Economics of storage local meeting july 8 2009
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ECONOMICS OF STORAGE LoCal Meeting - July 8, 2009. Presented by Mike He and Prabal Dutta. Lots of Storage Technologies. Pumped Water. LiSulphur. NiMH. SMES. Supercap. NiCad. Flywheel. EEStor. Li+. Thermal. Compressed Air. LiPoly. LiSulphur. Why Store Energy?. Peak-to-Average

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ECONOMICS OF STORAGE LoCal Meeting - July 8, 2009

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Economics of storage local meeting july 8 2009

ECONOMICS OF STORAGELoCal Meeting - July 8, 2009

Presented by Mike He and Prabal Dutta


Lots of storage technologies

Lots of Storage Technologies

Pumped Water

LiSulphur

NiMH

SMES

Supercap

NiCad

Flywheel

EEStor

Li+

Thermal

Compressed Air

LiPoly

LiSulphur


Why store energy

Why Store Energy?

  • Peak-to-Average

    • Reduce electricity rate by shaving peak load

  • Match Supply and Demand

    • When supply/demand is inelastic or intermittent

  • Economic Arbitrage

    • When price of electricity varies substantially and

    • An efficient market exists to buy and sell real energy


Peak to average

Peak-to-Average

  • When electricity cost is set by peak power draw

    • Peak-shaving yields big dividends

    • Benefits accrue at all times, not just at peak load times

  • Load shift if possible

  • Generate electricity locally if feasible economically

  • LoCal

    • Buy electricity when local demand is low

    • Convert and store electricity for later use

    • Convert and use electricity when highest local demand


Match supply and demand

Match Supply and Demand

When supply/demand is inelastic or intermittent

Solar

S/D well-matched for typical industrial loads; storage overkill

S/D poor-match for early morning or evening residential loads

Wind

S/D matching is variable, TBD

Statistical multiplexing plays a role in smoothing out

LoCal

Store when supply is high but demand is low

Use when supply is low but demand is high


Economic arbitrage

Economic Arbitrage

When a sufficient wholesale price difference exists

Buy electricity when price is low

Convert and store electricity for later sale

Convert and sell electricity when price is high


Ieso a concrete analysis

IESO: A Concrete Analysis

http://www.iemo.com/imoweb/marketdata/marketToday.asp ($1 CAD = $.86 USD)


Ontario ieso july 7 2009

Ontario IESO (July 7, 2009)

  • Wholesale electricity price ($CAD/MWh)

    • Min:$3.52

    • Avg:$20.99

    • Max:$42.32

    • Range:$38.80

  • Average hourly demand

    • Min:15,000 MW

    • Avg:17,162 MW

    • Max:19,570 MW

    • Range:5,070 MW


Ontario ieso july 7 20091

Ontario IESO (July 7, 2009)


Ontario ieso july 7 20092

Ontario IESO (July 7, 2009)

?


Ontario ieso july 7 20093

Ontario IESO (July 7, 2009)


Storage economics

Storage Economics

  • To be marginally viable, must satisfy:

    • CostPUE / PriceDeltaPUE < CycleLife

    • CostPUE / PriceDeltaPUE => cycles needed to profit

  • Where

    • CostPUE is Cost per unit of energy storage

      • Li+ (e.g. $300/kWh)

      • Pumped Hydro ($10-$45/kWh)

    • PriceDeltaPUE is max(price) - min(price) per unit energy

    • CycleLife is number of cycles of storage technology


Storage economics1

Storage Economics

  • IESO Case Study on July 7, 2009

    • PriceDeltaPUE = $38.80

  • (CostPUE / PriceDeltaPUE / CycleLife) ?<? 1

  • TechCostPUEPDPUECycleLifeLHS

  • Li+$300/kWh$.0388/kWh12006.44

  • Pump. Hydro$45/kWh$.0388/kWhInf (need 1160)<1


Energy density

Energy Density


Economics of storage local meeting july 8 2009

Cost


Lifetime vs efficiency

Lifetime vs Efficiency


Per cycle cost

Per-cycle Cost


Summary table

Summary Table


Sample load profiles

Sample Load Profiles


Sample load profiles1

Sample Load Profiles


Marginal revenue potential drops quickly and varies

Marginal revenue potential drops quickly and varies

Mild Spring Weekend Day

Warm Summer Weekday


Storage power density matters small window to buy cheap

Storage power density matters:Small window to buy cheap

Mild Spring Weekend Day

Warm Summer Weekday

1x

Power Density

2x


Buy low sell high cycle rate is limited must hold for a while

Buy-low/sell-high cycle rateis limited: must hold for a while


Unexpected arbitrage can create opportunistic profits

Unexpected arbitrage cancreate opportunistic profits

http://www.iemo.com/imoweb/marketdata/marketToday.asp ($1 CAD = $.86 USD)


Must disentangle residential commercial industrial and night life party loads

Must disentangle residential, commercial, industrial, and night life/party loads

Ontario

Night Life


Limitations

Limitations

  • Assumes Time-of-Use pricing

  • Assumes zero price-elasticity

    • For marginal profit potential analysis

    • Likely reality: price sensitivity high at peak load times

  • Garbage-in/Garbage-out

    • Wholesale prices and load profiles are average values

    • No distinction between $USD and $CAD

  • Only a marginal viability analysis

    • Average-case viability much lower


Takeaways

Takeaways

  • Storage still has a long way to go for economic viability in financial arbitrage

  • Peak to average case may be more economically viable

  • Cost, power density, efficiency, cycle life are important factors

  • Need a metric for: Capacity X CycleLife

  • 100W lightbulb for a day = Raising a car ~1km


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