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Dr Cliff Dansoh: Senior Lecturer – Renewable Energy.
Energy Storage July 2019
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Dr Cliff Dansoh Agenda Why we want storage 2
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Dr Cliff Dansoh But Why use Storage? 3
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What happens today Merit order
Dr Cliff Dansoh What happens today Merit order Source: 4
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What happens today Designed to operate on (near) continuous basis
Dr Cliff Dansoh What happens today Designed to operate on (near) continuous basis High upfront CAPEX Low or relatively low variable OPEX Low short run marginal costs (srmc) Source: 5
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What happens today Variable renewables
Dr Cliff Dansoh What happens today Variable renewables Dependent on weather / natural variability High upfront CAPEX Very low (almost zero) variable OPEX Very low (almost zero) short run marginal costs Source: 6
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What happens today Load following & peaking
Dr Cliff Dansoh What happens today Load following & peaking Designed to operate only some of the time Relatively high OPEX compared to CAPEX Likely to be part (inefficiently) loaded. Higher short-run marginal costs Source: 7
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What happens today Peaking plant ‘spark spread’ exercise
Dr Cliff Dansoh What happens today Peaking plant ‘spark spread’ exercise Do an exercise for LCOE of various storage types in different scenarios: Source: 8
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Spark spread costs The difference between:
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Spark spread costs The difference between: The value of the energy generated by a power station, CHP unit, etc., and The cost of the energy used to generate it. To calculate the figures quoted in energy market reports it is assumed that electricity is generated in a gas fired combined cycle power station with an average efficiency of 49.13%. Based extensively on :
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Spark Spread Example – Peaking Plant
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Spark Spread Example – Peaking Plant Power Price £/MWh – Gas price £/MWh Conversion Rate MWh/ therm Efficiency 49.13% Example:- Gas Price 53.65p/therm Power Price £56.00/MWh Formula Power price – (Gas price/ /Efficiency)
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Power Price £/MWh – Gas price £/MWh
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Spark Spread Example Power Price £/MWh – Gas price £/MWh Conversion Rate MWh/therm Efficiency 49.13% Example:- Gas Price 53.65p/therm Power Price £56.00/MWh Formula Power price – (Gas price/ /Efficiency) Spark Spread= £18.74
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Dark Spread – Intermediate Generation
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Dark Spread – Intermediate Generation Power Price £/MWh – Coal price £/MWh Conversion Rate 8.14 MWh/tonne of coal Efficiency 36% Example:- Coal Price $110.00/tonne Power Price £56.00/MWh Currency Conversion $1.32=£1 Power price – ((Coal price/currency rate)/Conversion rate/Efficiency)
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Power Price £/MWh – Coal price £/MWh
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Dark Spread Power Price £/MWh – Coal price £/MWh Conversion Rate 8.14 MWh/tonne of coal Efficiency 36% Example:- Coal Price $110.00/tonne Power Price £56.00/MWh Currency Conversion $1.32=£1 Power price – ((Coal price/currency rate)/Conversion rate/Efficiency) £27.56
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Power Price £/MWh – Fuel price £/MWh
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Renewable Generation Power Price £/MWh – Fuel price £/MWh Example:- Fuel Price $0.00/tonne Power Price £56.00/MWh Currency Conversion $1.32=£1 Power price – ((Fuel price/currency rate)/Conversion rate/Efficiency)
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Power Price £/MWh – Fuel price £/MWh
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Renewable Generation Power Price £/MWh – Fuel price £/MWh Example:- Fuel Price $0.00/tonne Power Price £56.00/MWh Currency Conversion $1.32=£1 Power price – ((Fuel price/currency rate)/Conversion rate/Efficiency) £56.00
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Lithium-ion batteries (LIB)
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Lithium-ion batteries (LIB) Typical values Installed cost ($/kW) 400 – 1000 Installed cost ($/usable kWh) 400 – 2000 Installed cost ($/kWhlifetime) 0.25 – 0.40 Life cycle (cycles) with moderate discharge 1000 – 5000 Self-discharge rate (% per month) 3 – 12 Roundtrip Efficiency (%) > 85 Source: 16
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Spreads Spread/ MWh (£) Spark 18.70 Dark 27.56 Renewable energy 56.00
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Spreads Spread/ MWh (£) Spark 18.70 Dark 27.56 Renewable energy 56.00 Energy storage 190 – 300 ($250 – 400) Renewable energy storage coal price: power price:
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Clean Spark/Dark Spread
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Clean Spark/Dark Spread Different fuels release different amounts of CO2 when burnt: Coal: 90.5kg / GJ = tonnes / MWh Gas: 56.1kg / GJ = tonnes / MWh These figures, combined with the thermal efficiency of the station, will determine how much CO2 is released per MWh of output.
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Clean Spark/Dark Spread
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Clean Spark/Dark Spread It can be seen that an efficient gas plant has a considerable CO2 emissions advantage over older coal stations: Coal: tonnes / 36% efficiency = tCO2 / MWh. Gas: tonnes / 49.13% efficiency = tCO2 / MWh.
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Clean Dark/Spark Spread - €23.00/ tonne CO2
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Clean Dark/Spark Spread - €23.00/ tonne CO2 If Emissions prices are at €23.00/ tonne CO2 then we can calculate the £/MWh. (Assume that €/£ is 1.15) Gas Plant €23 * = €9.45 or £8.22 Coal Plant €23 * = €21.78 or £18.94
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Clean Spark Spread = £10.52 Clean Spark Spread= £18.74 £8.22
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Clean Spark Spread Power Price £/MWh – Gas price £/MWh Conversion Rate Efficiency 49.13% Example:- Gas Price 53.65p/therm Power Price £56.00/MWh If Emissions prices are at €23.00 a tonne then we calculate the £/MWh. (Assume that €/£ is 1.35) Gas Plant €23.00 * = €9.45 or £7.00 Coal Plant €23.00 * = €21.78 or £16.14 Formula Power price – (Gas price/ /Efficiency) Clean Spark Spread= £18.74 £8.22 = £10.52
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Clean Dark Spread Formula £18.94 = £8.62 Clean Dark Spread = £27.56
If Emissions prices are at €23.00 a tonne then we calculate the £/MWh. (Assume that €/£ is 1.35) Power Price £/MWh – Coal price £/MWh Conversion Rate 7.055* Efficiency 36% Example:- Coal Price $142.00/tonne Power Price £56.00/MWh Currency Conversion $2.01=£1 Gas Plant €23.00 * = €9.45 or £7.00 Coal Plant €23.00 * = €21.78 or £16.14 coal price: power price: Formula Power price – ((Coal price/currency rate)/7.055/Efficiency) Dark Spread= £27.56 Clean Dark Spread = £27.56 £18.94 = £8.62
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Clean Dark/Spark Spread - €30.00/ tonne CO2
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Clean Dark/Spark Spread - €30.00/ tonne CO2 If Emissions prices are at €30.00/ tonne CO2 then we can calculate the £/MWh. (Assume that €/£ is 1.15) Gas Plant €30 * = €12.33 or £10.72 Coal Plant €30 * = €28.41 or £24.70
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Clean Spark Spread = £8.02 Clean Spark Spread= £18.74 £10.72
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Clean Spark Spread Power Price £/MWh – Gas price £/MWh Conversion Rate Efficiency 49.13% Example:- Gas Price 53.65p/therm Power Price £56.00/MWh If Emissions prices are at €23.00 a tonne then we calculate the £/MWh. (Assume that €/£ is 1.35) Gas Plant €30.00 * = €12.33 or £10.72 Coal Plant €30 * = €28.41 or £24.70 Formula Power price – (Gas price/ /Efficiency) Clean Spark Spread= £18.74 £10.72 = £8.02
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Clean Dark Spread Formula £24.70 = £2.86 Clean Dark Spread = £27.56
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Clean Dark Spread If Emissions prices are at €23.00 a tonne then we calculate the £/MWh. (Assume that €/£ is 1.35) Power Price £/MWh – Coal price £/MWh Conversion Rate 7.055* Efficiency 36% Example:- Coal Price $142.00/tonne Power Price £56.00/MWh Currency Conversion $2.01=£1 Gas Plant €30.00 * = €12.33 or £10.72 Coal Plant €30 * = €28.41 or £24.70 coal price: power price: Formula Power price – ((Coal price/currency rate)/7.055/Efficiency) Dark Spread= £27.56 Clean Dark Spread = £27.56 £24.70 = £2.86
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Lithium-ion batteries (LIB)
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Lithium-ion batteries (LIB) Typical values Installed cost ($/kW) 400 – 1000 Installed cost ($/usable kWh) 400 – 2000 Installed cost ($/kWhlifetime) 0.25 – 0.40 Life cycle (cycles) with moderate discharge 1000 – 5000 Self-discharge rate (% per month) 3 – 12 Roundtrip Efficiency (%) > 85 Aiming for $0.10 Source: 26
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Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering.
Spreads Spread (£) Spread €23.00/tCO2 (£) Spread €30.00/tCO2 (£) Spark 18.70 10.52 8.02 Dark 27.56 8.62 2.86 RE 56 Storage 76 RE Storage -20 coal price: power price: Does not make sense in this simple scenario, but then nor does £Ms investment in gas/ coal.
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Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering.
Spreads Spread (£) Spread €23.00/tCO2 (£) Spread €30.00/tCO2 (£) Spark 18.70 10.52 8.02 Dark 27.56 8.62 2.86 RE 56 Storage 76 RE Storage -20 coal price: power price: But when we have renewables there will be times when electricity is very cheap to compensate!
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Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering.
Spreads Spread (£) Spread €23.00/tCO2 (£) Spread €30.00/tCO2 (£) Spark 18.70 10.52 8.02 Dark 27.56 8.62 2.86 RE 56 Storage 76 RE Storage -20 coal price: power price: Also don’t forget about other cheaper technologies – flywheels, pumped storage, etc., which are already financially attractive!
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Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering.
What happens today Source: 30
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Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering.
Overview Source: 31
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Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering.
Spreads Spread (£) Spread €23.00/tCO2 (£) Spread €30.00/tCO2 (£) Spark 18.70 10.52 8.02 Dark 27.56 8.62 2.86 RE 56 Storage 76 RE Storage -20 coal price: power price: Basically, will take more than displacing peaking plants to make economic today!
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Grid storage applications
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Grid storage applications Application Description Storage system benefits Load levelling/ Arbitrage Purchasing low-cost off-peak energy and selling it during periods of high prices. Increases utilization of baseload power plants and decrease use of peaking plants. Can lower system fuel costs, and potentially reduce emissions if peaking units have low efficiency. Firm capacity Provide reliable capacity to meet peak system demand Replace (or function as) peaking generators. Operating Reserve Regulation Fast responding increase or decrease in generation (or load) to respond to random, unpredictable variations in demand. Voltage and frequency Reduces use of partially loaded thermal generators, potentially reducing both fuel use and emissions. Contingency (Spinning Reserve) Response to a contingency event – such as generator failure Source: 33
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Grid storage applications
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Grid storage applications Application Description Storage system benefits Ramping/Load Following Follow longer term (hourly) changes in electricity demand. Reduces use of partially loaded thermal generators, potentially reducing both fuel use and emissions. T&D Replacement and Deferral Reduce loading on T&D system during peak times. Provides an alternative to expensive and potentially difficult to site transmission and distribution lines and substations. Distribution deferral is not captured in existing markets. Source: 34
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Transmission and Distribution
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Transmission and Distribution Source: 35
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Current UK Revenue Streams
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Current UK Revenue Streams Avoided transmission network use of system (TNUoS) charges; Avoided distribution use of system (DUoS) charges; Fees for provision of capacity under the GB capacity market (CM); Avoided capacity market charges on suppliers (related to recovery of above CM fees) and; Provision of ancillary services Source: 36
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Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering.
Triad charges A levy set by the National Grid based on electricity consumption during the highest three half-hour periods of electricity demand between Nov and Feb. Pays for the cost of maintaining the electricity transmission network on and offshore. Calculated based on the average max demand across the three periods. Historically, they occur between 4pm and 7pm Monday to Friday Triad periods used may not be the exact three highest periods of demand as each period must by at least 10 days apart from the others. 37
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Source: https://www.stark.co.uk/resources/news/tnuos-charges-2018/
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Triad (£/y)=𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑑𝑒𝑚𝑎𝑛𝑑 𝑑𝑢𝑟𝑖𝑛𝑔 𝑡ℎ𝑒 𝑡ℎ𝑟𝑒𝑒 𝑇𝑟𝑖𝑎𝑑 𝑝𝑒𝑟𝑖𝑜𝑑𝑠 𝑥 𝑟𝑒𝑔𝑖𝑜𝑛𝑎𝑙 𝑡𝑎𝑟𝑖𝑓𝑓 Source: 38
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Reducing power use, but transmission ops costs still need to be paid.
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Triad (£/y)=𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑑𝑒𝑚𝑎𝑛𝑑 𝑑𝑢𝑟𝑖𝑛𝑔 𝑡ℎ𝑒 𝑡ℎ𝑟𝑒𝑒 𝑇𝑟𝑖𝑎𝑑 𝑝𝑒𝑟𝑖𝑜𝑑𝑠 𝑥 𝑟𝑒𝑔𝑖𝑜𝑛𝑎𝑙 𝑡𝑎𝑟𝑖𝑓𝑓 Reducing power use, but transmission ops costs still need to be paid. Source: 39
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Avoided transmission network use of system (TNUoS) charges
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Avoided transmission network use of system (TNUoS) charges Triad benefits (can be 5 – 10% of transmission cost saving) if generator can rely on being dispatched in the winter peaks. Varies based on location: The London zone has the highest charge, The lowest benefits are in Northern Scotland Source: 40
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Avoided Distribution Demand Capacity Charges and Generation DUoS
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Avoided Distribution Demand Capacity Charges and Generation DUoS Charge to cover the costs of the electricity distribution network. The DUoS charge is based on the amount of electricity consumed by your business. Covers the cost of maintaining the local electricity distribution network infrastructure. Charges vary by region and are time banded to discourage use during high demand periods, such as between 4pm-7pm. 41
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Avoided Distribution Demand Capacity Charges and Generation DUoS
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Avoided Distribution Demand Capacity Charges and Generation DUoS Two sets of Distribution Use of System (DUoS) charges. Charges on load (demand) that can be mitigated via on-site storage reducing peak demand and managing maximum demand and power factor. Negative charges on generation which storage facilities can access at peak demand periods, where storage is not co-located with (and netted off) demand. 42
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Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering.
Capacity Market Fees Available to generators and DSR (demand side response) providers if they make capacity available during peak. Based on auction held four years in advance, with the price set on a clearing basis. 43
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Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering.
Capacity Market Fees In addition, there are penalties for non-delivery, which apply if generators fall short of their agreed levels after a 4 hour notice period. This notice period has the potential to dictate storage/ discharge characteristics 44
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Capacity Market Fees Year Price (£/kW/Yr) 2014 19.40 2015 18.00 2016
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Capacity Market Fees Year Price (£/kW/Yr) 2014 19.40 2015 18.00 2016 22.50 2017 8.40 2018 ??? 45
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Ancillary Services These include: Frequency response;
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Ancillary Services These include: Frequency response; Reactive power that can be provided on a continuous on call basis to reserve services such as fast reserve and short term operating reserve (STOR). The ability to provide most of these ancillary services depends on the facility retaining a significant amount of energy in reserve. 46
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Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering.
Ancillary Services This may not be viable in a situation where a storage facility is drawing down its reserve to capture the benefits TNUoS and DUoS peak time charges at 4-7pm every weekday. May be difficult to design systems that can capture more than one of the benefits. 47
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Avoided network upgrade costs
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Avoided network upgrade costs Defer or avoid the need to upgrade electrical transmission and distribution (T&D) equipment or Extend the life of existing T&D equipment. 48
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Avoided network upgrade costs
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Avoided network upgrade costs Distribution systems must be sized for peak demand. As demand grows new systems (lines, substations, etc.) must be installed. May only be needed for a few hours per year. May be able to avoid/ defer by siting storage close to load. Charge off peak Discharge during peak – when system would otherwise be overloaded. Can also reduce line-loss rates, which occur at high demand due to resistive load losses. 49
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Overview Source: https://www.nrel.gov/docs/fy10osti/47187.pdf
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Overview Source: 50
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Avoided network upgrade costs
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Avoided network upgrade costs Indication of the potential benefits is available from the Smarter Network Storage (SNS) project at a Leighton Buzzard sub-station. 6MW storage (battery based) facility avoided the need for £5.1m of conventional reinforcement or £850/kW installed. On a 10 year deferral period and applying a suggested 7.2% WACC for DNOs, this works out at £121/kW/yr. Approximately the same as EPRI in the US for benefits of deferral of transmission and distribution upgrades. 51
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A view of the potential future - California
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. A view of the potential future - California The Duck Curve Load met by renewables (Solar) Curtailment Source: 52
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A view of the potential future - California
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. A view of the potential future - California The impacts Wholesale energy market prices at peak (5 p.m. to 8 p.m) have increased to $60/MWh, compared to about $35/MWh in the same time frame in 2016. Drastic decrease in the midday prices, nearing $15/MWh in 2017 from around $27/MWh in 2015. Source: Source: and 53
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A view of the potential future - California
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. A view of the potential future - California Potential solutions Installing more dispatchable generation Orienting some solar collectors toward the west to maximise generation near sunset. Energy Storage including: Source: Pumped-storage hydroelectricity Battery storage power stations Solar thermal energy with thermal energy storage Ice storage air conditioning Use of batteries in electric vehicles for temporary storage (vehicle-to-grid) 54
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Underground storage tanks
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Underground storage tanks University of Southern California 3.2 million gallon TES tank Chilled water is circulated around the campus during the day Water chilled an night using cheap electricity Reduces electricity usage by 4500 MWh – US$0.4 million Reinforced concrete thermal store Source: 55
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A view of the potential future - California
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Dr Cliff Dnsoh A view of the potential future - California Potential solutions Energy demand management, including: Transitioning to more efficient lighting systems, such as compact fluorescent and LED lighting Time-of-use pricing (TOU) and real-time pricing Smart grid technology Source: 56
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End User (Behind the meter) storage applications
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. End User (Behind the meter) storage applications Source: 57
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End User (Behind the meter) storage applications
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. End User (Behind the meter) storage applications Application Description Storage system benefits End-Use Applications TOU Rates Purchasing low-cost off-peak energy and using it during periods of high prices. Increases utilization of baseload power plants and decrease use of peaking plants. Can lower system fuel costs, and potentially reduce emissions if peaking units have low efficiency. Demand Charge Reduction Provide reliable capacity to meet peak system demand Replace (or function as) peaking generators. Backup Power/ UPS / Power Quality Fast response increase in generation (or decrease load) to respond to a contingency such as a local loss of supply. Source: 58
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Different types of Storage for different tasks?
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Different types of Storage for different tasks? Source: 59
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Starting to see hybridisation
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Starting to see hybridisation Plus Source: 60
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Conclusion There are other options though!
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Conclusion There are a number of different types of energy storage. They are likely to be pivotal for the future energy mix: As other established generators are removed; and To optimise use of intermittent generators Grid management is important, but The future of ‘behind the meter’ could also be significant. There are other options though! 61
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Conclusion Supply and Reserve sharing
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Conclusion Supply and Reserve sharing Balancing of RE and conventional supplies over greater geographic areas Use of more flexible generators Deploying more flexible conventional generators Demand side response Using TOU to discourage use at peaks. Curtailment Switching off RE to allow conventional power to carry load 62
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Conclusion New controllable loads
Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering. Conclusion New controllable loads Hydrogen via electrolysis, electric transportation, etc. Likely that many of these options will be cheaper than storage in specific scenarios! 63
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Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering.
Conclusion I’m sure you will be hearing a lot more about energy storage during your career! 64
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Dr Cliff Dansoh: Senior Lecturer – School of Mechanical and Automotive Engineering.
Any questions? 65
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