Nine-hour energy storage requirement makes one natural gas replacement project in #California tricky RSS Feed

Nine-hour energy storage requirement makes one natural gas replacement project in California tricky

Natural gas storage facility at Aliso Canyon, California, that suffered a huge leak in 2015, leading to several utility-scale energy storage projects being developed to meet capacity requirements. Image: Flickr earthworks 2.

The requirement of nine hours of energy storage duration at a project touted as a possible replacement for a new natural gas plant in California makes it tough for the newer technology to compete on cost, an analyst has said.

Back in June, the California Independent System Operator (CAISO), which is responsible for much of the state’s high voltage transmission lines, ensuring security of electricity supply and keeping costs to ratepayers as low as possible, agreed to investigate alternatives to building a 262MW gas power station.

CAISO’s study on the Puente Natural Gas project came about after the regulator, California Public Utilities’ Commission (CPUC) approved it as a solution to fears of capacity shortfall that will result from the planned retirement of some 2,000MW of local generation assets by 2020 under environmental rules. After utility Southern California Edison (SCE) and developer NRG Oxnard Energy Center were given approval for the plant, California Energy Commission agreed to an offer made by CAISO to consider alternatives.

Nine-hour requirement adds big cost

The CAISO study was published earlier this month. While finding it feasible for energy storage – as well as a combination of energy storage and synergistic technologies such as demand-side response – to be available to deliver the required capacity, there were some drawbacks.

Energy storage was found to be a more expensive alternative to building a new natural gas plant to meet local capacity requirements by about US$500 million under two of the main scenarios modelled and investigated by CAISO. Capital costs for the development of “Incremental distributed resources plus grid connected battery storage” were estimated at US$805 million. A new 262MW natural gas plant was estimated at US$299 million capital cost.

“In scenario 1 you have two, 9-hour systems. That’s what’s really driving the cost here,” Daniel Finn-Foley, energy storage analyst at GTM Research, said.

“For utility-scale energy storage, the sweet spot that we’re seeing right now is around the 4-hour system. As you keep adding duration to these systems, you’re increasing the cost but you’re not actually increasing the power it can output. So an energy storage system that can provide 60MW for four hours is still providing 60MW even if the duration is increased to nine hours, but it now costs a lot more. That’s one of the things driving this pretty steep cost increase here.”

Finn-Foley said that the long duration requirement appeared to be attributable to site-specifics such as load profile, with the study basing its assumptions on the hourly load. In other words, with the energy storage facility mooted as a total replacement solution for gas, rather than as a supplement to an existing gas facility, the requirement at the site, located in the Moorpark Sub-Area of CAISO’s service area, changes significantly.

This contrasts with a recent precedent set in California in natural gas versus energy storage planning decisions. Following the Aliso Canyon gas leak of late 2015, several large-scale energy storage units were approved and brought online totalling more than 100MWh in less than six months. Those units too, from companies including Greensmith, Tesla and AES Energy Storage, were deployed to meet capacity shortfall concerns, but had very different criteria and requirements to be met.

Read full article at Energy Storage News