Cambridge Compact Energy Storage Opportunities January 2018

Cambridge Compact Energy Storage Opportunities January 2018

Cambridge Compact Energy Storage Opportunities January 2018 1 $106,000,000,000 Billion will be invest in energy storage between 2016 and 2030 globally 305 gigawatt-hours Of energy storage will be installed globally by 2030 1,064 GW Generation USA Source: BNEF. DOE.

2 1 Energy Storage Systems (EES) US - Factoids EES systems are often expressed by rated power in megawatts (MW) and energy storage capacity in megawatt-hours (MWh).* As of April 2017, the U.S. had over 24.2 GW of rated power in energy storage. 2.5% of delivered electric power in the U.S. is cycled through a storage facility. U.S. energy storage increased by 105% from 2013 to 2016. California leads the U.S. in energy storage with 198 operational projects (4.3 GW), followed by Virginia and Texas. Source: UMICH. DOE. 3

DOE Global Energy Storage Database 4 Global cumulative storage deployments Projections Source: BNEF. 5 Levelized Cost of Storage Analysis Source: Lazard. 6 Central Takeaways Energy Storage Market for commercial use is new, and fragmented. Business models vary, are evolving and adapting, and may not follow the traditional Tesla Model. (i.e. STEM)

While previous years saw very slow growth, 2017 experienced 150% growth. ____ + Storage is currently the most economically feasible. There are multiple current opportunities for Cambridge Compact members: 7 Consumer Energy Storage Systems Primer Consumer ESS 1 Basics of Storage Describe energy technologies and how those apply

to members of the Compact. 2 Case Studies Examine examples study cases: Global USA MA 3 State of the Market Economics, Private & Public sector roles,

Environmental Impact. 9 Technologies, Value proposition, and solutions 1 Basics of Energy Storage Quick Summary of Storage Technologies 11 Energy Storage Technologies

1 Source: Deloitte 12 Figure 1. Energy Storage Across the power sector Generation Storage offers Emission free alternatives to plant additions as utilities face aging plants and stringent environmental regulations Technologies: PHS, CAES, Traditional Electrochemical, Flow Batteries, Hydrogen Applications: Electric Energy Time-shift, Electric Supply Capacity Renewables Storage addresses the intermittency issues of renewables by delivering energy only when the grid requires it

Technologies: PHS, CAES, Traditional Electrochemical, Flow Batteries, Hydrogen Applications: Time-shift, capacity firming, wind integration Consumers Storage ensures power quality and reliability during outages as well as enables behind the meter energy management practices Technologies: Li-ion, NaS, Pb-Acid, Flywheel, Flow Batteries, Hydrogen Applications: Time of Use Energy Cost Management, Demand Charge Management, Electric Reliability, Electric Power Quality ISO Storage improves the quality and stability of a grid that seeks to accommodate disparate and dynamic supply and demand points Technologies: Flywheels, Li-ion,

SMES, Supercapacitors, Pb-Acid Applications: Load Following, Area Regulation, Electric Supply Reserve Capacity, Voltage Support Transmission & Distribution Storage enables the deferment of T&D investments as utilities seek to maintain reliability while satisfying growing loads and integrating renewables energies Technologies: Traditional Electrochemical, SMES, Supercapacitors, Flow Batteries, CAES Applications: Transmission Support, Congestion Relief, Deferral, Substitution, On-site Power Source: Deloitte 13 Primary Value Proposition

Electricity storage can be used to reduce the cost incurred for electric service. The benefit 1 can be significant. There are two variations on this value proposition. (ESA) Time of use energy cost management: One involves electricity end-users that pay time-of-use (TOU) electric energy prices. That is, the price paid depends on the time that it is purchased. Demand charge management (Capacity Charges): Second, commercial and Industrial end-users that use a significant amount of electricity qualify for electrical service pricing that includes both a) TOU energy pricing and b) demand charges. Secondary value propositions (especially as the market evolves and prices get richer) Electric reliability Electric power quality (ability to track energy source behind the meter) Flexible Power Peaking Resource (Provides ability to sell power to utilities) Electric Energy Time Shift Resilience (Emergency management: i.e: Worst case scenario emergency preparation)

Demand Response Response Payments in reaction to emergencies that threaten the 14 1 Other Advantages: Traditional Vs The Future Grid Energy Storage is expected to provide numerous benefits in many possible combinations. As the grid becomes smarter and technology costs decrease, storage flexible properties will increase its value. Distributed systems behind the meter would become not just ways to save on energy costs, but also act as assets which generate returns. For example: Frequency Regulation T&D Upgrade Deferral Transmission Support and Avoidance of Congestion Charge Ramping Storage is more responsive than generation-based peakers like. The ability to both

absorb and discharge energy adds to storage flexibility. Storage used for peaking could be used for ancillary services during thousands of hours per year. (frequency control, spinning reserves and operating reserves.) There are no direct emissions from storage and most storage types produce limited or noise so it may be easier to site than generation-based peakers. Source: Energy Storage Association. 15 1 What Technologies Are Commercially Available? Solid State Batteries: NaS (Sodium Sulfur), Li-ion, Ni-CD Proven and chosen technologies today Li-ion = Lithium + various combinations of chemistries Flow Batteries Redox Flow Batteries, Iron-Chromium (ICB), Vanadium-redox (VRB), ZincBromide(ZNBR)

Ability to scale and expand, longer life time, and battery is not aged by charge and discharge. SMES (Superconducting Magnetic Energy Storage), Flywheels, and Supercapacitors High Power Output at once Thermal (District energy systems) Pumped Heat Electrical Storage, Hydrogen, Liquid Air Harvard, City of Chicago CAES (Compressed Air) Association. Equivalent to Pumped Hydro Systems Source: Energy Storage 16 1 Solid State Li-on

Lead(Pb) Acid Best technology for commercial needs Most affordable today but on its way out Sodium-sulfur (Nas) Created in the 1960s, mostly used in Japan. Expect it to become an alternative to Lion. 17

Newest Tesla cell Is already at 250 wh/kg ElectroChemical Efficiency Curve 18 1 Li-Ion Battery manufacturing set to double from the current 140k to 280k megawatthours Source: BNEF.

On a dollar per kilowatthour Lithium-ion technologies in 2016 prices where $273 dollars, and in 2020 is expected to be at $170. This is an average. According BNEF, there are pack prices below $200 per kilowatt-hour. High energy densities, high power, near 100% efficiency, and low self-discharge. 19 1 Other Options (Max 3

slides) Flywheel Flow-Battery Established technology with few commercial players. Harvard has developed the most technology ready flow-battery. Mass commercial scalability not proven yet. Currently looking for pilot programs.

20 2 Case Studies Global, US and State Level 21 2 Aliso Canyon - California Resiliency Need It validates that energy storage can be part of the energy mix now. Kevin Payne, CEO of SCE The 20-megawatt, 80-megawatthour installation is capable of powering 15,000 homes for a 4-hour

period Built to last for 10 years, perform daily cycles and provide high power all from a single, compact turnkey system. Source: Green Tech Media 22 2 Massachusetts - Pumped Hydro The Bear Swamp complex, completed in 1974, is on the Deerfield River in Rowe and Florida, Massachusetts. Bear Swamp comprises an underground pumped

storage generating station and two conventional hydroelectric stations. Produce a maximum of 600 megawatts of peaking power Source: DOE Energy Storage Database 23 2 Commercial - Beacon Power - Tyngsboro, MassachusettsFlywheel Supplies frequency regulation services to ISONE. 500 kW

Commissioned 2008 Source: DOE Energy Storage Database 24 2 BJ's Wholesale Club SolarCity / Direct Energy - (Framingham, MA) Operational since february 01/2015 Some results here: Better Buildings Case Study Limited information on results Uses: Electric Bill Management Electric Bill Management with Renewables

Electric Energy Time Shift Renewables Energy Time Shift Source: Better Buildings DOE Study 25 2 BJ's Wholesale Club SolarCity / Direct Energy - (Framingham, MA) BJs Wholesale Club also recommends that other companies that lease their building and are interested in solar energy determine the potential increase in equity value

solar brings to a building over time. While there will always be some negotiation between property owner and tenant regarding shared risks, having a building with lower operating costs than the building across the street provides a competitive advantage to both parties. Source: Better Buildings DOE Study 26 2 Community Energy Stora ge - Nottingham, UK

The project runs from 2014 to mid2018 and will explore the potential for using energy storage technologies such as batteries within communities to reduce their fuel costs and overall energy use. Project Sensible EU The overall objective of Project SENSIBLE is to develop, demonstrate and evaluate a storage-enabled sustainable energy supply for buildings and communities. Source: Mozes 27

2 Harvard Thermal Energy Storage Project Allston: ~8 MWe Thermal energy storage to reduce peak demand and improve efficiency of cooling provided to buildings Higher Round Trip Efficiency than traditional electric storage batteries Other thermal storage Projects in Florida and Chicago 28

2 University - Research UC Davis - Research project for Second life application of EV batteries Building a smart Electrical Energy Storage (EES) system(microgrid) using retired Electric Vehicle (EV) batteries The batteries in an electric vehicle are usually retired after their State of Health Source: UC Davis

Shipment of Nissan LEAF batteries, courtesy of Nissan, 4REnergy and Sumitomo Corp. 29 2 UC SAN DIEGO BMW Energy Storage Sy stem SGIP Energy Stora ge Project Panasonic / Sanyo E nergy System The BMW project is fully sponsored by BMW, and

will consist of utilizing used mini-E electric vehicle batteries, and will have about 108 kW of power capacity and 23 hours of energy storage. The system will be integrated with PV solar and possibly fast EV DC charging. The University of California, San Diego has been approved for incentives from Californias SelfGeneration Incentive Program for the installation of energy storage,

to be integrated with PV renewable generation Since July 2011, UCSD has served as the site host to a 30 kW/30 kWh PV integrated storage system from Panasonic/Sanyo. Source: David Weil - UCSD - Sustainability Manager 30 3 State of the Market

Economics of Energy and Opportunities January 2018 31 3 State of the Market Public Sector Resources: Federal State Level - MA Private Sector Resources: STEM SunPower EverSourc

e Enernoc Environmental Impact and remaining issues in the regulation of energy storage. 32 3 Public & Private Sectors 33 3

Federal Government Federal Energy Regulatory Commission (FERC) FERC has issued several orders and policy statements creating opportunities for energy storage resources in ancillary services and other organized wholesale markets Opportunities for Non-Generation Resources - FERC Order 890 Frequency Regulation - FERC Order 755 Opportunity for Ancillary Services Revenues - FERC Order 784 Interconnection of Storage Resources through Small Generator Interconnection Procedures (SGIP) - FERC Order 792 Additional Opportunities for Ancillary Services Revenues -FERC Order 819 Source: JD Supra Energy Storage Handbook

Federal Tax Incentives Some energy storage may qualify for an investment tax credit (ITC) or a production tax credit (PTC) when developed alongside qualifying resources Section 48 of the Internal Revenue Code(the Code) provides a 10% or 30% ITC Code Section 45 provides for PTCs when electricity produced by certain renewable energy facilities (usually wind) is sold to a third party during the ten years after the facility was placed in service. 34 3

Massachusetts Energy Storage Initiati ve - (ESI) Administration announced that it has set an aspirational 200 MWh energy storage target for electric distribution companies to procure viable and cost-effective energy storage systems by January 1, 2020.

Advancing Commonwealth Energy Storage - ACES Program to Support Innovative Storage Use Cases and Business Models RFP completed. Grants issued in September 2017. December 2017 Announced the awa rd of $20 million dol lars to support 26 p rojects SMART Program Creates Storage Adder for Solar

Projects Paired with Storage Energy Storage A dder Guideline 35 3 SunPower - SMART: Solar + Storage The SMART incentive will replace the current SREC program. SMART is a unique solar incentive: it provides a guaranteed set incentive for 20 years. Adders can help increase the value of your solar investment. The declining block incentive allows first movers to benefit the most. Source: SunPower

36 2 Eversource 1/2 1) Current projects underway: Martha's Vineyard: 5 MW (2019) Uses: Avoid the need to upgrade or add undersea cables Replace diesel generators Integrate additional distributed energy Wellfleet, MA: 12 MW (2020) Uses: Test as replacement for transmission cable Other current projects: Demand demonstration projects related energy efficiency. Partnerships with companies with latest technologies. Source: Eversource, DPU

37 2 2) Eversource 2/2 Upcoming Behind the meter projects : Currently working on a draft of the 3 year planning cycle (start 2019) with DPU. First Draft is due at end of April. Currently looking for partners to test technologies: Behind the meter battery, thermal, demand response, and software and controls. Partners: Looking for customers to enroll in pilot projects. Total funds available: US $21 (18 after admin. cost) million dollars. Behind the meter energy storage will be mostly lithium batteries. Lithium: It has the right energy density. Additional Projects:

EV make ready infrastructure. Launching in the near term. Source: Eversource, DPU 38 3 Enernoc Simple Enrollment: EnerNOC will help Customers evaluate DR programs and create a curtailment strategy before the Demand Response season begins. Maximize Revenue: Customers receive payments for participating. The more KW a customer can deliver, the higher the payments. No Penalties: Customer remains in full control of energy usage at all times and EnerNOC will shield customer from penalties if the site cannot curtail during an event (payments will simply reflect performance) Free Real time Energy Monitoring Platform: We install energy monitoring equipment at each location at no cost. Customers can access the data for Demand response

events and for day to day energy management 24/7/365 Source: ENERNOC 39 3 Source: STEM STEM - Lease + AI 40 3 Carbon Tax & Environmental Impact Data Analysis Does Energy Storage Reduce emissions?

According to study completed by Itron - in conjunction with EThree and WattTime - on behalf of the California Public Utilities Commision, energy storage by itself increases pollution. Further research is needed on this topic. Blockchain like technologies could enable better quality data points. Rate Design Updates Encourage load consumption at times when renewable oversupply conditions occur on the grid. This should encourage energy storage charging and discharging patterns that better align with GHG reductions and renewable integration

objectives. GHG Signal A GHG signal provided to participants in advance could help SGIP energy storage systems to operate. 41 3 Remaining Issues in MA While Massachusetts has looked to improve, and grow its energy storage initiatives, various concern remain: Uncertainty Regarding regulations Capacity vs ancillary services Net metering DPU researching the matter: Docket (17-146) Overall, the various regulatory entities remain open to the integration of

energy storage into the grid. A variety of policies are being tried out, and progress is being made in many areas, he said, but it might take a while to get the pieces to work together. Utility Dive Source: Utility Dive 42 3 Conclusion and discussion Energy Storage Market for commercial use is new, and fragmented. Business models vary, are evolving and adapting, and may not follow the traditional Tesla Model. (i.e. STEM) Follow closely ACES development and results ____ + Storage is currently the most economically feasible. There are various current opportunities for Compact members: SMART Program (Solar + Storage), Eversource

Partnerships: University Pilots,.... Storage + Real Time Data + Software management = more effective for GHG reductions 43 3 Resources News: Public Resources: Greentech Media BNEF Utility Dive MASS DOER Energy Storage (E SI)

MASSCEC ACES DOE Storage database FERC NEISO Compact Members: Compact: Veena Dharmaraj [email protected] .gov City of Cambridge: Nikhil Nadkarni [email protected] ov MIT: Research - Power Distributi on & Energy Storage Harvard: Jaclyn Olsen - OFS

[email protected] edu SEAS 44 End. 45 Thanks! Any questions ? You can find me at Ronald Quintero [email protected] 46 Credits Special thanks to all the people who made

this research possible: Jaclyn Olsen - Harvard Office for Sustainability Veena Dharmaraj - Cambridge Compact Many more at Alexandria, Boston Properties, EverSource, SunPower, Novartis, Google, UCSD,and the City of 47

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