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EBC Energy Resources Program

Energy Storage Comes to Massachusetts


Next Steps and Beyond

Welcome
John Wadsworth
Chair, EBC Energy Resources Committee

Partner, Brown Rudnick LLP

Environmental Business Council of New England


Energy Environment Economy

Introduction
Dwayne Breger
Program Chair & Moderator

Director, UMass Clean Energy Extension

Environmental Business Council of New England


Energy Environment Economy

Administration Perspective
The Role of Energy Storage in Advancing
Our Clean Energy Future

Judith Judson
Commissioner
Department of Energy Resources
Commonwealth of Massachusetts
Environmental Business Council of New England
Energy Environment Economy

Energy Storage Initiative


State of Charge Study
DOER Commissioner Judith Judson

Energy Storage Initiative


$10 million initiative launched in 2015
State of Charge study
Demonstration projects
Robust stakeholder engagement
Study details:
Technology and market landscape

Massachusetts will continue to lead


the way on clean energy, energy
efficiency, and the adoption of
innovative technologies such as
energy storage.
- Governor Baker, Feb 2016, Accord for
a New Energy Future Press Event

Comprehensive modeling of the cost


and benefits of deploying storage
Economic use cases of specific storage
applications
Economic development opportunities
Policy and program recommendations
to grow storage deployment and
industry in MA

Given the recent advances in energy


storage technology and costeffectiveness, it is hard to imagine a
modern electric distribution system
that does not include energy storage.
Utility stakeholder perspective

Energy Storage Growth & Deployment


US grid is expected to have 4500 MW of energy
storage by 2020

The cost of energy storage is rapidly declining


and lithium-ion battery prices have decreased
over 50% between 2012 and 2015
US Market for Advanced Energy Storage technologies is expected to grow by 500% in next five years.
There is a huge opportunity to expand the Commonwealths successful clean energy industry.
7

Massachusetts Energy Challenges:


Storage is Game Changer for Meeting Peak
ISO-NE State of the Grid 2016 and System Annual Hourly and Weekly Demand

The need to size grid infrastructure to the highest


peak usage results in system inefficiencies,
underutilization of assets, and high cost

Energy storage is the only technology that


can use energy generated during low cost
off-peak periods to serve load during
expensive peak.

Top 1% of Hours accounts for 8% of MA Spend on Electricity


Top 10% of Hours accounts for 40% of Electricity Spend

Massachusetts Energy Challenges:


Storage reliably integrates more Renewables
According to ISO-NE State of the Grid 2016
more fast and flexible resources will be needed
to balance intermittent resources variable
output.
Storage can provide this flexibility.

With 55,000+ distributed solar projects and growing, storage can manage reverse power flow at substations

Advanced Storage Optimization Model

10

Storage In Commodity Supply Chains

FOOD
Warehouses
Grocery
stores
Freezers &
refrigerators

WATER
Reservoirs
Aboveground tanks
Water bottles

GASOLINE
Underground
tanks Aboveground tanks
Tank trucks
Portable fuel
tanks

OIL
Aboveground tanks
Piping

NATURAL
GAS
Depleted
fields
Aquifers
Salt caverns
Pipelines
Above-ground
tanks

Storage capacity more than 10% of daily consumption

ELECTRICI
TY
Energy
Storage
Technologies
Currently
less than 1%
of daily
electricity
consumption
for MA

The electricity market has a fast speed of light supply chain and the least amount of storage.
This lack of storage creates a need for additional infrastructure to maintain market reliability.
11

Model Results: Significant Benefits and Cost


Savings from Optimized Storage
Benefit Categories

Benefit Description

Energy Cost
Reduction

Energy storage replaces the use of inefficient generators at peak times


causing: 1) reduced peak prices which 2) reduces the overall average
energy price. This also benefits the natural gas supply infrastructure.

$275M

Reduced Peak

Energy storage can provide peaking capacity to 1) defer the capital costs
peaker plants and 2) reduced cost in the the capacity market

$1093M

Ancillary Services
Cost Reduction

Energy storage would reduce the overall costs of ancillary services


required by the grid system through: 1) frequency regulation, 2) spinning
reserve, and 3) voltage stabilization

$200M

Wholesale Market
Cost Reduction

Energy storage can be a flexible and rapid tool that help generators
operate more efficiently through: 1) less wear and tear, 2) less start up
and shut down costs, and 3) reduced GHG emissions.

$197M

T&D Cost
Reduction

Energy storage 1) reduces the losses and maintenance of system, 2)


provides reactive power support, 3) increases resilience, and 4) defers
investment

$305M

Increased Renewable
Integration

Energy storage reduces cost in integrating renewable energy by 1)


addressing reverse power flow and 2) avoiding feeder upgrades

$219M

Total System Benefits

$2,288M
12

Opportunities:
Energy Storage has potential to provide benefits to the Massachusetts
ratepayers, including:
Reducing the price of electricity
Lowering peak demand and deferring investment in new
infrastructure
Reducing the cost to integrate renewable generation
Reducing greenhouse gas (GHG) emissions
Increasing the grids overall flexibility, reliability and resiliency
Generating nearly $600 million in new jobs
Cost

Non-Remunerable
Remunerable

Energy Storage Benefits

Study Findings

Barriers:
Business models for storage in very early stages
Energy storage systems need a way to be compensated for a
greater portion of their cost benefit in order to achieve market
viability

13

Storage Application Use Cases


The Study analyzed the economics and business models of ten storage use cases
to inform specific policy and program recommendations

14

Study Recommendations
The Commonwealth can nurture the energy storage industry and grow the
deployment of storage in Massachusetts through programs and initiatives

Funding for Demonstration projects


Establish and Clarify Regulatory Treatment of Utility Storage
Grant and Rebate Programs
Storage in State Portfolio Standards
Paired with Clean Energy procurements
ISO Market Rules
Initiatives to Grow Companies

If adopted, the Study recommendations have the potential to yield:

600 MW of new energy storage by 2025


$800 million in cost savings to ratepayers
350,000 metric tons reduction in GHG emissions over a 10 year time span
Equal to taking over 73,000 cars off the road
15

Clean Energy Legislation


An Act Relative to Energy Diversity
(H. 4568)
Governor Baker signed bi-partisan, comprehensive energy
diversification legislation on August 8, 2016.
H. 4568:
Requires utilities to competitively solicit and contract for
approximately 1,200 megawatts (MW) of clean, baseload
hydroelectric generation;
Allows for the procurement of approximately 1,600MW of
offshore wind generation;
Establishes a commercial Property Assessed Clean Energy (PACE)
program;
Directs DOER to determine if an energy storage procurement
target is prudent and, if so deemed, to set a target;
And instructs the DPU and DEP to establish an investigation into
the impacts of Grade 3 natural gas leaks.

Clean Energy Legislation


An Act Relative to Energy Diversity (H. 4568)
Storage
Massachusetts is now the third state in the country to have an
advanced energy storage procurement authorization.
The legislation also:
Provides a definition for energy storage;
Clarifies utility ownership of storage;
Allows storage to be paired with clean energy
procurements;
Authorizes DOER to set an energy storage target.
If a target is set, the legislation allows funding
flexibility to achieve it including alternative
compliance payments and energy efficiency funds.

Clean Energy Legislation


An Act Relative to Energy Diversity (H. 4568)
Next Steps
Determine whether to set energy storage targets for
Massachusetts electric companies
Currently out for stakeholder comment
Comments due to Storage.DOER@state.ma.us by
December 16, 2016
Determination will be made by December 31, 2016
If DOER determines to set a target, it will be adopted by
July 1, 2017

DOER Storage Initiatives: Peak Demand Reduction


Peak Demand Reduction was one of 3 key priorities
negotiated by DOER in the 20162018 Three Year Plan
Energy Efficiency Program Administrators (PAs) are
demonstrating peak demand projects including
Commercial - small business wifi thermostats, software and controls,
thermal storage, BTM batteries, and economic curtailment
Residential - wifi thermostats, behavior, and BTM batteries

Goal to include broader demand reduction programs in the


2019-2021 energy efficiency plans
Peak Demand Reduction Grant
$4.5 million EE funds
RFP closed November
Energy Storage a viable technology for peak demand reduction
strategy

DOER Storage Initiatives


Energy Storage Demonstrations RFP
$10 million ACP funds
RFP to be released by MassCEC in December

Community Clean Energy Resiliency Initiative: Round 3


$14 million ACP funds
Announced 9/22/16, includes 3 programs:
Resiliency Feasibility Studies for State Medical Facilities
Resiliency Demonstration Projects at public and private hospitals
Resiliency Tool development for community planners and administrators

Straw proposal for next solar incentive program includes storage

Programs and Policies to Advance


Energy Storage

Kavita Ravi
Massachusetts Clean Energy Center
-and-

Will Lauwers
Massachusetts Department of Energy Resources
Environmental Business Council of New England
Energy Environment Economy

Massachusetts Energy Storage


Policies and Programs
Will Lauwers Emerging Technology Director, DOER
Kavita Ravi Director of Strategic Analysis, MassCEC

EE Plan: Peak
Demand

Grid Mod

Solar
Incentive

Green
Communities

Resiliency
Grants

MOR-Storage
Rebates

ESI RFP

Use Cases

APS

State Portfolio Regulatory


Standard
Treatment

Grant and Rebates

ISO-NE Market
Rules

Policies & Programs

IOU Distributed Storage at


Substations

MLP Utility Asset

LSE/Competitive Supplier portfolio


optimization

C&I solar + storage

Behind the
Meter
Residential storage
dispatched by utility

ISO/
Merchant
Developer

Microgrid

Alternative
Technology
Regulation Resource

Storage + Solar

Stand-alone Storage
or co-located with
NG plant

Resiliency case

Notes

Tremendous system benefits and can be


incentivized through existing Grid Mod
Order, EE Plans, rate filings
APS can close revenue gap while
addressing load reconstitution and ISO
market barriers
Storage in the Portfolio standard will
monetize the system benefits and close
revenue gap
APS and/or solar incentives that include a
storage component will grow use storage
with solar. Utility EE Plan Peak Demand
Savings programs may have role.

Utility or third-party dispatch of residential


storage can reduce peak and increase
renewable integration potential

ISO rules enable storage for frequency


regulation, but would benefit from reduced
minimum size

Provide alternatives to net metering for


standalone solar projects

Opportunity to increase efficiency of NG


plants, need ISO market rule development

Resiliency grants for critical C&I (e.g.


hospitals) Add to Green Communities grant
programs to incent municipal resiliency

23

Recommendations to Unlock the Use of


Storage in MA to Grow Companies
Increase Investment in Storage Companies

Create an energy storage cluster in Massachusetts to create jobs and maintain


leadership in storage
Expand MassCEC Investment Programs to support energy storage companies in
Massachusetts

Workforce Development
A trained workforce is required to support the large scale deployment of energy
and the growth of the energy storage industry
Expand existing MassCEC programs (e.g., Capacity Building, Internships) to
support developing a trained workforce
Targeting existing capacity and market trends (e.g., training solar installers to
install energy storage as well) will lead to efficiencies and market preparedness
Continue Support of New Technology Development
Strong energy storage expertise in Massachusetts world class universities
supports creation of energy storage startups in Massachusetts
Invest in research and development, testing facilities to anchor an energy storage
cluster in Massachusetts

Advancing Commonwealth Energy


Storage: Demonstration Program
Pilot innovative, broadly replicable energy storage use
cases/business models with multiple value streams
Enable increased commercialization and deployment of
storage technologies in MA

Showcase examples of future storage deployment in MA,


grow states energy storage economy, and contribute to the
Commonwealths clean energy innovation leadership

Award Overview
$10M available in grant funding
Awards from $100,000 - $1.25M
Minimum 50% project cost share required
Technical assistance for project monitoring and
verification of non-monetizable benefits
Projects must be located in Massachusetts

Example Project: IOU Grid Mod Asset

Use Case

Storage system owned & operated by Investor


Owned Utility located at distribution substation

Sample Revenue Streams Transmission & distribution upgrade deferral


Non-Monetizable System
Benefits

Increased integration of renewables, greenhouse


gas emission reduction, reduced peak, energy cost
reduction, wholesale market cost reduction

Example Project: Behind the Meter C&I Solar Plus Storage


Use Case

Commercial customer with onsite solar owns and


operates storage system

Sample Revenue Streams

Retail demand charge management

Non-Monetizable System
Benefits

Increased renewable integration, greenhouse gas


emission reduction, reduced peak demand, energy
cost reduction, wholesale market cost reduction

Estimated Timeline
Solicitation Released

Within 2 3 weeks

Informational Webinar

January 2017

Deadline for Written Questions

1 Month before Application Deadline

Application Deadline

4 Months from Solicitation Release

Grant Award Notifications

1 Month from Application Deadline

Contracting Process Begins

Within 1 Month from Award Notification

Project Installed

Within 18 months of Contracting

Project Performance Monitoring Period Ends

Three years from start of operation

These dates are subject to change at DOERs and MassCECs discretion.

Who Should Apply?


Eligibility Criteria:
Project site must be located in
Massachusetts
A range of advanced storage technologies
are encouraged to apply
Projects must be grid-connected

Respond to the Expression of Interest:


Find team members
Responses posted on a rolling basis
www.masscec.com/energy-storage
ACES Program

Selection Criteria:
Diversity of customer benefits/revenue
streams and non-monetizable/system
benefits
Readiness to proceed
Project replicability

Monitoring of Non-Monetizable Benefits


Benefit Categories
Wholesale Market Cost
Reduction
Ancillary Services Cost
Reduction
Energy Cost Reduction

Transmission & Distribution


Cost Reduction
Increased Renewable
Integration
Reduced Peak

Benefit Description
Energy storage can be a flexible and rapid tool that helps generators operate
more efficiently through: 1) less wear and tear, 2) less start up and shut
down costs, and 3) reduced GHG emissions
Energy storage would reduce the overall costs of ancillary services required
by the grid system through: 1) frequency regulation, 2) spinning reserve, and
3) voltage stabilization
Energy storage replaces the use of inefficient generators at peak times
causing: 1) reduced peak prices which 2) reduces the overall energy price.
This also benefits the natural gas supply infrastructure.
Energy storage: 1) reduces the losses and maintenance of system, 2)
provides reactive power support, 3) increases resilience, and 4) defers
investment
Energy storage reduces cost in integrating renewable energy by: 1)
addressing reverse power flow and 2) avoiding feeder upgrades
Energy storage can provide peaking capacity to: 1) defer the capital costs of
peaker plants and 2) reduce costs in the capacity market

ACES Program technical support services consultant will analyze project data
and verify benefits provided by each project.

What to Look Forward to and Whats Needed

Storage Industry Perspectives

Doug Alderton
Director Sales
NEC Energy Solutions

Environmental Business Council of New England


Energy Environment Economy

Energy Storage Comes to Massachusetts

What to Look Forward to, and Whats Needed


Storage Industry Perspective
Doug Alderton, Director Sales (Eastern US)
NEC Energy Solutions
November 29, 2016
2016 NEC Energy Solutions, Inc. All rights reserved. Proprietary and confidential.

About NEC Energy Solutions (NECES)

NEC Energy Solutions develops and manufactures advanced


batteries for electric grid and other stationary applications.

An industry leader in system integration, we focus on high


performance, efficient, safe, and reliable battery systems ranging from
small commercial to multi-MW grid-scale energy storage systems.
2016 NEC Energy Solutions, Inc. All rights reserved. Proprietary and confidential.

34

Trusted Energy Storage System Provider

2016 NEC Energy Solutions, Inc. All rights reserved. Proprietary and confidential.

35

Energy Storage Technology

Swiss Army Knife for the Grid

GSS Grid Storage Solution

Doug Alderton, Director, Sales

2016 NEC Energy Solutions, Inc. All rights reserved. Proprietary and confidential.

Flexible Grid Resource

Commercial & Industrial


Customers (kW)

Distribution Feeders
(kW-MW)

Ratepayer
Benefits

Affordable

Clean

Resilient

Source: Massachusetts DOER State of Charge Report


2016 NEC Energy Solutions, Inc. All rights reserved. Proprietary and confidential.

Distribution Substations
(kW-MW)

Transmission-Generation
(MW)

What to Look Forward to


Sterling Municipal Light Dept. - Energy Storage Project
Division of Energy Resources
Community Clean Energy Resiliency
Initiative
NEC Energy Solutions
2MW / 3.9MWh Lithium Ion
Grid Storage Solution (GSS)

Services
Resiliency: SMLD & Dispatch Center
Peak Shaving: Monthly/Annual Peaks
Scheduled Dispatch: Price Arbitrage
Voltage Support: PV Integration

Special Thanks to: Sean Hamilton, Town of Sterling, SMLD Commissioners, Judith Judson, Dr. Imre Gyuk, Daniel Borneo PE., Dr. Raymond Byrne, Todd
Olinsky-Paul, MMWEC Jared Carpenter, Jim Frawley

October 12, 2016


Groundbreaking Ceremony

November 14, 2016


Equipment Delivered & Placed

2016 NEC Energy Solutions, Inc. All rights reserved. Proprietary and confidential.

38

Energy Storage Benefits for a Muni

Grid Resiliency

Charge during off-peak hours and discharge during peak hours to offset RTO
charges.
Reduce Monthly Transmission Costs (Regional Network Service)
Reduce Annual Capacity Costs (FCM Obligation)

Arbitrage

$74,722

15.4%

RNS Payment

$197,403

40.6%

FCM Obligation

$213,153

44%

Total

$485,278

100%

Discharge during high market pricing to mitigate price spikes, recharge at low
pricing times
Ramp rate management
Reduce spikes during cloudy days
Prevent reverse power flow during shoulder months for PV

Voltage Control & Power Quality

Percentage

Renewable Integration

Total est. $
saved per year

Scheduled Power Dispatch (Energy Arbitrage)

Benefit Type

Peak Shaving

Municipal Utility Example

Island Critical Facilities during grid outages (Police, Fire, Water, Critical Facilities)
Restoration power

VARs Support, Voltage Regulation

Frequency Regulation

Balancing load and generation

Highlights:

2MW, 4MWh system, 13.8kV


Simple payback ~5.5 years

Future considerations:

FCM Obligation charges expected to increase


Frequency Regulation services could provide
significant revenues
Enables high penetration of intermittent PV
Assist in managing grid stability
Financial assistance may be available

2016 NEC Energy Solutions, Inc. All rights reserved. Proprietary and confidential.

39

Whats Needed

Consensus to Move Foreword with a Reasonable Mandate

A mandate will jumpstart the industry in Massachusetts, enabling the benefits in DOERs report

Deploy and Commission several hundred MWs of Energy Storage by 2019.


Across all value chains (Generation, T&D, Municipal, C&I), but enable quicker paths first.
Funding and cost recovery must come early to lower risk to early entrants

Coordination with DPU and ISO-NE essential

DPU and ISO-NE need to understand the benefits

Utilities and Merchant providers need to understand the rules

DOER needs to set up Working Groups with ISO-NE and DPU on how to best integrate energy storage

Modify ISO-NE rules on load reconstitution for transmission charge avoidance


Modify ISO-NE rules on metering configurations (similar to PJM) to allow MLPs to capture benefits on both sides of the meter

A Mechanism is needed to Monetize System Benefits for Owners

IOUs need approval from DPU

Set up revolving program: Create system benefits Automatic approval to fund more projects

Merchants need clear cost recovery from Markets

Allow for multiple projects to test various theories and conditions

Create an ITC and rebates for Energy Storage to stimulate 3rd party ownership and investment.

IOUs Gain System Flexibility with Energy Storage

Energy storage can be controlled to help during grid stress, its not your average DG

Rules and agreements can be set up to control system voltage AND perform market functions.

A more streamlined approach to interconnection is needed.

2016 NEC Energy Solutions, Inc. All rights reserved. Proprietary and confidential.

40

Summary
Massachusetts has the opportunity to lead and reap the benefits!

We need to work together if we are to enable them.


There are positive business cases today! But more if we can compensate for system
benefits that dont accrue to the owner.

Energy Storage is a commercially deployed product and prices continue to drop


Products are simple to install and operate autonomously

2016 NEC Energy Solutions, Inc. All rights reserved. Proprietary and confidential.

41

2016 NEC Energy Solutions, Inc. All rights reserved. Proprietary and confidential.

Flexible Turnkey Solutions Provider

Application Analysis & System Sizing


Services

Hardware, System Controls & EPC


Services

Warranty, Preventative
Maintenance & Assurance Plans

Ownership Models (Procure, PPA,


Third Party Own & Operate)

2016 NEC Energy Solutions, Inc. All rights reserved. Proprietary and confidential.

43

NEC Energy Solutions Grid Storage Solution (GSS) Overview

NEC Energy Solutions GSS

TM

NEC Energy Solutions GSSTM Architecture

2016 NEC Energy Solutions, Inc. All rights reserved. Proprietary and confidential.

About the GBS battery system


Standard containerized lithium ion battery
GBS 53 container
Long Duration (LD) energy storage technology
Roof-mounted air
conditioning units

Designed for 1 hour of energy storage or more


Mature lithium ion technology, proven in the field
Assembled in Westborough, Massachusetts

Access Door

DC Isolation Switch
Control
Rack

Lithium Ion
Battery Racks
Fire suppression
agent container
2016 NEC Energy Solutions, Inc. All rights reserved. Proprietary and confidential.

45

DSS Leverages Proven GSS Technology and Experience

GBS Grid Battery System


.

More than 120 MW of global installed capacity


and over 3 million MWh of operational experience

AEROS Controls
AEROS
software

AEROS
Controls rack
hardware

Power Conversion System

Seamless and Safe Integration

Market-leading energy storage technology for


high energy density, reliability, and safety

AEROS controls suite with years of


operational experience

Flexible and fully integrated power conversion


options

Seamless system design, including secure


enclosures, full environmental management,
and optional fire suppression system

2016 NEC Energy Solutions, Inc. All rights reserved. Proprietary and confidential.

46

DSS - Empowering New Energy Services at the Grid Edge


NEMA 4 / IP65
Enclosure

Top lifting points

Tamper-resistant
lockable doors
Automated thermal management
85kWh battery
rack per bay

(-25C to 50C ambient temperature)

AEROS controls with


integrated touch-screen HMI
Walls and doors
R13 insulated
Fork truck lifting
points, all 4 sides

Easily accessible controls


and wiring cabinet
Integrated NOVEC 1230 Fire
Suppression System (optional)
2016 NEC Energy Solutions, Inc. All rights reserved. Proprietary and confidential.

What to Look Forward to and Whats Needed

Storage Industry Perspectives

Michael Singer
Brightfields Development LLC
-and-

Betty Watson
SolarCity
Environmental Business Council of New England
Energy Environment Economy

Energy Storage Deployment


Brightfields Development, LLC
SolarCity

November, 29 2016

CMEEC
A regional public power cooperative that provides electric services to several
municipal utilities and participating wholesale customers located within the
Northeast
Currently serving over 70,000 residential, commercial and industrial customers
Total load estimated for 2016 is 1.75mm MWh
Entered into a 20 MW-DC PPA with Brightfields and SolarCity to develop solar
within their existing service territory

Member Utilities

Community Solar Portfolio


CMEEC Solar Development Goals:
No current RPS requirement but wanted to green the portfolio
Provide a distinct customer option to roof-top installations
Community solar model affords green energy to the entire southeastern CT service
territory with no premium expense or onsite equipment
Portfolio Status:
20 MW of community solar spread across 8 individual sites
Sites include 3 private sites, 2 municipal landfills and 3 sites at Subbase Groton, CT
Four sites are complete, three are under construction and one is being permitted and
designed
Stott Battery system is on-line and operational

Stott Avenue Solar & Storage Project


CTs largest solar field and battery installation with 4.75 MW-DC solar PV coupled
with 750 kW - 3 MWh Tesla battery energy storage system
SolarCitys GridLogic control platform monitors and controls the entire portfolio
A second 750 kW - 3 MWh system is currently under construction at the Polaris Site
located at Subbase Groton
The battery storage system will be actively controlled by CMEEC to load shift and
reduce peak costs
The batteries will compliment CMEECs existing fleet of 50 MW of dispatchable
generation
Existing micro-grid control technology is in place to have batteries provide localized
disaster recovery power for critical infrastructure

November, 2015

January, 2016

February, 2016

March, 2016

April, 2016

October, 2016

Tesla Battery
Storage

Primary Metering Unit (PMU)


For PV

Transformer Neutral
Reactor

DC Combiner Panel
Bi-Directional Battery
Inverter

AC Combiner Cabinet
Battery Transformer
Site Master Controller For
Battery
(On This Rack)

Main Switchgear

SolarCity
#1 full-service Residential and Commercial solar provider in
America*
The national leader in solar, SolarCity has**:
9
19
75+
340+
1,400+
1,800+
10,000+
300,000+
$9 Billion+

Years of experience
States currently served
Facilities
Batteries deployed
MW installed
Commercial projects
Employees
Customers
Of solar projects financed

* According to the Q1 2015 GTM Research U.S. PV Leaderboard.


** States served data as of 8/10/15; Facilities data as of 6/30/15; Employees data as of
Oct 16, 2016; School installations data as of 9/24/14; MW installed and Customers
data as of Oct 16, 2016; Commercial projects data as of 4/22/15; Solar projects
financed data as of 10/27/15.

Leader in storage technology

SolarCity has worked with Tesla for 4+ years on batteries


Developed suite of battery products + internal software
Fully integrated grid scale and distributed storage
Over 340 batteries deployed by SolarCity

Powerpack

Powerwall 2

250 kW /500 kWh blocks


Fully scalable

13.5 kWh

DemandLogic
solar + storage for demand charge reduction

12 PM
Your system is at full production,
charging your battery and
reducing your need for utility
power.

5 PM
As solar production decreases,
the battery is intelligently
discharged to reduce peak
demand charges.

10 PM
You draw power from the utility
company at night at lower offpeak demand rates.

K-12 Original Load Profile.


SCE Ratepayer Example School Original Load
Profile

K-12 Load Profile after DemandLogic


SCE Ratepayer Example School Load Profile After PV + DemandLogic

Community Solar + Battery Deployment


CMEEC Solar + battery deployment within ISO New England

20 MWDC solar + 1.5 MW / 6 MWh battery storage


Installation at distribution feeders across 8 sites
Largest PV-paired storage system in Northeast
Use Cases:

CMEEC peak demand reduction

ISO-NE coincident peak load reduction


Other Benefits include:

Reduction in capacity tags

Opportunity to integrate as a microgrid

Massachusetts Projects
Hampshire College in Amherst, MA
Two 250 kW / 500 kWh Tesla batteries
4.7 MW solar PV
Hampshire will dispatch to reduce peak load
BJs Wholesale Club in Framingham, MA
DemandLogic Solar + Storage
Completed and operational

Peak Load Drives Costs


State of Charge Report:
- The top 10% of hours accounted
for 40% of annual spend.

Average Prices Hide the


Importance of Peak Load
Average vs Marginal Cost
$/MWh

Average

Top 10%

Top 0.5%

Generation

$18.19

$199.15

$3,983.00

Transmission

$2.63

$28.76

$575.25

Distribution

$14.19

$155.35

$3,107.00

Total Marginal Cost

$35.00

$383.26

$7,665.25

+ Energy Price!

= Storage
already costeffective!

Massachusetts Opportunities
Storage Procurement Target
Necessary now to launch industry and overcome market barriers
Should include multiple ownership models, use cases, and
connection points
Solar + Storage Incentive
Great example of incorporating storage into programs

Other Considerations
Incentive should provide clear and stable price signals
Declining block incentives have been successful in many
contexts
Metering requirements should be based on quality of data,
not hardware

Our
Vision

To create the most compelling energy


company of the 21st century by
delivering cleaner, cheaper power
through distributed generation.

Speakers
Mike Singer
President
781-772-2875
msinger@brightfieldsllc.com

Betty Watson
Director, Policy & Electricity Markets
818-519-0818
ewatson@solarcity.com

Getting Price Signals Right Current Rules


and Future Considerations

Andrew Kaplan
Partner
Pierce Atwood LLP

Environmental Business Council of New England


Energy Environment Economy

Getting Price Signals Right:

Current Rules and Future Considerations

Andrew O. Kaplan

Whats Next at FERC?

Different Uses For Energy Storage

Using Storage as Transmission Assets

Primary Frequency Response

Using Storage for Grid Services, Generation and


Transmission

75

Storage in the Organized Markets


AD16-25: Utilization In the Organized Markets of Electric Storage
Resources as Transmission Assets Compensated Through Transmission
Rates, for Grid Support Services Compensated in Other Ways, and for
Multiple Services
November 9th Technical Conference
Three panels:

Panel 1: Can storage provide both transmission services and generation


services interchangeably?
Panel 2: Can Storage be used as an alternative to traditional reliability must
run contracts with unit retirements?
Panel 3: Can Storage provide multiple end-user, retail, and wholesale services?
Comments Due: December 14, 2016
76

Storage Used for Primary Frequency Response


RM16-6: Notice of Inquiry re Essential Reliability Services and the
Evolving Bulk-Power System Primary Frequency Response
Primary Frequency Response: involves the rapid, automatic, and autonomous actions of
generating facilities to arrest and stabilize frequency deviations, and allows the interconnected
grid to maintain frequency within acceptable boundaries following the sudden loss of generation or
load.
FERC proposes to:
Amend the pro forma Large Generator and Small Generator Interconnection Agreements to
require that all new generating facilities install, maintain, and operate a functioning governor or
equivalent controls as a precondition of interconnection.
Amend the pro forma LGIA and pro forma SGIA to include certain operating requirements
including: (1) maximum droop and dead band parameters; and (2) sustained response provisions.
Comments Due: January 24, 2017

77

Rules to be Implemented by ISOs/RTOs to


Incorporate Storage
RM16-20/RM16-23: Electric Storage Participation in Markets Operated
by Regional Transmission Organizations and Independent System
Operators
Using energy storage in Competitive Markets, Seeks to Compensate Energy
Storage for Performance and Value Delivered
Proposes that all ISO/RTO create market structures that ensure energy storage
can participate and be compensated in generation, transmission, and grid
services asset

Comments Due: TBD (likely end of January)

78

Review of Generator Interconnection on Agreements and


Procedures
RM 16-12: FERC will issue a NOPR designed to streamline the
review and approval of Generator Interconnection Agreements

New Rules will outline:


Queue management procedures;
types of modifications allowed without changing the
projects position in the queue;
improved coordination during the interconnection
process.

79

Andrew O. Kaplan
akaplan@pierceatwood.com

100 Summer Street


Boston, MA 02110

PH / 617.488.8104

CELL / 617.872.1570

Getting Price Signals Right Current Rules


and Future Considerations

Chris Parent
Director, Market Development
ISO New England Inc.

Environmental Business Council of New England


Energy Environment Economy

NOVEMBER 29, 2016

BOSTON, MASSACHUSETTS

The Expanding Role of Distributed


Energy Resources and Storage in the
Regional Power System
Environmental Business Council of New England
Energy Resources Program

Christopher Parent
DIRECTOR, MARKET DEVELOPMENT
CPARENT@ISO-NE.COM | 413.540.4599

ISO-NE PUBLIC

Distributed Energy Resources, (DER), Including Storage, Can Participate In


Various Regional Electricity Markets
However, participation is a function of the resources characteristics

Wholesale markets are designed to meet the regions reliability needs and do not
target specific technologies
DER can participate on the demand-side of the market (aggregated load, asset related
demand, alternative technology regulation resource) or the supply-side (generator,
demand response)
The ability for DER to participate in the markets is a function of its location, size and
other physical characteristics and the services it plans to provide
Larger (> 5 MW) DER generally participate directly in the wholesale markets and provide most of
the services
Smaller DER, including storage, can participate in many different ways including aggregating with
other resources or not directly participating in all markets

ISO-NE PUBLIC

New England Wholesale Markets Provide Opportunities for Distributed Energy


Resources and Grid-Scale Storage
New Englands
Wholesale Electricity
Markets

System for purchasing and selling


electricity using supply and
demand to set the price

Produces financially binding


schedules for the production
and consumption of
electricity the day before the
operating day

Market where resources receive


compensation for having invested
in capacity and delivery of capacity
in the capacity commitment period

Balances differences
between the Day-Ahead
scheduled amounts of
electricity and the actual
real-time requirements

Buying, selling and reselling of the


electric energy generated by a bulk
power system to meet the systems
demand for electric energy

Services that ensure the


reliability of production and
transmission of electricity

Resources increase or decrease output


every 4 seconds in response to signals from
the ISO to balance supply levels with the
second-to-second variations in demand
ISO-NE PUBLIC

Resources available to respond


within 10- and 30-minutes to
meet demand under certain
contingencies

84

Annual Value of Wholesale Electricity Markets Ranges from $6 Billion to


$14 Billion
Though Ancillary Markets are relatively small in comparison to Energy and Capacity Markets
Annual Value of Wholesale Electricity Markets ($ Billions)

$16
$14

$12

1.5
0.4

$10

1.1
0.3
1.1
0.2

1.6

$8
1.8

$6

0.2

1.3
0.0

0.2

1.1
0.2

1.2
0.1

$4
$2
$0

12.1

5.9

7.3

6.7

5.2

8.0

9.1

5.9

2008

2009

2010

2011

2012

2013

2014

2015

Energy Market

Ancillary Markets

Capacity Market

Source: 2014 Report of the Consumer Liaison Group, Appendix C


Note: 2015 wholesale market values are preliminary and subject to reconciliation
ISO-NE PUBLIC

85

New Energy Storage Is Emerging in the ISO Generator Interconnection


Study Queue
As of October 2016, three energy
storage projects totaling over
90 MW of capacity are
requesting interconnection
to the regional power system
New England has benefited from grid-scale electrical energy storage capabilities for
more than 40 years
There are two large-scale pumped-storage facilities located within New England

ISO-NE PUBLIC

86

ISO Response to FERC Data Request Provides an Overview of Participation


Options for DERs and Grid-Scale Storage
See: ISO Response to FERC Data Request on Storage
NOTES
** Can reduce its capacity costs if dispatchable
*** Can follow Energy dispatch and provide
Regulation, Reserves if dispatchable in real-time
**** Effective June 1, 2018

Market Service
Capacity

Energy

Reserves

Regulation

Generator (>1MW)

Yes

Seller

Yes

Yes

Settlement Only Generator (or SOG)


(<5 MW)

Yes

Seller

No

No*

Demand Response (>100 kW)****

Yes

Seller

Yes

No*

No**

Buyer

Yes

Yes

No

Buyer

No

No*

Nodal Demand (or Asset Related


Demand) (>1 MW)***
Zonal Demand

* DERs that participate in the market as demand response, SOG or zonal demand can
provide regulation as an Alternative Technology Regulation Resource (or ATRR)
ISO-NE PUBLIC

87

Storage (and other DERs) Can Participate in the Markets in Various Ways
Participate indirectly in the wholesale markets:
On the demand-side can reduce capacity, energy and ancillary service costs

Participate directly in the wholesale markets:


As an Alternative Technology Regulation Resource (ATRR)
On the demand-side as an nodal demand being responsive to changes in
wholesale energy prices in real-time and potentially providing reserves and
regulation and reducing their capacity costs
On the supply-side as a generator or demand response being responsive to
changes in wholesale energy prices in real-time and potentially providing
capacity, reserves and regulation

ISO-NE PUBLIC

88

Small (<5MW) or Behind-the-Meter Storage Can Provide Regulation


Service as an ATRR
Controllable loads using storage or small storage devices (participating as
Settlement Only Generators (SOGs)) are able to provide regulation by managing
consumption in response to 4-second AGC dispatch instructions
Individual small loads or SOGs may be aggregated into a single regulation resource
across the system
The ISO dispatches the aggregated ATRR
The aggregator then dispatches the individual loads or storage devices to produce the required
aggregate response (reducing or increasing consumption and supply)

Participants can modify their regulation capacity, performance characteristics, and


offer prices of regulation resources hourly to reflect changes in available energy
throughout the day

ISO-NE PUBLIC

89

ISO Is Forecasting Continued Solar Growth


Over the Next Decade
Cumulative Growth in Solar PV
through 2025 (MW*)

3,500

3,273

3,000
2,500

The ISOs 2016 Final PV


Forecast estimates that
PV in 2025 will account
for 4,200 gigawatt-hours
of electricity, which is
the equivalent of about
3% of the regions annual
electricity consumption

2,000
1,500
1,000
500

40
0
Thru Thru Thru 2016 2017 2018 2019 2020 2020 2022 2023 2024 2025
2010 2014 2015
Source: Final PV Forecast (April 2016); * Note: MW values are AC nameplate
ISO-NE PUBLIC

90

Solar Power Has a Significant Impact on New Englands Electricity Demand


Solar Powers Effect on Regional Electricity Demand
May 23, 2015
Sunset

Sunrise
13,000
12,500

Megawatts (MW)

12,000
11,500
11,000
10,500
10,000

At noon, solar generation


reduced load by almost 7%

9,500
9,000

Estimated Electricity Needs Served by Solar Power

Demand Without Solar Power


ISO-NE PUBLIC

Electricity Demand Seen in Real Time

91

Flexible Resources Will be Needed to Balance


Increasing Levels of Variable Generation
Solar

Wind

(MW)

(MW)
4,800

3,300

1,300
800

Existing

PV thru 2015

Proposed

MW of nameplate capacity of existing wind resources


and proposals in the ISO-NE Generator
Interconnection Queue (October 2016)
ISO-NE PUBLIC

PV in 2025

2016 ISO-NE Solar PV Forecast,


MW nameplate capacity,
(based on state policies).

92

Three Rule Changes Go Into Effect This Spring To Capture Value of Fast
Starting and Flexible Resources
Dispatchable Asset Related Demand
Rule change will establish new modeling practices and bidding parameters that allows pump storage
resources to better reflect their operating characteristics into their offers and will improve economic
dispatch

Fast-Start
Rule changes will enable an ISO-committed fast-start resource to set the real-time locational
marginal price when its dispatch reduces production costs for meeting the systems co-optimized
real-time energy and reserve requirements

5-Minute Settlements
ISO implemented Sub-Hourly Settlements to improve a resources incentives to follow dispatch
instructions, and enhances the accuracy of real-time energy and reserves compensation

ISO-NE PUBLIC

93

ISO-NE PUBLIC

94

For More Information


Subscribe to the ISO Newswire

ISO Newswire is your source for regular news about ISO New England
and the wholesale electricity industry within the six-state region

Log on to ISO Express

ISO Express provides real-time data on New Englands wholesale


electricity markets and power system operations

Follow the ISO on Twitter

@isonewengland

Download the ISO to Go App

ISO to Go is a free mobile application that puts real-time wholesale


electricity pricing and power grid information in the palm of your
hand

ISO-NE PUBLIC

95

Getting Price Signals Right Current Rules


and Future Considerations

Peter Zschokke
Director of Regulatory Strategy
National Grid

Environmental Business Council of New England


Energy Environment Economy

Panel Discussion
Moderator: Dwayne Breger, UMass Clean Energy Extension

Panelists:

Judith Judson, MassDOER


Doug Alderton,
NEC Energy Solutions
Andrew Kaplan, Pierce Atwood
Will Lauwers, MassDOER
Chris Parent, ISO New England

Kavita Ravi, MassCEC


Michael Singer, Brightfields
Development LLC
Betty Watson, SolarCity
Peter Zschokke, National Grid

Environmental Business Council of New England


Energy Environment Economy