SCE PILOT PROJECT – ORANGE, CA

(2.4 MW / 3.9 MWh)

The set of Li–ion batteries relieves transformer

overloads and defers distribution network upgrades
to ensure summer–time demand peak loads are met
Source: http://www.energystorageexchange.org/projects 41
BUZEN SUBSTATION – BUZEN, FUKUOKA
PREFECTURE (50 MW / 300 MWh)

The world’s largest BESS serves to provide

demand – supply balance
Source: http://www.energystorageexchange.org/projects 42
 NEW PUSH IN ESR DEPLOYMENT
q Advancements in storage technology, cost reduc–
tions and regulatory initiatives have invigorated
the interest in large–scale grid–connected ESRs
q The push to deeper renewable resource penetra–
tions leads to the wider deployment of storage –
as both a distributed and a grid resource
q Major deployments include utility–scale batteries,
flywheels and battery vehicle (BV) aggregations
43
 THE VEHICLE–TO–GRID (V2G)
FRAMEWORK AS A PRACTICAL ESR

q The use of bidirectional power flow interconnec–

tions of the BVs under the V 2G framework allows
aggregations of BVs to constitute a storage project
whose total capacity and capability can provide a
valuable resource to the grid
44
 EVs ON THE ROAD
Source: Financial Times number in use (’000)
https://www.ft.com/content/31d68af8-6e0a-11e6-9ac1-1055824ca907
1,200

other 1,000
Germany
UK 800
France
Norway
600
Netherlands
Japan
China 400
US

200

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 45
 % market share
CUMULATIVE US EV SALES: 2011–2018

Source: http://energyfuse.org/u-s-reaches-1-million-electric-vehicle-sales/
46
 SALES OF NEW EVs
as % of new registrations
0 5 10 15 20 25
Norway

Netherlands
Sweden

France
China
UK

Germany
US

Japan
total Source: Financial Times
https://www.ft.com/content/31d68af8-6e0a-11e6-9ac1-1055824ca907
47
 BATTERY VEHICLE REGISTRATIONS
IN EUROPE: Q1 2019

Source: European Automobile Manufacturers Association; available online at https://finance.yahoo.com/news/million-car-electric-

dream-spurs-040000504.html 48
 TESLA MODEL 3 RESERVATIONS
400
350 325
number of reservations

300 280
254
250 232
200
200 181
151
150 116
100
50
0
0 2 11 15 24 34 50 168
number of hours after announcement
Source: http://electrek.co/2016/04/03/tesla-model-3-reservations-timeline/, issued April 2015 49
 BARRIERS TO LARGE–SCALE
STORAGE DEPLOYMENT
q The pace of energy storage deployment has been
very slow in the past, mainly due to the extremely
high costs of storage
q The reductions in storage costs over the past
decade have remained inadequate to stimulate the
large–scale deployment of ESRs
q The high costs of storage present a chicken and egg
problem: costs remain high due to low demand
and the high costs impede any growth in demand
50
CALIFORNIA
163,696 square miles; 3rd
largest US state by area;

Source: http://www.usamaps2015.xyz/california-map/
4 % of the size of Europe

38 million people

annual electricity
consumption is
293,269 GWh, which is
8 % of the US total
51
 CALIFORNIA PUSH FOR STORAGE
DEPLOYMENT
q The CA government has recognized the significant

role storage can play in the grid and the need for a

bold move on storage to drastically reduce the storage

price through a sharp increase in demand

q The recent CPUC mandate to deploy 1,325 MW of

cost–effective energy storage by 2020 in California

launches a major push for the global storage sector

52
 GUIDING PRINCIPLES

“ 1. The optimization of the grid, including peak

reduction, contribution to reliability needs, or
deferment of transmission and distribution
upgrade investments;
2. The integration of renewable energy; and
3. The reduction of greenhouse gas emissions to
80 percent below 1990 levels by 2050, per
California’s goals”
54
THE CPUC STORAGE REQUIREMENTS
q In Decision 13-10-040, CPUC has mandated a target

by 2020 of 1,325 MW of energy storage to be

installed by the three major jurisdictional investor

owned utilities (IOUs) by 2024

q The CPUC Decision provides the framework with

whose specifications the procurement and

deployment of storage projects must comply

55
THE CPUC STORAGE PROCUREMENT
FRAMEWORK SPECIFICATIONS
q Storage capacity targets for each of the 3 major
California IOUs
q Procurement schedule for the authorized storage
projects
q Storage capacity targets at each of the specified
grid interconnection point given below:
m transmission
m distribution
m customer side of the meter 56
THE CPUC STORAGE PROCUREMENT
FRAMEWORK SPECIFICATIONS
q Allowed deviations to meet the CPUC targets by:

m shifts of the targets among the grid

interconnection points

m ownership of storage resources by

IOUs, customers and third parties

m deferral of IOU targets in the CPUC–

specified schedule
57
IOU STORAGE CAPACITY TARGETS

target
IOU %
(MW)

PG&E 580 43.77

SCE 580 43.77

SDG&E 165 12.26

58
STORAGE CAPACITY TARGETS AND
GRID INTERCONNECTION POINTS

grid intercon– target

% customer side of meter
nection point (MW)

customer side distribution

200 15.09
of meter

distribution 425 32.08

transmission
transmission 700 52.83

59
 PROCUREMENT SCHEDULE
250
storage capacity procured (MW)

210 210
200 SCE

160 160
150 PG&E
120 120

100 90 90
70
SDG&E
50 45
30
20

0
2014 2016 2018 2020 60
 CUMULATIVE PROCURED CAPACITY
1,400
total = 1,325 MW
cumulative procurement target (MW)

1,200
SCE
1,000

800 SDG&E
600 PG&E
400

200

0
2014 2016 2018 2020
year
61
 CPUC STORAGE PROCUREMENT
FRAMEWORK FEATURES
q The procurement targets are mandated for each

IOU and may not be traded among the IOUs

q Biannual procurement applications are to be filed

by each IOU by March of each applicable year

q At least 50 % of each project approved to meet the

targets must be owned by third parties, customers

or joint third party/customer ownership

62
 TOTAL PROCURED CAPACITY
VERSUS TARGET CAPACITY
500

400
total capacity (MW)

SDG&E
300 PG&E
SCE
200

100

0
procured target procured target
2014 2016 63
 CURRENT STATUS OF ENERGY
STORAGE PROCUREMENT IN CA
q There has been an upsurge in behind–the–meter

projects that have helped the IOUs meet some of

their T&D storage targets in 2016 and 2017

q Each IOU has invested also in large battery ESR

projects, currently under construction; the timely

completion of these projects is required to meet

the target of each IOU

64
 FROM 60 Wh BATTERY CELLS TO A
LARGE–SCALE 32 MWh ESR (BESS)

56 18 151 4

cell module rack section system

(60 Wh) (3.2 kWh) (58 kWh) (8.7 MWh) (32 MWh)

Source: M. Irwin,”SCE Energy Storage Activities,” Proc. IEEE PES General Meeting, Denver, July 26-30, 2015 65
 LARGE – SCALE ESR

12 kV/66 kV BESS
transformer building
PCS units

Source : SCE 66
 CPUC DECISION RAMIFICATIONS
q The CPUC Decision is a harbinger of regulatory

initiatives in the large–scale grid–connected

storage domain that signals the realization by the
government of the significant role storage plays
to further the smart grid implementation
q The CPUC Decision stimulus to reduce ESR costs
by increased demand is likely to reappear in
many other venues to promote wider use of ESR
67
 OPPORTUNITIES FOR LARGE–SCALE
ESRs
q The CPUC Decision is paving the way for new
opportunities in the storage sector
q The need for storage to meet the CPUC mandate
creates a strong push in the storage market and
considerably weakens the reluctance to invest in
the storage sector
q A key example is the new TESLA Gigafactory, the
large–scale NV plant in to manufacture storage
batteries for commercial and residential uses
68
Li – ION BATTERY PRICES AND DEMAND
$/MWh EV Li-ion battery cost global EV Li-ion demand annual demand in GWh
1,200 1200

1,000 1000

800 800

600 600

400 400

200 200

0 0
2010 2012 2014 2016 2018 2020 2022 2014 2026 2028 2030
Source: Bloomberg New Energy Finance
https://www.bloomberg.com/news/articles/2016-06-13/batteries-storing-power-seen-as-big-as-rooftop-solar-in-12-years 69
 US BATTERY STORAGE INVESTMENT
COSTS

capacity costs energy storage capability costs

4,000 4,000

3,000 3,000 75th

percentile
2,000

$ /kWh
2,000 median
$ /kW

capacity-
weighted
1,000 1,000 average

0 0 25th
percentile

Source: EIA, Form EIA-860, Annual Electric Generator Report, reported in Today in Energy, June 1, 2018;
available online at https://www.eia.gov/todayinenergy/detail.php?id=36432 70
WILL STORAGE FOLLOW THE PATH
OF PV SOLAR CAPACITY COSTS ?
$ / watt Source: Bloomberg, New Energy Finance, and
80 https://en.wikipedia.org/wiki/growth_of_photovoltaics

76.00
60

40

20
0.24

0
1977 1983 1989 1995 2001 2007 2017
year 71
 CHALLENGES TO LARGE–SCALE
STORAGE DEPLOYMENT
q The deployment of large–scale ESRs brings forth
many economic, regulatory and technical challenges
that must be overcome to effectively harness the
myriad benefits such resources provide
q While the of large–scale ESR implementations are
certainly beneficial to grid operations, the actual
quantification of the various benefits and impacts
and their allocation to the ISO, the ESR owners and
the customers is a very difficult problem
72
 WORLD'S LARGEST BESS
q CPUC approved 4 energy storage projects for PG&E to
replace four to–be–retired gas generators; two
batteries will become the world’s largest BESS
q The storage projects add 567.5 MW/2,270 MWh
ma 300 MW/1,200 MWh–project from Vistra Energy
ma 182.5 MW/730 MWh–project from Tesla to be
owned by PG&E
ma 75 MW/300 MWh–facility from Hummingbird
Energy Solutions; and
ma 10 MW/40 MWh–facility from mNOC
73
 WORLD'S LARGEST BESS

q The CPUC directed PG&E to purchase the storage

in January 2018 to replace the three gas plants in
PG&E's service area – an indication that the cost
of the batteries is likely cheaper than continued
operations of the plants
q The approval of PG&E's energy storage projects
is the most significant example to date of the
replacement of gas generation units by BESS
74
 CONCLUDING REMARKS
q In the development of sustainable paths to meet
future energy needs, renewable resources must
play a leading role and storage is, by far, the most
promising option to facilitate such paths
q The CA mandate may provide the appropriate
stimulus to jump start grid–connected storage
deployment and to further reduce storage prices
q There remain daunting challenges at many levels
– from science to engineering to policy – to
effectively implement ESR deployment in the grid
77
 CONCLUDING REMARKS

q We need to systematically address the major

challenges in storage technology improvement,

modeling and tool development, regulatory,

environmental and policy formulation arenas – to

name just a few – in order to realize the goal of

large–scale deployment of storage in future grids

78