1. Meet the Battery Revolution
36th USAEE/IAEE North American Conference
Jason Burwen, VP of Policy
September 12, 2018

2. ESA represents a diverse membership
ESA’s mission is to accelerate the widespread use of competitive and reliable energy storage systems in North America
Established 28 years ago
Diverse membership— vendors, developers, independent generators, utilities & other power sector stakeholders
Federal, regional, & state policy engagement

3. Energy Storage = Flexibility
Supplies precise amount of electricity exactly when (and where) it is most needed, regardless of when it was generated

4. Why is storage important?
Storage optimizes use of the grid & enables system transformation
Saves households & businesses money – avoid excess capacity to meet peak system & local demands, optimize use of other grid assets  lower rates
Makes the grid more reliable & resilient – balance supply & demand fluctuations; mitigate supply disruptions and outages; manage planning uncertainty and risks
Integrates diverse energy mix – compensate natural variability of renewables and makes them “dispatchable;” makes nuclear flexible; reduces gas cycling; increases distributed resource hosting capacity; makes demand more flexible
Creates businesses & jobs – new, growing industry offer investment and employment opportunities across the map

5. Mechanical Storage
Battery Storage
Thermal Storage

6. Why all the buzz on battery storage?
Located on all part of the grid at any size
Utilities, customers, and third-parties all operating
Systems from 5 kW to 30,000 kW in use
Quick to deploy
MW-scale deployments <1 year from contract
Uniquely flexible & expanding performance capabilities
Instantaneous response and ramp, bi-directional
Capable of multiple services
Grid balancing, backup, system capacity, network capacity, curtailment avoidance, energy arbitrage
Fastest growing storage type
Costs declining rapidly

7. Battery storage growing

8. Battery Storage Installed Costs Declining
Cost declines of 8-15% year-on-year expected through mid 2020s
4-hour Lithium-ion battery Installed Cost ($/kW)
Nitzan
(we may add a slide on cost-effectiveness today)

9. Battery storage bids & contracts increasingly common
Notable recent procurements
PG&E (California): 568 MW of 4-hr storage proposed (one project 300 MW, 4-hr)
Xcel (Colorado): 225 MW of 4-hr storage approved
NV Energy (Nevada): 100 MW of 4-hr storage proposed
APS (Arizona): 106 MW of storage solicited in RFP
Xcel (Colorado): $30-32/MWh PPAs for 4-hr storage plus solar
Received bids for 8-hr and 10-hr storage
NIPSCO (Indiana): average $35/MWh for storage plus solar
Storage in over 20% of bid capacity

10. Overview of Storage Applications and End-Users
Increase transmission capacity & extend asset life
Complement or alternative to peaking generation
Avoid curtailment of renewables/nuclear
Reduce generator cycling
Maintain grid stability
Residential customer demand for solar-paired storage
Increase distribution capacity & extend asset life
C&I customer demand charge management + power quality improvement
Microgrids for resilience
Sky

11. Storage in Resource Adequacy & Infrastructure
System capacity/peak supply Network capacity/T&D assets
In development
SDG&E/Fluence 30 MW, 4-hr
SCE/Tesla 20 MW, 4-hr
SCE/Fluence 100 MW, 4-hr
In development
APS/Fluence 2 MW, 4-hr
National Grid/NextEra 5 MW, 8-hr
HECO/Stem 1 MW aggregation

12. Storage becoming a mainstream capacity option

13. Examples of battery storage as capacity
Operating
SCE/Tesla (CA) 20 MW, 4-hr
SDG&E/Fluence (CA) 30 MW, 4-hr
Approved / in development
SRP/Fluence (AZ) 10 MW, 4-hr
SCE/Fluence (CA) 100 MW, 4-hr
PG&E/Dynegy (CA) 300 MW, 4-hr
KIUC/Fluence (HI) 20 MW, 5-hr solar-paired
Xcel (CO) 3 projects 225 MW, 4-hr solar-paired
NVE (NV) 2 projects 100 MW, 4-hr solar-paired
PG&E/Tesla (CA) 182 MW, 8-hr

14. Enabling role for infrastructure
Extend the life of existing wire assets
Enhance resilience of network & critical infrastructure
Increase hosting capacity to enable customer choice
Adapt to uncertain futures: supply mix, load & DER forecasts
Enable the demands of increasingly electrified economy
Transportation
Industrial processes
Ubiquitous computing/IoT
Heating? Desalination?
If containerized/modular… assets cannot be stranded

15. Rates As A Driver of Customer Storage
Medium C&I Energy Storage Returns
from Demand Charge Management Alone
2016
2022
IRR 5%-10%
IRR 10%+
IRR 5%-10%
IRR 10%+
Source: GTM Research The Economics of Commercial Energy Storage in the U.S.: The Outlook for Demand Charge Management, 2016

16. Storage pairing with diverse assets
Gas + Battery
Coal + Battery
Wind + Battery
Solar + CHP + Battery

17. Energy Storage & the Duck Curve
RAMPING / FLEXIBLE CAPACITY
Sky
-short, steep ramps – when the ISO must bring on or shut down generation resources to meet an
increasing or decreasing electricity demand quickly, over a short period of time;
-oversupply risk – when more electricity is supplied than is needed to satisfy real-time electricity
requirements; and
-decreased frequency response – when less resources are operating and available to
automatically adjust electricity production to maintain grid reliability.
To reliably operate in these conditions, the ISO requires flexible resources defined by their operating
capabilities. These characteristics include the ability to perform the following functions:
•sustain upward or downward ramp;
•respond for a defined period of time;
•change ramp directions quickly;
•store energy or modify use;
•react quickly and meet expected operating levels;
•start with short notice from a zero or low-electricity operating level;
•start and stop multiple times per day; and
•accurately forecast operating capability.
CURTAILMENT AVOIDANCE

18. As renewables increase, value of flexibility increases
Twin measures for reliability
Analysis of 40% RE in PNM’s 2017 Integrated Resource Plan
Meet highest period of demand
Meet fastest change in net load

19. Roles of Storage in Cleaner Grid
Avoiding peakers & related infrastructure
Storage already substituting gas capacity in CA, AZ, HI
Integrating higher levels of renewables
Ramping & other fast-balancing; curtailment avoidance to increase GHG reductions
Enabling more rooftop solar, EVs, and other DERs
Storage already enabling DERs in CA, AZ, HI, NY
Making the grid more efficient
Increase generating fleet efficiency; multiple values can be stacked; enables right-sized & just-in-time capacity

20. Not all benefits are monetized
Massachusetts State of Charge report modeled 1,766 MW of battery storage deployment in MA (in ISO-NE)
Non-monetized system benefits are >2x accessible revenues
Reducing system peak + local peak = 50% of system benefits

21. What Are The Hurdles To Deployment?
No price signal or product to capture VALUE of storage
Rate design
Utility programs
Wholesale market products
Unable to COMPETE in all grid planning and procurements
Integrated resource planning
Distribution planning
Wholesale market rules
Cannot ACCESS grid or multiple programs
Interconnection
Multiple-use frameworks
Sky

22. Thank you