November 19 th , 2013 10:00am – 11:30am NY Energy Storage Initiative Update Panelists: H.G. Chissell, Viridity Energy , Senior Vice President, Strategic Accounts (Moderator) Anthony Barna, Con Edison , Engineer, Research and Development John Cerveny, NY BEST , Director of Resource Development Harris Schaer, NYSERDA , Project Manager Shellka Arora, Chadbourne & Parke , Associate, Project Finance Ben Pickard, Safari Energy , VP Energy Efficiency @AGRION 11/20/2013 AGRION.ORG 1
Technology & Use Technology and Application Overview John Cerveny Agrion Energy Storage Initiative Update November 19 th , 2013
Technology & Use Energy Storage Examples Okinawa Seawater Pumped Storage Compressed Air Energy Storage Sodium Sulfur batteries at Wind Farm Huntorf Germany (290 MW), McIntosh Alabama (110 MW) Xcel Energy, Luverne, MN Molten salt thermal storage Andasol, Spain Conventional batteries: Lead acid Vanadium Redox Flow batteries Southern California Edison Chino facility 200kW, 2 hour (10 MW, 4 hour)
Technology & Use New York State examples Beacon Power Corp. , Stephentown, NY AES in Johnson City, NY* 20 MW frequency regulation using 8 MW lithium-ion storage Flywheels system for frequency regulation Urban Electric Power, City College Low cost zinc-manganese * Moved 6/13 dioxide for demand management
Technology & Use Energy Storage by Size and Application
Technology & Use Key Applications for Storage • Energy Generation Grid Operations Management • Frequency Regulation • • Defer System Demand Charge Upgrades Reduction (Peak • Renewable Firming Shaving) • Transmission • Capacity (local) • Congestion Relief Optimize Energy Cost • Spinning/non- (Time Shifting) • Improve System spinning reserve • Reliability Maintain Power • Black Start Quality • Voltage Support and • Power Quality • Avoid Energy Uninterruptible Power Dumping Supply • • Time Shifting Energy Integrate Distributed Generation
Technology & Use Energy Storage in Buildings Benefits • Provide emergency backup • Increase resiliency of the grid • Provide year-round benefits • Manage demand charges • Increase efficiency • Participate in demand response markets • Facilitate renewable energy integration Source: Demand Energy
Technology & Use Energy Storage in NYC - Examples
Technology & Use Energy Storage in NYC - Examples
Policy Policy Snapshot for Energy Storage in NYC
Policy Near term benefits (utility scale) • Help integrate higher levels of renewable generation on the grid. • Improve power quality and reliability. • Provide energy/demand cost savings via load leveling. • Decrease and/or defer transmission and distribution infrastructure investment. • Where applicable, reduce sizing of distributed generation systems.
Policy Potential future benefits • Mitigation of demand variability from electric vehicles • Improved effectiveness of demand response (via targeted dispatch) • Improved grid reliability and efficiency by improving power quality at the edges of the distribution network
Policy Customer – Utility value interface • Technology and demonstration incentives • Rate tariffs • Demand response programs • Tech transfer
Policy Recent Customer-Sited Energy Storage Goals • California AB 2514 – 200 MW (of 1325 MW) by 2020 2014 2016 2018 2020 Total Customer Storage (all of CA) 23 35 58 84 200 • New York – Reliability Contingency Plan (Order posted 11/4/2013) – Energy storage as part of 125 MW goal for Energy Efficiency, Demand Reduction and CHP – Con Edison territory, operational by Summer 2016 – $219 Million Program Budget
Policy NYS incentive opportunities for energy storage Current Programs – Development/Demonstration Stage • NYSERDA PON 2458 – NY-BEST Bench to Prototype Solicitation – Competitive, open to NY-BEST members – Up to 50% cost share, max. $250,000 Current Programs – Established Technologies • NYSERDA PON 1219 – Existing Facilities Program: Energy Storage Incentive – Open enrollment, performance-based funding – Commercial & industrial properties – Up to 50% cost share, max $2,000,000 – Incentive: $600/peak-kW reduced
Financing Three-pronged approach • Existing financing sources and incentives • Tools to develop business models • Data banks
Financing Existing financing sources • 1703 Loan Program: Supports innovative clean energy technologies that are typically unable to obtain conventional private financing due to high technology risks • Eligibility: • Applicant must be located in the U.S. (foreign ownership or sponsorship is permissible as long as the project is located in the U.S.) • Employ a new or significantly improved technology that is not a commercial technology • Meet Davis Bacon requirements • ARPA-E: Advances high-potential, high-impact energy technologies that are too early for private-sector investment • Since 2009 ARPA-E has funded over 285 projects • Example: CUNY Energy Institute Low-Cost Grid-Scale Electrical Storage Project Using a Flow-Assisted Rechargeable Zinc-Manganese Dioxide Battery • Energy Storage Technology Advancement Partnership • NYSERDA
Financing Existing financing sources • Existing Incentives • IRS Rulings: • Number 201142005 • Number 201208035 • Number 201308005 • New York’s Green Bank • $1 billion dollar initiative to accelerate the deployment of clean energy through a variety of financing tools targeted at alleviating financing barriers • Financial products: • Credit enhancement • Loan loss reserves • Loan bundling to support securitization • Full operation is expected in the first quarter of 2014
Financing Tools to develop business models
Financing Data Banks • Why? • Utilities and financiers are risk averse • Market is replete with subsidized projects • There is a need for projects that are profitable on their own and can attract private investment • Key data for valuation mechanisms • Monetization of value streams • Technical performance • Construction and operating costs
Business Case Tool Building The Business Case for Energy Storage in NYC
Business Case Tool Revenues and Benefits Peak Demand (Revenue Generating) Demand charge Demand charges as per utility tariff account for 30-50% of annual electric charges management for large energy users, especially June through September. ~$300 per watt annually. Demand response By committing to curtail electric consumption at peak hours, large energy users (bundled by Demand Response providers) earn annual and per-event payments from ConEd and NYISO: ~$135 per watt annually. Commodity arbitrage Via storage, building consumes lower-cost variable rate electricity at night, typically using less costly power (30% savings on supply, 15% on all-in electric rate) System Performance & Reliability (Risk Mitigation) Renewable Integration Overcome distributed generation constraints: not being able to backfeed to grid e.g. Emergency Backup By combining storage with onsite renewable generation, store enough power during Power the day to power small-scale emergency electric loads in the event of grid failure. Frequency Regulation Address short-term supply-demand imbalances in grid (not revenue generating in NYC yet – coming soon).
Solution & Technology Selection • Site Specifics • Project Sizing – DG colocation – Physical footprint – Capital plan – HVAC system – Utilization factor – Load analysis – Peak analysis 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 500 - 7/19/2013 12:00 AM 7/19/2013 2:00 AM 7/19/2013 4:00 AM 7/19/2013 6:00 AM 7/19/2013 8:00 AM 7/19/2013 10:00 AM 7/19/2013 12:00 PM 7/19/2013 2:00 PM Business Case Tool 7/19/2013 4:00 PM 7/19/2013 6:00 PM 7/19/2013 8:00 PM 7/19/2013 10:00 PM 7/20/2013 12:00 AM 7/20/2013 2:00 AM 7/20/2013 4:00 AM 7/20/2013 6:00 AM 7/20/2013 8:00 AM 7/20/2013 10:00 AM 7/20/2013 12:00 PM 7/20/2013 2:00 PM 7/20/2013 4:00 PM 7/20/2013 6:00 PM 7/20/2013 8:00 PM 7/20/2013 10:00 PM
Business Case Tool Monetization & Risk • Contracts Large (>1.5MW peak D) – Utility rate schedule EL-9 vs. SC14 (standby) – Energy supplier – Tenant lease arrangements Levelized vs. time of day – System operation pricing; flexibility – Demand response provider Revenue growth rates • The Future Changes to building load – Revenue forecasts Market vs. contracted – Revenue risks revenues: bankability – Technology experience curve Batteries: cost and – Warranties & Guarantees durability improvements
Business Case Tool NYC Projects Database 10.4 MW 62 MWh 20 Projects 46.6 12 7,774 15.0 4 4 2,235 350 0.5 Short Duration Peak Duration Thermal Short Duration Peak Duration Thermal Short Duration Peak Duration Thermal Battery Battery Storage Battery Battery Storage Battery Battery Storage • Short Duration Battery defined as < 3 hours (mostly Green Charge Networks). • Long Duration Battery defined as 6 hours or more. • Thermal Storage currently just Calmac projects. Obvious gaps in the database! Help us build it.
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