Hawaii Energy Storage Seminar: Utility Regulation Service

1. Hawaii Energy Storage Seminar: Utility Regulation Service John D. Boyes Sandia National Laboratories Energy Storage and Distributed Resources jdboyes@sandia.gov 505-845-7090 www.sandia.gov/ess June 16, 2010 Sandia is a multi-program laboratory operated by Sandia Corporation, a Lockheed Martin Company, for the United States Department of Energy’s National Nuclear Security Administration under contract DE-AC04-94AL85000. SAND2009-2801P

2. Energy Storage for Non-Peak Shaving Applications Energy Storage Systems with short duration discharges (~15 min max) • Applications • Frequency regulation • Power quality (UPS) • Renewable integration and ramping • Technologies • Batteries • Flywheels • Supercapacitors

3. How Regulation Works • Regulation – balancing utility generation with demand • Up regulation – when demand exceeds generation (discharge) • Down regulation – when demand is below generation (charge) • ISO regulation signal every 4 seconds • Conventional generators must respond within 5 minutes • Storage systems can respond within seconds • Current business models require a market mechanism Discharge Courtesy: Beacon Power Charge

4. Example of Regulation Demand from AES Frequency Regulation is a near zero-energy service compensating for the minute to minute fluctuations in total system load and uncontrolled generation. Thus it is an ideal candidate to be supplied by storage.

6. Storage Significantly Reduces CO2 emissions 80% Reduction From KEMA study: 20MW of Regulation over a 20-year operating life Courtesy: Beacon Power

7. Market Changes Are Necessary for Energy Storage to Provide Regulation Service • Business model for Beacon and AES • Own and operate the storage system • Sell regulation service into an open, day ahead market • FERC and ISO’s have developed ancillary market rules for storage • Regulation Service is the first example • Energy storage is a separate asset class • Dispatch fast performers first • ISO manage storage state of charge (SOC) • Adjust set point every 5 minutes • 15 minute storage duration provides 100% coverage

8. Wind Ramp Rate Control • = ~ +180 MW/ 30 min • For 60 minute ramp requires absorbing 45MWh into storage • = ~ -120 MW/ 2 ½ hrs • For 5 hour ramp requires discharging 150MWh from storage • A 20 MW, 15 minute Beacon Flywheel system contains 5 MWH PNM Data from a 200 MW wind system Red line is wind system output Blue line is the Area Control Error (ref only) Black line is eyeball linear ramp rate Green line is eyeball doubling of ramp duration

9. 1st 20 MW Flywheel Regulation PlantNYISO – Stephentown, NY • May 2008 FERC approved market rules • July 2009 DOE Loan Guarantee • October 2009 NY PSC approved project • November 2009 Ground breaking • 4Q 2010 4 MW capacity • 1Q 2011 20 MW capacity

10. 2nd 20 MW Flywheel Regulation Plant PJM Interconnection • Awarded $24M DOE stimulus grant • Established site control at two potential sites in PJM area • Interconnection agreements under negotiation

11. Operational 2 MW Advanced Lithium-ion regulation system at an AES Substation

14. Spinning Reserve Capacity 12 MWLos Andres, Chile Largest Lithium-ion battery system in service on the power grid

15. Energy Storage SystemsServe High Power/High Cycle Applications • Regulation Service is a reality • Regulatory changes were required • Renewable integration is becoming a reality • As penetration levels increase, storage will become a viable option • Renewable ramping requires large systems