storage installations. According to the California Energy Storage Alliance (CESA), they got it completely wrong when it comes to energy storage.

Legislation funding and defining the SGIP was changed by California Senate Bill 412 (SB412), and that has thrown a monkey-wrench into the program. (History of the SGIP program here...) US&R worked with VRB Power Systems, Inc. to open the SGIP for energy storage in 2008. Challenges to the energy storage provisions, the demise of VRB Power and subsequent purchase by Prudent Energy, and the ARRA stimulus program confused implementation, but things finally started to role in 2010 as the Gills Onions project was announced, and at least 5 energy storage projects were approved for the SGIP. However, the new legislation required the CPUC to revise and open the program to additional technologies, and all new applications were suspended to prevent the existing funds from being depleted before the CPUC finished their work.

The Itron report was supposed to provide a basis for evaluation. However, an analysis is only as good as it's assumptions, and Itron created a false energy storage straw man for evaluation, leading to cost effectiveness conclusions that severely reduced the apparent value of energy storage for SGIP incentives.

Some of the points made by CESA in their filing to the CPUC:
  • "...the Itron Report incorrectly assumes that Li-ion technology, one specific type of electrochemical battery storage technology, is representative of all energy storage technologies. This is done even though the Itron Report itself says that advanced lead acid, Zn/Br flow batteries and emerging Zn/air and Fe/Cr were generally found to have potential for low capital expenditure and the smallest gaps to support the energy storage business case. The Itron Report also arbitrarily and inexplicably assumes that Li-ion is a good match for an application that requires a four-hour duration for load shifting purposes."
  • "Generally speaking, however, Li-ion is not the most cost-effective solution for long duration, multi-hour peak shifting, nor are Li-ion’s relatively minor volumetric advantages particularly needed for grid storage applications."
  • Also, "The discussion of energy storage in the Itron Report makes it painfully clear that the report’s authors failed to understand the sources of value that would truly compensate system owners for their investment in grid connected energy storage. The Itron model does not simulate the way a storage system owner would operate the system in real-world scenarios. Such projects would rely entirely on electric bill savings results from shifting consumption of electricity from peak to off-peak periods, customer demand charge savings, and the SGIP incentive itself."
Essentially, CESA points out that the SGIP is used to incentivize customer installations. However, Itron used an energy storage technology currently being deployed, with good success, at utility scale, and for applications (frequency regulation) that are irrelevant for the end-user.

The SGIP revision process, which began in January 2010, now appears to be stuck in a quagmire of expensive consultant reports that are trying to compare apples to bananas, and not just energy storage bananas. In the meantime, projects that could be addressing the peak load management objectives of the program are stalled while the consultants fight over the GHG emission reduction benefits of various technologies.

CESA points out that energy storage has already been evaluated for the SGIP. Systems like the VRB® meet those requirements and have already been approved for funding. Unfortunately, until the current process is brought to a close, the opportunity to install and evaluate new storage technologies has been severely reduced.