ba#ery energy storage market - clean energy group
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Ba#eryEnergyStorageMarket:CommercialScale,Lithium-ionProjectsintheU.S.
FundedbytheDOESolarEnergyTechnologiesOfficeundertheSuNLaMPProject30379-1614
Solar-plus-Storage:CostReducJonthroughOpJmizaJonandMarketCharacterizaJon(FY16-17)
JoyceMcLaren,PieterGagnon,KateAnderson,EmmaElgqvist,RanFu,TimRemo
October,2016
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ThisslidedeckpresentstheresultsofdatacollecJononthecommercial-scaleli-ionbaZeryenergystoragemarket(currentasofAutumn2016).
Itincludes:• mapofexisEngU.S.projectlocaEons• li-ionenergystorageprojectcostdata(onakWandkWhbasis),basedondeveloperquotes• projectcostbreakoutandlistofelementstypicallyincludedinprojectcostesEmates• commonuse-casesandvaluestreamsforba#eryenergystorageprojects• mapofelectricuElitydemandcharges(whichimpactba#eryenergystorageeconomics)• howtheFederalInvestmentTaxCredit(ITC)andModifiedAcceleratedCostRecoverySystem
(MACRS)applytoenergystorageprojects• summaryofNREL’sFY16-17solar+storageopEmizaEonmodelingproject
TheinformaJonpresentedintheseslideswascollectedtoinformtheinputsandassumpJonsforNREL'ssolar+storageopJmizaJonmodelinginFY17.Thenumberofprojectquotesmadeavailablewaslimitedandtheenergystoragemarketisrapidlychanging.Therefore,thisinformaJonshouldbeseenonlyasacomplimenttomarketdatafromothersources.
TableofContents
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ThismapindicatesthelocaJonsofallli-ionbaZeryprojectslistedontheDepartmentofEnergy(DOE)EnergyStorageDatabase.Projectspairedwithsolarphotovoltaics(PV)areshowasasun.Projectslistedashavingaresiliencyusecaseareshowninred.Projectsarecurrentlyclusteredonthewestandeastcoasts,duetofavorableelectricitymarketsandincenJves.
Li-ionEnergyStorageProjectLocaJons
Source:DOEGlobalEnergyStorageDatabaseasof27September2016.hZp://www.energystorageexchange.org/Sizesrangefrom1kW-100MWandarebehindandin-frontofthemeter.DatashowsoperaJonal,contractedandannouncedlithium-ionbaZeryprojectscommissionedbeginningJanuary,2009.
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NRELDataCollecJon
Thefollowingslidespresentcurrentmarketbaselinedataforbehind-the-meter,commercial-scalebaZery(li-ion)energystorage.TheinformaJonisbasedonprojectquotesthatweresharedwithNRELbyindustryparJcipantsbetweenApril–May2016.
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ProjectSizes(NRELDataCollecJon)
ProjectCount:28BaZeryDuraJonHoursAverage: 1.9Minimum: 0.3Maximum: 3.2kWAverage: 30.7Minimum: 5Maximum: 96kWhAverage: 37.1Minimum: 8Maximum: 90
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TotalProjectCostperkW(NRELDataCollecJon)
Count: 28TotalProjectCostAverage: $55,282Minimum: $10,200Maximum: $164,131BaZeryDuraJon(Hours)Average: 1.9Minimum: 0.3Maximum: 3.2kWAverage: 30.7Minimum: 5Maximum: 96
Forthe28projectsforwhichdatawascollected,theaveragecostoftheprojectsis$55k.TheaverageduraJonofthebaZeryprojectsisjustunder2hours.TheaveragepowerraJngoftheprojectsis30kW.
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TotalProjectCostperkWh(NRELDataCollecJon)
Count: 28TotalProjectCostAverage: $55,282Minimum: $10,200Maximum: $164,131BaZeryDuraJon(Hours)Average: 1.9Minimum: 0.3Maximum: 3.2kWhAverage: 37.1Minimum: 8Maximum: 90
Forthe28projectsforwhichdatawascollected,theaveragecostoftheprojectsis$55k.TheaverageduraJonofthebaZeryprojectsisjustunder2hours.TheaverageenergyraJngoftheprojectsis37kWh.
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TotalProjectCost–Normalized(NRELDataCollecJon)
Count: 28BaZeryDuraJon(Hours)Average: 1.9Minimum: 0.3Maximum: 3.2kWAverage: 30.7Minimum: 5Maximum: 96TotalProjectCost/kWAverage: $2,338Minimum: $1,073Maximum: $4,323
NormalizingthedatapointsbythekWraJngshowsthedecreaseincostperkWwithincreaseinthesystempower.TheaveragecostperkWis$2,338.ThewiderangeofcostsisindicaJveofthefactthatdisplayingthedatainthiswaydoesnotdepictanyinformaJonaboutthekWhraJngofthebaZery,whichcanvarygreatlyacrossanygivenkWraJng.
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ComparisonofNRELstoragecostdatavs.projectcostsreportedtoCaliforniaSelf-GeneraJonIncenJveProgramSystemquotesprovidedtoNREL,whileslightlylower,donotdiffersignificantlyfromthosereportedtotheCaliforniaSGIPandmayreflectreducJonsinsystemcostsinthelastyear.ThetrendsshownintheseplotsaredependentontheenergyraJngofthebaZeries.Allthingsbeingequal,aporloliowithlargerenergyraJngwouldshowahigher$/kWtrend.SincetheenergyraJngsinthedatapointsarenotidenJcal,thesegraphsshouldnotbeinterpretedasacomparisonofprojectcosts,butsimplyasadepicJonofthetrendofonemetricacrosstwodifferentporlolios.
Yearofquote2016
10
60%20%
9%
11%
BaZeryHardwareEngineering,Procurement,ConstrucJonDevelopment/SonCosts
StorageProjectCostBreakdown
Ba#eryHardware• Inverter-PowerConversion
• ContainerorHousing• Containerextras(insulaJon/walls)
• ElectricalConduit(insideofcontainer)
• CommunicaJonDevice• HVAC• Meter(revenuegrade)• FireDetecJon• FireSuppression• Labor• ACMainPanel• DCdisconnect• IsolaJonTransformer• AUXPower(lighJng)
Engineering,Procurement,ConstrucEon(EPC)
• ControlSystem/SCADA• SitePreparaJon• Loading&DrivefromOEMsite• Lining&HoisJng(bycraneonsite)
• PEstampedcalculaJons/drawings
• OEMtesJngandcommissioning
• ElectricalBOSoutsideofcontainer(conduit,wiring,DCcable)
• ElectricalLabor• StructuralBOS(fencing)• EPCOverhead&ProfitDevelopment/So^Costs
• CustomerAcquisiJon• DeveloperOverhead&Profit• InterconnecJon
ProjectCostBreakout500kW/1000kWhcommercialscalecontainerizedli-ionbaZerysystem
TotalProjectCost=$883,427
DevelopedbyRanFu&TimothyRemoDataasof09/30/2016aspartofNREL’sBoZom-upCostModel
underDOESuNLaMPagreementnumber29839.
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Use-cases&ValueStreams
Thefollowingslidessummarize:• commonusecasesandvaluestreamsforenergy
storage• uJlitydemandchargesacrosstheUS• howthefederalITCandMACRSapplytoenergy
storage
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BaZeryStorageUse-cases&ValueStreamsBaZerysystemdesignanddispatchstrategiesdifferdependingontheuse-caseandthevaluestreamsthatarebeingtapped.WhilethekWhdispatchedmaybethesameinthecaseoftwodifferentprojects(orevenbythesameprojectatdifferentJmes),themonetaryvalue($/kWh)gainedfromthatdispatchmaybeverydifferent.DependingonthemarketstructureinaparJcularlocaJon,commercial-scale,behind-the-meterbaZeryprojectsmaytapintooneormoreofthevaluestreamsbelow.
ValueStream Reasonfordispatch Value
DemandChargeReducJon Reduceon-siteloadtoshavepeaksinusage Lowerretailelectricitybillvialower
demandcharge
Time-of-Use/EnergyArbitrage
BaZerydispatchedtomeeton-siteloadduringJmesofdaywhenretailenergypricesarehigh
Lowerretailelectricitybillvialowerenergycharge
Capacity/DemandResponse
DispatchpowertogridinresponsetoeventsdefinedbytheuJlity/IndependentSystemOperator
Paymentforcapacityservice
FrequencyRegulaJon BaZeryinjects/absorbspowertofollowregulaJonsignal PaymentforregulaJonservices
EnergySales DispatchpowertogridduringJmesthatlocaJonalmarginalprices(LMP)arehigh LMPpriceforenergy
Resiliency BaZerydispatchedtoprovidepowertocriJcalfaciliJesduringoutages. AvoidedcostofinterrupJon.
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CurrentCommercial/IndustrialUJlityDemandCharges
DatashownarebasedoncommercialuJlitytariffsfromtheUJlityRateDatabase,asofAugust2016.ThedatabasewasupdatedbetweenSept2015and
Sept2016.Tariffsthatareavailableonlytospecific
customertypes–suchasschoolsoragriculturalpumping–are
excluded.
ThismapshowsthehighestdemandchargeobservedineachuJlityterritory.InregionswhereuJlitydemandchargesarehigh,behind-the-meterstoragemayyieldelectricitybillsavingstotheconsumerbyshavingloadduringpeaks.ThesheernumberofuJlityratestructuresacrosstheU.S.hasposedachallengetoidenJfyingopportuniJesfordeployingstoragefordemandchargesavings.
Source:UJlityRateDatabase
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*We assume energy storage can be added to an existing PV system based on a IRS Private Letter Ruling that allowed owner of a wind turbine to add energy storage to existing facility and claim the tax benefit. We believe that the PV and energy storage would need to be in close proximity and under common ownership (same taxpayer). We believe a replacement battery (e.g. at 10 years) does not qualify for the ITC, but does qualify for 5 year MACRS.
ITC&MACRSforsolarandstorageprojectsTheInvestmentTaxCredit(ITC)andModifiedAcceleratedCostRecoverySystem(MACRS)arenaJonallevelincenJvesthatcanimprovebaZeryenergystorageprojecteconomics.
Battery system ownership
Tax credits for battery components
PV system charging the battery
PV system on site
7 year MACRS
5 year MACRS Portion of 30% ITC
5 year MACRS 30% ITC
5 year MACRS
7 year MACRS
*
Private
No PV system
Existing PV system
New PV system
Public (university, federal)
Battery charged by PV 50%-75%
Battery charged by PV 75%-99%
Battery charged by PV 100%
Battery charged by PV < 50%
none
Credit: Emma Elgqvist, NREL Sources: IRS Regs. Sec. 1.48-9(d)(6); IRS Notice 2015-70; IRS Publication 946; IRS PLR 201308005 IRS PLR-121432122012; IRS PLR-201142005; IRS PLR 201208035; IRS CCA 201122018
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Methodologyconsidersdifferent:
• BuildingTypes• OwnershipModels• End-UseCases• UJlityRateTariffs• TechnologyCosts• ElectricityMarkets• IncenJves/Policies• ClimateZones
PROJECTSUMMARY
ThroughdatacollecJon,innovaJvemodelingandanalysisthisproject:• Developsprojectcostbaselinestorefinemodelinginputsbasedoncurrentmarketdata
• IdenJfiescost-opJmaltechnologycombinaJonsofsolarandstorageforavarietyofbuildingtypesandmarketcondiJons
• ExploresmethodstovaluethecontribuJonofsolar-plus-storagetoelectricsystemresiliency
• CharacterizesmarketpotenJalformulJpletechnologyandpolicytrajectories• SupportsidenJficaJonofpolicyandregulatoryopJonstosupportsolar-plus-storagedeployment
Finalresultsavailableautumn2017.ProjectWebsite:hZp://www.cleanegroup.org/ceg-projects/solar-storage-opJmizaJon/
Solar-plus-Storage: Cost Reductions through Optimization and Market Characterization
QUESTIONS ADDRESSED • At what technology costs are projects economical? • What policy changes would encourage the formation of new markets? • How can system owners capture multiple value streams? • How can we value energy resiliency in economic calculations? • Where will solar with storage be cost-effective in the near-term? Longer-term?
² DemandchargereducJon² Energyarbitrage² Ancillaryservices(frequency
regulaJon)² Resiliency
VALUESTREAMSCONSIDERED² DemandchargereducJon
² Energyarbitrage² RegulaJon/Capacity² DemandResponse² Resiliency
Principal Investigator: Joyce McLaren [email protected]
Funded by the DOE Solar Energy Technologies Office (SETO) as SuNLaMP Project 30379-1614 (FY16-17)
• AlphaEnergy• CAIRN• CenterforSustainableEnergy• CleanEnergyGroup• ConnecJcutGreenBank• CUNY• FosterraCleanEnergyConsulJng• Geli• NYSERDA• Sonnen• STEM• Sunverge
AppreciaJontotheorganizaJonsthatprovidedinformaJonandpeerreviews,including: