Difference between revisions of "Energy Storage 101/Economics"
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=Cost Components and Trends= | =Cost Components and Trends= | ||
Clarity on costs is a critical component of energy storage economics. That includes what is included in the scope of the cost and how costs are communicated. | |||
<br>[[File:Es101cost1.png]] | |||
<br>Other generation resource costs are often communicated on a $/kW basis, but energy storage has both power and energy components and the normalized cost will vary with duration. This is highlighted in two examples below. | |||
<br>[[File:Es101cost2.png]] | |||
<br> | |||
<br>[[File:Es101cost3.png]] | |||
= | =Grid Services and Uses= | ||
Energy storage has many capabilities: | |||
*Capacity Resource: Firm power | |||
*Flexibility Resource: Fast response and ramping | |||
*Backup Resource: Energy reserve | |||
*Power Quality Resource: 4-quadrant watts and VARs | |||
<br> | |||
The table below list the grid services energy storage can support. | |||
<br>[[File:Es101app.png]] | |||
<br>Transmission-connected storage may provide: | |||
*Generation capacity (resource adequacy) | |||
*Black start | |||
*Virtual transmission capacity | |||
*Energy time-shifting | |||
*Ancillary services | |||
<br>Distribution-connected storage may provide: | |||
*Virtual distribution capacity | |||
*Enhance power quality | |||
*Resiliency / backup power / microgrid | |||
*Upstream transmission impacts – either costs or benefits | |||
<br>Customer-connected storage may provide: | |||
*Customer bill savings: Retail time-of-use tariff energy shifting, Demand charge management | |||
*Backup power | |||
*Upstream T&D impacts – either costs or benefits | |||
= | =Modeling Energy Storage= | ||
'''Challenges to modeling energy storage include:''' | |||
*Storage is not yet a common grid asset | |||
*Rules and regulations are still evolving | |||
*Benefit stacking is appealing, but is it possible? | |||
**More services = more value | |||
**More services = more requirements | |||
**Can these requirements be satisfied? | |||
*Storage value analyses are site-specific | |||
*Complex co-optimization between storage technologies, objectives, and constraints | |||
<br> '''Understanding Service Compatibility''' | |||
*Energy Storage Services Hierarchy | |||
**Energy storage services only flow from bottom up, customer storage may provide distribution and transmission-level services, but transmission storage can NOT provide distribution or customer services | |||
*Reliability vs. Economic | |||
**Reliability takes priority (e.g. T&D deferral higher priority than market services) | |||
**Long-term planning constraints take priority to economic optimization and constraints roll-up; Multi-year >> Annual >> Monthly >> Day-ahead >> Real-time | |||
*Local vs. System Level | |||
**Local objectives generally supersede system objectives when there is a conflict (e.g. T&D deferral higher priority than resource adequacy) although should be designed so that reliability services never conflict | |||
<br>'''EPRI Tools to Support Valuation Modeling''' | |||
<br>[http://storagevet.com/ StorageVET] | |||
<br>[http://der-vet.com/ DER-VET] | |||
Revision as of 13:38, 27 October 2020
Cost Components and Trends
Clarity on costs is a critical component of energy storage economics. That includes what is included in the scope of the cost and how costs are communicated.
File:Es101cost1.png
Other generation resource costs are often communicated on a $/kW basis, but energy storage has both power and energy components and the normalized cost will vary with duration. This is highlighted in two examples below.
File:Es101cost2.png
File:Es101cost3.png
Grid Services and Uses
Energy storage has many capabilities:
- Capacity Resource: Firm power
- Flexibility Resource: Fast response and ramping
- Backup Resource: Energy reserve
- Power Quality Resource: 4-quadrant watts and VARs
The table below list the grid services energy storage can support.
File:Es101app.png
Transmission-connected storage may provide:
- Generation capacity (resource adequacy)
- Black start
- Virtual transmission capacity
- Energy time-shifting
- Ancillary services
Distribution-connected storage may provide:
- Virtual distribution capacity
- Enhance power quality
- Resiliency / backup power / microgrid
- Upstream transmission impacts – either costs or benefits
Customer-connected storage may provide:
- Customer bill savings: Retail time-of-use tariff energy shifting, Demand charge management
- Backup power
- Upstream T&D impacts – either costs or benefits
Modeling Energy Storage
Challenges to modeling energy storage include:
- Storage is not yet a common grid asset
- Rules and regulations are still evolving
- Benefit stacking is appealing, but is it possible?
- More services = more value
- More services = more requirements
- Can these requirements be satisfied?
- Storage value analyses are site-specific
- Complex co-optimization between storage technologies, objectives, and constraints
Understanding Service Compatibility
- Energy Storage Services Hierarchy
- Energy storage services only flow from bottom up, customer storage may provide distribution and transmission-level services, but transmission storage can NOT provide distribution or customer services
- Reliability vs. Economic
- Reliability takes priority (e.g. T&D deferral higher priority than market services)
- Long-term planning constraints take priority to economic optimization and constraints roll-up; Multi-year >> Annual >> Monthly >> Day-ahead >> Real-time
- Local vs. System Level
- Local objectives generally supersede system objectives when there is a conflict (e.g. T&D deferral higher priority than resource adequacy) although should be designed so that reliability services never conflict
EPRI Tools to Support Valuation Modeling
StorageVET
DER-VET