New Analysis Finds Substantial Value of Adding Up to 4-Hour Duration Batteries to Solar Or Wind Power Plants Located In Regions Facing Transmission Congestion

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We’re happy to announce a new study that examines the worth of including batteries to wind and photo voltaic vegetation situated in areas that face transmission congestion.

We study two sorts of areas dealing with transmission congestion. These areas characterize parts of Regional Transmission Organizations (RTOs) or Unbiased System Operators (ISO) territory chosen based mostly on specific pricing patterns: The primary kind, known as a Variable Renewable Vitality (VRE)-rich space, has excessive native deployment of renewable vitality relative to native vitality demand. The grid in this sort of space turns into congested throughout hours when the native renewable technology is excessive relative to the obtainable transmission capability to neighboring areas. In these hours, native wholesale vitality costs will decline in comparison with neighboring areas. The second kind, Load Facilities are areas with excessive demand for electrical energy relative to native technology sources, similar to cities and suburban areas. Load Facilities are inclined to see native costs spike when demand peaks relative to the obtainable transmission capability into the areas. Wind and photo voltaic vegetation are situated in each sorts of congested areas, although there are extra vegetation situated in VRE-rich areas.

This examine explores the worth of including batteries in each sorts of areas, how optimum configurations of hybrid VRE+battery vegetation would possibly differ between areas sorts and between photo voltaic and wind, and the way the vegetation can contribute to each vitality and capability markets. The findings from this work will help to refine long run planning processes and supply perception into future circumstances as renewable vitality and battery deployment expands over time.

Determine 1. Annual hybrid plant vitality revenues by battery period and plant and placement kind throughout all markets. Standalone wind and photo voltaic vegetation are represented by zero period for comparability. Outliers, represented by diamonds, are knowledge factors that fall outdoors the vary of 1.5 occasions the inter-quartile vary. Be aware, we excluded wind vegetation in ERCOT on this determine, as a result of outlier values that made the remainder of the determine arduous to learn. The determine together with all vegetation studied is on the market within the full textual content.

Key findings from the examine embody:

• Including As much as 4 Hours of Storage Considerably Boosted Vitality Worth for Photo voltaic and Wind Vegetation: One metric examined was vitality worth, or the worth vegetation may obtain for promoting their vitality into the wholesale electrical energy spot market. In VRE-rich areas, wind and photo voltaic vegetation noticed comparable relative will increase to worth from including storage. For instance, in VRE-rich areas, including one hour of storage boosted vitality worth for each wind and photo voltaic vegetation by ~80%, and increasing storage from 1 to 4 hours period boosted vitality income by an extra ~30%. One caveat is that storage worth was based mostly on the idea that battery dispatch was optimized with excellent foresight into market costs, which represents an higher sure for the worth enhance – previous analysis means that storage worth estimates with out excellent foresight could also be 70% to 90% that of the worth beneath excellent foresight, various by the placement and 12 months.
• The Vitality Worth of Storage Plateaus After 4 Hours of Length in Present Markets: Vitality worth will increase notably when including batteries with durations as much as 4 hours. Nonetheless, little further vitality worth was discovered past 4 hours of battery period in most places and throughout each sorts of areas (Determine 1). Notably–and considerably surprisingly–even in VRE-rich areas, batteries past 4 hours see comparatively little achieve in vitality worth.
• Wind Requires Longer-Length Storage to Earn Capability Credit score than does Photo voltaic: Capability credit score, measured right here merely as the flexibility to produce vitality to the grid in the course of the 100 highest net-load hours per 12 months, reaches 90% with 4 hours of battery period for photo voltaic vegetation, however requires 8 hours of battery period for wind vegetation. This was true in each sorts of areas (Determine 2).
• Battery Degradation Assumptions Impression Outcomes: An vital technical element was that the worth added of battery storage was delicate to the imposition of dispatch limits designed to reduce battery degradation over time. When a $25/MWh threshold for temporal arbitrage was imposed, income estimates had been diminished by roughly 15% to twenty%, with bigger income declines for some vegetation in VRE-rich areas. This is a crucial discovering as a result of it reveals that there are vital trade-offs between optimizing for battery longevity and quick time period income optimization. These trade-offs are sometimes handled in a simplistic method, similar to with guarantee necessities that restrict battery utilization to 1 cycle per day. Extra refined therapy of battery degradation could enable for higher worth maximization for hybrid energy plant house owners.

Determine 2. The capability issue of hybrid wind and photo voltaic vegetation with batteries in the course of the 100 most important hours per 12 months (as measured by the net-load, that’s, the full electrical energy demand much less wind and photo voltaic technology). The darker bars characterize the capability issue attainable when vegetation are optimally dispatched to satisfy the highest 100 hour hours.

Limitations embody:

• This evaluation centered on vitality and capability markets, however didn’t assess worth from ancillary providers. Many hybrid vegetation, particularly in ERCOT, derive excessive worth from ancillary providers. Nonetheless, we selected to disregard ancillary service worth streams as a result of the depth of the marketplace for these providers is low; as hybrid and storage sources are deployed in higher numbers, it’s probably they are going to turn out to be rather more depending on vitality and capability income, as has already began to happen in CAISO.
• The vitality worth evaluation was based mostly on actual time wholesale costs from 2018 – 2021, which won’t mirror dynamics which have occurred over the newest years. Pure gasoline costs, and due to this fact total electrical energy costs, had been notably excessive in 2021 and 2022, and solely excessive costs from 2021 are captured on this evaluation.
• We modeled the dispatch of hybrid renewable and battery vegetation assuming excellent foresight of actual time costs, whereas precise hybrid vegetation should plan battery charging and discharging based mostly on imperfect forecasts. With imperfect foresight, the worth of battery storage can be decrease than described right here. Due to this fact, this paper represents a theoretical most worth of including storage. Different analysis efforts have centered, and can proceed to focus, on the distinction between completely deliberate dispatch and precise dispatch.

To study extra particulars, see the total examine as revealed within the journal Renewable Vitality.

If in case you have any questions, contact Dev Millstein at Lawrence Berkeley Nationwide Laboratory. We respect the funding help of the U.S. Division of Vitality’s Workplace of Vitality Effectivity and Renewable Vitality.

Courtesy of electronic mail from Dev Millstein, Lawrence Berkeley National Laboratory