An inside look at using energy storage to integrate renewable resources


Peter Maloney


Sept. 18, 2017

Integrating renewable energy is touted as one of the chief benefits of energy storage, but much less is said about how it actually works.

California is a leader in both renewable energy resources and energy storage. The state has one of the highest renewable portfolio standards in the U.S., mandating that 50% of all electric power be sourced from renewable resources by 2030, and the state has the first and some of the most robust incentives for energy storage.

AB 2514 requires the state’s three investor owned utilities to procure 1.3 GW of energy storage by 2020, and AB 2868 requires each IOU to deploy an additional 166 MW of behind-the-meter and/or distribution tied storage.

The IOUs are already well on their way to meet their goals. Southern California Edison has 400 MW of storage in its portfolio toward its 582 MW target. But installing energy storage is one thing, using it to meet other goals is another.

California is a restructured state, so utilities there generally do not own or build power plants. Nor do utilities control the dispatch of those plants. That is the job of the California ISO.

Soaking up solar power during the day and dispatching it in the evening is often cited as a renewable-enabling use for energy storage, but in practice the renewable-enabling potential of storage is often not so simple.

SCE, for instance, does not necessarily make decisions to charge batteries when solar power output is abundant and to discharge them when solar power begins to wane. But the utility still owns some generation assets and is responsible for how it bids those assets into CAISO’s real-time and day-ahead energy markets.

Storage + gas

SCE has found that one of the not so obvious, but most effective uses for energy storage is combining it with a conventional power plant. In April, SCE installed what it called the “world’s first” low-emission hybrid battery storage-gas turbine peaker system. The so-called Hybrid Enhanced Gas Turbine (Hybrid EGT) was the result of a partnership between SCE, GE and Wellhead Power Solutions. SCE installed the systems at substations in Norwalk and Rancho Cucamonga. Each system pairs an 11 MW, 4.3 MWh battery with a 50 MW peaker

“It is a novel way of installing storage,” Vibhu Kaushik, principal manager, asset management and generation strategy, at SCE told Utility Dive.

Adding batteries to the turbines means that the machines are always on and can be used respond to CAISO’s frequency regulation market. The peakers were already participating in that market, but the batteries let them respond more quickly and be relieved by the peakers when they ramp up five or 10 minutes later. Those five minutes add up. Over the life of the plant – it is about seven years into an expected 40 year life – the batteries will reduce operating costs by 60%, and the batteries will also reduce greenhouse gas emissions and cut water consumption by 2 million gallons a year, Kaushik said.

SCE is pleased with the program and looking at adding storage to more of its peakers and even to some of its hydroelectric plants. Even though hydropower ramps quickly and has traditionally been used for frequency response, adding storage would improve a hydro asset’s response time and provide more flexibility, Kaushik said.

SCE owns about 3,200 MW of generation assets, including 33 hydroelectric plants, five gas-fired peaking plants, and one combined-cycle gas plant. In addition, due to the storage procurement mandated by the state in response to the 2015 Aliso Canyon gas leaks, SCE owns one of the largest energy storage facilities in the country.

Working with Tesla, SCE installed two 10 MW battery systems with a combined output of 80 MWh at its Mira Loma substation about 60 miles east of Los Angeles. The batteries usually charge at night when the wind is blowing and energy prices are low and discharge during the day when they are bid into the frequency regulation market or the peak energy market. Once again, though, SCE is not dispatching the batteries; that is CAISO’s job.

“Our job is to report the true availability and marginal costs of the units,” Kaushik said. But storage is a unique asset. It is both supply and load, but as a supply asset it is limited because it cannot generate indefinitely. Charging batteries means buying energy. The trick is to bid the assets into the market so that the value of discharge is greater than the value of charging. So far, the Mira Loma units have performed well, Kaushik reported. They have been dispatched every day since the end December, and they are “in the money.”

Looking at more storage

SCE is looking at deploying more storage projects, but Kaushik is less bullish on the prospects of a stand-alone battery installation than he is on hybrid applications. A stand-alone battery does not have a lot of “positive value,” he said, at least not absent other considerations. For instance, one of the keys to making an installation like Mira Loma work, he said, is finding locations where congestion pricing is high.

And as battery prices continue to decline in the coming years, Kaushik said more storage projects “might pencil out.” Overall, he said, “energy storage is a very important part of our renewable mix as we move toward the 50% RPS target.” By providing more accurate frequency response, storage could be used to integrate more wind and solar on our system.

One of the ways SCE is looking at using storage to help integrate renewables into its grid does not have to do with stationary storage projects. The utility is looking at ways to use the electrification of transportation to help manage a system that will have more renewable resources.

If charging stations are deployed so that vehicles charge during the day, it could absorb excess solar generation, generation that otherwise would have to be dumped. “We can’t curtail other resources as easily as solar,” said SCE spokeswoman Jude Schneider. So when more solar power is produced during the day than can be used, it is dumped into the market, creating negative prices.

CAISO integrates renewables

Dumped power shows up on the system as negative prices on CAISO’s system. CAISO is the party actually responsible for integrating renewables and storage into California’s grid. The power mix of CAISO’s system is now about 29% renewable resources of which about 48% is solar power.

CAISO began working on integrating storage into its grid about seven years ago, said Peter Klauer, senior advisor for smart grid technology at CAISO. One of the immediate benefits of storage is its ability to absorb energy, to flatten the “belly of the duck,” as Klauer said

The “duck” is a reference to the duck curve, a graphical representation of what happens when solar power peaks during the day and falls off sharply in the evening, necessitating a sudden need for other forms of fast ramping generation such as gas-fired peakers.

Storage can flatten the duck’s belly and shorten its neck, but the ISO’s main job is not to add storage or even renewables to the system. “We want the curve to be as smooth as possible,” Klauer said. “Our goal is to derive the highest value from our assets at the lowest cost.”

Storage provides frequency regulation

One of the chief ways energy storage can do that is by providing frequency regulation. Storage, particularly batteries, is very good at providing the immediate response needed for frequency regulation, but mostly for short durations.

That has created problems in markets such as the PJM Interconnection when a battery goes from discharge to charge and suddenly is pulling energy from a system that needs energy injections to balance the system.

One of the changes CAISO instituted to deal with the unique characteristics of batteries is to introduce a state of charge parameter for storage that is bid into its system “The bidder provides that value in their telemetry,” Klauer said.

Those changes have helped spur the growth of storage resources. This time last year there were about 15 MW of storage on CAISO’s system. Now there are about 100 MW, Klauer said.

The amount of storage in CAISO is likely to grow. There are now about 5,000 MW of energy storage projects in CAISO’s interconnection queue, and a lot of those projects are hybrid storage-generation projects, Klauer said. Not all of those projects will come to fruition, but that still represents a large amount of storage even though, as Klauer noted, it is a just a drop in the bucket in a 70,000 MW system.

The ISO is also looking at other options for smoothing the curve even as the contribution of renewable resources continues to grow. CAISO is studying time-of-use pricing, and Klauer said an expansion of the Energy Imbalance Market would be beneficial because it would enable California to export excess renewable generation to neighboring systems. And batteries, of course, will be part of the solution, Klauer said.