Ben Kaun Sr Project Manager Energy Storage Program 7/28/15 Energy Storage Benefit-Cost Analysis Publicly Available Software Development Ben Kaun Sr Project Manager Energy Storage Program 7/28/15

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Today’s Agenda Explain the vision Introduce the new software project How you can help Q&A

The Vision

The Issue: Where and When Does Energy Storage Make Sense? Behind the Meter Frequency Response Renewables Integration Transactive Energy Regulation Energy Management Solar Backup EV Charging Peaker Replacement T&D Deferrals Demand Charge Management Microgrids Real time Energy FRACMOO2(…?) Generation-sited FlexiRamp It Depends Who You Ask…

Vision for Desired Outcomes Publicly available tools and methods to fairly, transparently, and consistently estimate the benefits and costs of energy storage projects across all cases Grid Services Technologies and Sizes Locations Ability to identify and characterize high value locations to deploy energy storage, so that early successes in energy storage maximize value to all stakeholders

Discussion needs to evolve to be about real situations The Upshot… Discussion needs to evolve to be about real situations Not about the “modeling process” Bounding ranges of costs and benefits is more important than the “exact answer”, which doesn’t exist…

The Project

An Opportunity: Publicly Available Energy Storage Valuation Software funded by California Energy Commission What is it? Cloud-Hosted Energy Storage Valuation Software Customized for California Needs Available in 2016 Goals A software platform for transparent, validated estimation of energy storage project benefits and cost Include all CPUC use cases and storage technologies under consideration Achieve broad stakeholder buy-in on approach and support highest value uses

Project Description (Continued) Resources $1.9M Budget = $1M CEC + $0.9M Cost Share from EPRI + Partners Leverage the technical community of the Energy Storage Integration Council (ESIC) Project Team EPRI Energy and Environmental Economics (E3) Lumina Decision Systems Customized Energy Solutions Udi Helman (consultant) Strategen Consulting (organizer of CESA) Build off Prior Efforts with Energy Storage Valuation Tool (ESVT)

Forum for Input: Energy Storage Integration Council (ESIC) Mission Statement: To advance the integration of energy storage systems through open, technical collaboration: guided by the vision of universally accessible safe, secure, reliable, affordable, environmentally-responsible electricity

ESIC Working Groups: Analysis Working Group will be the Venue for Technical Input / Review of the Model ESIC WG1 Applications WG2 Performance (Testing) WG3 System Development (Products) WG4 Grid Integration WG5 Analysis

Over 150 participating organizations, including: Participation in ESIC Over 150 participating organizations, including: Electric Utilities ISOs Energy Storage Vendors System Integrators / Project Developers Researchers and Universities Regulators Contact E-mail: esic@epri.com Send full contact info (name,title, e-mail, phone, company address) No cost to participate

ESVT will serve as technology and knowledge starting point Model Background Work: Energy Storage Valuation Tool (ESVT) – What it is Focus on energy storage project benefit-cost techno- economic analysis Highly customizable input fields Price taker type model Diverse energy storage technologies Grid services covering generation, transmission, distribution, and behind-the-meter value propositions Evaluation of individual and “stacked benefits” ESVT will serve as technology and knowledge starting point for this project

Quick Recap: Energy Storage Valuation Tool (ESVT) INPUTS MODEL OUTPUTS Cost / Benefit Define Grid Services Simulate Storage Operation Detailed Financials Define Financial Perspective Storage Operation Define Storage Capability

A prior version ESVT was used in the 2013 Energy Storage Proceeding R Report Describes the Model in Detail and Provides Assumptions and Results of Over 30 Model Runs Available for Download: http://www.epri.com/abstracts/Pages/ProductAbstract.aspx?ProductId=000000003002001162

How You Can Help

Functional Use Cases: Who Will Use This Tool and How Will they Use It We Need Input and Review on Multiple Topics to Define Software Functional Requirements and Interface Specs Functional Use Cases: Who Will Use This Tool and How Will they Use It Energy Storage Use Cases: What Are All the Circumstances Where Storage May be Deployed Locations Grid Services Technologies

First Step: Define the Highest Priority Functions for each Stakeholder – What are you trying to answer for what purpose? Functional Use Cases: Who Will Use This Tool and How Will they Use It As a Stand-alone Analysis Tool… Data Sets New Storage Valuation Tool Outputs Inputs ...or as a Stage in Another Analysis Methodology Data Sets Another Tool New Storage Valuation Tool Outputs Inputs

Functional Use Cases Starting Point for Consideration Source: Initial EPRI Brainstorming and Socialization Stakeholder Group Possible applications of the tool for storage cost-benefit analysis Utilities Resource planning / Transmission planning functions Distribution planning functions Storage procurement – offer ranking Customer facing program execution (e.g. SGIP, DR, etc) Real-time uses to forecast storage operations in the wholesale market Regulators Analysis of storage in oversight of utility procurement planning Evaluation and benchmarking of utility storage procurement decisions Assessment of storage as Resource Adequacy capacity resources Assessment of integrated renewable and storage projects (RPS procurement) Regional System Operators Evaluation of storage benefits in transmission planning Assessment of how storage operations could affect wholesale market design Calculation of benchmark storage market value, for various uses, e.g., in annual “State of the Market” reports Project Developers Valuation and pricing of projects for utilities and regulators; determination of optimal size and technology for projects Locational value of energy storage projects, or aggregate distributed resources Optimization of new product capabilities to maximize value Electricity Customers Understanding of cost-effectiveness potential of storage at different customers Determination of appropriate storage/DER products under particular rate structures Effect of storage on value/utilization of other DER Researchers Common platform for storage model extensions; repository of models and datasets

Functional Use Cases: Who Will Use This Tool and How Will they Use It Next Step: Energy Storage Use Cases are Considered within Context of Functional Use Cases Functional Use Cases: Who Will Use This Tool and How Will they Use It Energy Storage Use Cases: What Are All the Circumstances Where Storage May be Deployed

Energy Storage Use Cases Starting Point From CPUC Decision D. 13-10-040

Energy Storage Use Cases are Converted to Feasible Combinations of Grid Services, Locations, Technologies Functional Use Cases: Who Will Use This Tool and How Will they Use It Energy Storage Use Cases: What Are All the Circumstances Where Storage May be Deployed Locations: Requirements and Adjustment Factors Grid Services: What Storage Does to Produce Value Technologies: Generic Models that can be Customized for Specific Projects

Grid Services Starting Point: CPUC CEP “Applicable End Uses”

Grid Services Starting Point: CPUC CEP “Applicable End Uses” Services currently modeled in ESVT Strong consistency with ESVT to start from… Detailed socialization required and some new development

Locations Starting Point Initial Siting Locations to Consider Fossil Generation Renewable Generation Transmission Substation Distribution Substation Along Feeder Service Transformer Behind the Meter (industrial) Behind the Meter (commercial) Behind the Meter (residential) Locations are important for.. Solving problems Not creating problems Loss factors Voltage impacts Etc.

Requires close look from storage technology community Technology Starting Point: Generic Technology Classes Currently Represented in ESVT Model Batteries / Flywheel CAES Pumped hydro Gas Turbine Requires close look from storage technology community to ensure accurate representation

Summary of Input Needs from the Stakeholders Functional Use Cases What Questions Do you Need to Answer? How would you like to use it?  DEVELOP USE CASES Energy Storage Use Cases Ensure all the likely storage deployment scenarios are compatible with the tool Grid Services Ensure services are modeled in a credible way -> Requirements + Benefit/Cost calculation approach Technologies Ensure all applicable storage technologies are considered with socialized inputs from the developer community – Not the performance per se, only the critical parameters to define Locations Consider the locational requirements and adjustment factors that are important for the model We envision a working subgroup to advance each of these topics

Planned Project Schedule Stakeholder Interviews & Software Use Case Development Model Architecture Development Functional & Interface Requirements Model Development Alpha Model Review (Testing Features) Beta Model Review (Debugging & Feature Freeze) Software Delivery & Tech Transfer 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4

Planned Project Schedule Stakeholder Interviews & Software Use Case Development Tell Us if We Need to Adapt Schedule to Maximize Value Model Architecture Development Functional & Interface Requirements Model Development Alpha Model Review (Testing Features) Beta Model Review (Debugging & Feature Freeze) Software Delivery & Tech Transfer 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4

Planned Project Schedule Stakeholder Interviews & Software Use Case Development NEXT STEP: DEVELOP A DETAILED MODELING AGENDA FROM YOUR INPUTS Model Architecture Development Functional & Interface Requirements Model Development Alpha Model Review (Testing Features) Beta Model Review (Debugging & Feature Freeze) Software Delivery & Tech Transfer 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4

Opportunities to Engage Participate in the Energy Storage Integration Council – Analysis Working Group – No Cost Working group meetings monthly and topic subgroups meet more regularly Next webcast: August 14, 10am Pacific time For meeting invites, send full contact info to: esic@epri.com Use Case Workshop September 1st all-day @ EPRI in Palo Alto (by invitation) E-mail esic@epri.com and bkaun@epri.com for invite request and justification (Need a small, balanced group of ~30 people to be successful) Separate Interviews with Key Stakeholders: E-mail Ben Kaun at bkaun@epri.com

Questions and Comments? Contact Information: Ben Kaun E-mail: bkaun@epri.com Office Phone: 650-855-2208

Together…Shaping the Future of Electricity