Storage Workshop Pack by n3NYd0M

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									CPUC Staff Workshop on Energy Storage Phase 2 R.10-12-007   August 20, 2012




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CPUC Staff Workshop on Energy Storage Phase 2 R.10-12-007     August 20, 2012



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CPUC Staff Workshop on Energy Storage Phase 2 R.10-12-007                             August 20, 2012

                                             Introduction
In response to ALJ Yip-Kikugawa’s Ruling of August 3, 2012, Energy Division Staff are moving ahead with
Phase 2 of the Storage Rulemaking R.10-12-007. The Energy Division has scheduled a workshop on
August 20 to foster discussion of Phase 2 issues and to consider a proposed schedule for Phase 2
activities which could be presented to the ALJ during the Pre-Hearing Conference on September 4, 2012.

During the workshop, Staff will propose a workplan of analysis that follows the framework set out in the
Staff Final Proposal, which identified several priority scenarios focusing on particular end uses of energy
storage systems (ESS). As was noted in D.12-08-016 closing Phase 1 of the Storage proceeding:

        “We believe that focusing on the end uses, and applying them to specific scenarios will reduce
        the risk that this potential resource will be undervalued. More importantly, this approach will
        allow us to identify those relevant situations where storage could be utilized and whether it
        would be appropriate to set targets to encourage the cost-effective deployment of energy
        storage systems. Identification of relevant situations will facilitate the inclusion of energy
        storage as needs are identified in other proceedings, such as RA, RPS and LTPP.”

Separate consideration of each scenario allows us to disaggregate the complexity of issues related to
ESS and facilitates a more focused analysis in the context of each scenario.

The analysis initiated at the Aug. 20 workshop will be further developed in subsequent workshops and
parties comments – and possibly evidentiary hearings – during Phase 2, which is expected to last
approximately nine months.

Priority Scenarios
In the Staff Final Proposal adopted by D12-08-016, four priority scenarios were identified that align with
existing state and Commission policy objectives:
     1. Renewable Support/Dispatchability
     2. Ancillary Services
     3. Distributed Storage
     4. Demand-Side Management

Use Cases
Following up on the Staff Final Proposal, Staff have been working, in consultation with various
stakeholders, to flesh out the scenarios and connect them to real-world applications that would serve as
the basis for detailed “Use Cases”.

Use Cases are documents that illustrate the context for specific applications of storage technologies.
This allows us to easily picture where and how storage can be used in the utility system, thus promoting
clearer decision-making. The purpose of describing Use Cases is not to fully specify the exact nature of
each and every energy storage project and their relevant technologies (i.e., specifications of a particular
device, how a particular project is designed, or how it is to be developed, financed and built). Instead,
Use Cases define goals and purpose: the problems we are trying to solve. Establishing these goals lays
the foundation for the scope of analysis that will follow.


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CPUC Staff Workshop on Energy Storage Phase 2 R.10-12-007                            August 20, 2012

In Phase 2, Staff propose to collaborate with stakeholders to conduct focused analysis in the context of a
particular Use Case that includes:

    1. Discussion of novel characteristics and associated value streams relevant to a specific Use Case,
    2. Consideration of potential cost-effectiveness methodology that properly addresses those
       characteristics and multiple value streams,
    3. Identification of specific barriers to deployment of storage in that Use Case, and
    4. Evaluation of specific policy options to address the identified barriers, including but not limited
       to, development of procurement targets, if appropriate.

To the extent possible, the Use Cases should be informed by actual operational experience gained from
currently active energy storage projects and those in development.

The following illustrates an expansion of the four scenarios into more detailed use cases that would be
subjected further comment and analysis by Parties (note: some scenarios names below have been
changed from the Staff’s Final Proposal).

        Scenario/Use Case                                Primary End Use
    •   Generator-sited Storage                          Renewables integration
           • Co-located with VER
           • Co-located with Conventional Gen
           • Co-located with Wholesale DG

    •   Bulk Generation
            • Storage as “Peaker”                        Ancillary Services/Capacity/Energy
            • Ancillary Services                         Ancillary Services

    •   Distributed Storage
            • Distributed Peaker                         Energy cycling to meet peak
            • Distribution Storage                       Defer upgrades
            • Community Energy Storage                   Local service reliability

    •   Demand-Side Management                           End-use bill management
           • Permanent load shift
           • On-site renewables with storage

Questions to Address in the Use Case Analysis

For each use case selected for analysis, Staff proposes to address detailed questions, such as:
Is energy storage commercially ready to meet this use?
     1. Is energy storage operationally viable for this use?
     2. What are the potential benefits of energy storage? Can these benefits be monetized via existing
        market structures? If not, how should they be valued?
     3. Is energy storage cost-effective for this use?
     4. What barriers are preventing or slowing deployment of energy storage in this use?
     5. What are the policy options to address the identified barriers encountered by energy storage?
     6. Should procurement target or other policies to encourage energy storage deployment be
        considered for this use?


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CPUC Staff Workshop on Energy Storage Phase 2 R.10-12-007                              August 20, 2012



Workshop Documents: Use Case Matrix, Templates and Timeline

Attached to this memo are several documents, as follows (all subject to further discussion and
refinement in the workshops and via comments):

       Appendix A, a “Matrix” which outlines the key parameters of these proposed Scenarios/Use
        Cases.

       Appendix B is a draft generic template proposed by Staff to describe the details of a particular
        Use Case.

       Appendicies C1 and C2 illustrate the use of the above template to describe two of the Use Cases
        as examples (and are still incomplete).

       Appendix D is a list of “real world projects” which could be used as reference to develop the
        detailed descriptions of proposed Use Cases.

       Appendix E provides a proposed timeline for Phase 2 activities.

       Also, a document that explains Use cases and their value in this proceeding.



Scope of Phase 2
Procurement Targets

Phase 2 activities will lead to a determination by the Commission for policies to advance energy storage
procurement by regulated utilities and load-serving entities, as per AB 2514.

Cost/Benefit Analysis

To inform the discussions regarding cost-effectiveness of ESS for specific use cases, the workshops will
also explore different approaches to cost/benefit analysis for storage systems, examine potential
benefits associated with storage and how to assign economic value to them, and leverage various
modeling efforts by the industry to quantify benefits and costs over the life of a storage project.

This effort will provide the tools of analysis that might apply to determining cost-effectiveness when
utilities or other parties propose storage projects for specific applications.

Barriers

In Phase 2, Staff expects to conduct additional workshops to seek input from the Parties on
identification of other relevant benefits and potential revenue streams, applicable barriers to
implementation (also addressed in the Staff Final Proposal), and how to resolve these barriers.



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CPUC Staff Workshop on Energy Storage Phase 2 R.10-12-007                              August 20, 2012


Other Potential Phase 2 Issues

       Coordination with other proceedings, in particular, how this proceeding should coordinate with
        the Long Term Procurement Policy (LTPP) and the Resource Adequacy proceedings.

       Developing a Resource Adequacy value for energy storage.

       Market needs analysis – whether it should be separately conducted in Phase 2, or adopted from
        findings in LTPP and RA.

       Impacts of ownership models (utility, 3rd-party, customer).

       Defining the longer-term Roadmap for addressing storage in future proceedings, as called for in
        AB 2514.



Other Questions for Workshop Participants:

Are there alternate Use Cases not listed in the Appendix A Matrix that deserve specific analysis?

Will evidentiary hearings be necessary to address any Phase 2 issues?

Some parties have suggested that there are a number of operational characteristics of storage that
traditionally have not been monetized ( i.e., flexible capacity, ramp speed, time of availability, locational
benefits, reduced siting risk, ability to construct in phases, T&D line loss reductions). How can these
characteristics be valued and incorporated into a cost/benefit methodology?



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CPUC Staff Workshop on Energy Storage Phase 2 R.10-12-007                                           August 20, 2012

Why Use Cases? 1

Use Cases were initially developed in the Computer Software and Information Technology fields to help
identify, clarify and organize high-level system requirements. Use Cases are generally vision documents
that help clarify a goal or vision of a project or a solution. Increasingly, the Use Case model is being
employed in many different fields, because it enables business analysts and product development teams
to collaborate and determine the requirements of a project.


Energy Division Staff has proposed adopting the Use Case approach to help clarify Priority Scenarios for
energy storage adoption. Use Cases provide a simple method and consistent format to decide and
describe the purpose of a project – in this case, the application associated with energy storage.

Use Cases are documents that illustrate the context that allows us to easily picture where and how
storage can be used in the utility system, thus promoting clearer decision-making.

At a minimum, Use Cases need to consider two concepts, and how they relate:
     the actors
     the goals
Actors are everyone and everything that will use energy storage for this particular application. Goals are
what one, some, or all of the actors want to achieve. To be complete, every Use Case must describe a
specific goal and the actors that will perform tasks to achieve that goal.

Additionally, Use Cases for storage match the major operating characteristics of a storage technology to
meet the needs of specific identified applications, assess the relevant values and benefit streams of that
application against its expected costs, and identify barriers that might hinder this use, while providing a
strategy for how to overcome those barriers.

The purpose of describing Use Cases is not to fully specify the exact nature of each and every energy
storage project and their relevant technologies (i.e., specifications of a particular device, how a
particular project is designed, or how it is to be developed, financed and built).

Instead, Use Cases define goals and purpose: the problems we are trying to solve. Establishing these
goals lays the foundation for the scope of analysis that will follow.

A well-constructed Use Case can be understood by all the stakeholders. It can also help in achieving a
balanced approach, where policies are considered for the entire ecosystem, rather than one particular
actor.

Use-case driven development is a mindset, as much as it is a technique. A solid early foundation of
understanding among all concerned parties allows more rapid decision-making, and encourages a
continual focus on the storage project’s value.

In sum, Use Cases are illustrative documents that help with the understanding of how all pieces fit
together.

1
    This brief was adapted from: What’s the Problem? Norm Carr & Tim Meehan, January 2005, on A List Apart website.


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CPUC Staff Workshop on Energy Storage Phase 2 R.10-12-007   August 20, 2012




                           Appendix B




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CPUC Staff Workshop on Energy Storage Phase 2 R.10-12-007   August 20, 2012




            CPUC Energy Storage Use Case Analysis


                             [Application]
                               [Use Case]

                                 Version 0.1




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CPUC Staff Workshop on Energy Storage Phase 2 R.10-12-007    August 20, 2012


Contents
1. Overview Section                                                      11
2. Use Case Description                                                  11
   2.1 Objectives                                                        11
   2.2 Actors                                                            11
   2.3 Proceedings and Rules that Govern Procurement Policies and
       Markets for This Use                                              11
   2.4 Location                                                          12
   2.5 Operational Requirements                                          12
   2.6 Applicable Storage Technologies                                   12
   2.7 Non-Storage Alternatives for Addressing this Objective            12
3. Cost/Benefit Analysis                                                 13
   3.1 Direct Benefits                                                   13
   3.2 Other Beneficial Attributes                                       14
   3.3 Costs                                                             15
   3.4 Cost-effectiveness Considerations                                 15

4. Barriers Analysis & Policy Options                                    16
   4.1 Barrier Resolution                                                16
   4.2 Other Considerations                                              16

5. Real World Example                                                    17
   5.1 Project Description                                               17
   5.2 Outstanding Issues                                                17
   5.3 Contact/Reference Materials                                       17

6. Conclusion and Recommendations                                        18




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CPUC Staff Workshop on Energy Storage Phase 2 R.10-12-007   August 20, 2012

1. Overview Section


2. Use Case Description

2.1 Objectives


2.2 Actors


Name          Role description




2.3    Proceedings and Rules that Govern Procurement Policies and Markets
       for This Use


Agency     Description                     Applies to




Probably some text here…..



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CPUC Staff Workshop on Energy Storage Phase 2 R.10-12-007      August 20, 2012



2.4 Location

2.5 Operational Requirements




2.6 Applicable Storage Technologies


Storage Type          Storage capacity         Discharge Characteristics




2.7 Non-Storage Alternatives for Addressing this Objective


Narrative




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  CPUC Staff Workshop on Energy Storage Phase 2 R.10-12-007           August 20, 2012



3. Cost/Benefit Analysis
  3.1 Direct Benefits




                                         Primary/
      End Use                           Secondary Benefits/Comments

      1.     Frequency regulation          P

      2.     Spin                          P

      3.     Ramp                          P

      4.     Black start

      5.   Real-time energy
      balancing                            P

      6.     Energy arbitrage              P

      7.     Resource Adequacy             P

      8.     VER2 /

      wind ramp/volt support,

      9.    VER/ PV shifting, Voltage
      sag, rapid demand support

      10. Supply firming

      11. Peak shaving: load shift

      12. Transmission peak
      capacity support (deferral)

      13. Transmission operation
      (short duration performance,
      inertia, system reliability)



  2
      VER = Variable Energy Resource



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CPUC Staff Workshop on Energy Storage Phase 2 R.10-12-007   August 20, 2012

14. Transmission congestion
relief

15. Distribution peak
capacity support (deferral)

16. Distribution operation
(volt/VAR support)

17. Outage mitigation:
microgrid

18. TOU energy mgt

19. Power quality

20. Back-up power




3.2 Other Beneficial Attributes


Benefit Stream                Y/N   Assumptions




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CPUC Staff Workshop on Energy Storage Phase 2 R.10-12-007   August 20, 2012

3.3 Costs

Cost Type              Description

Installation

O&M




3.4 Cost-effectiveness Considerations

Narrative




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  CPUC Staff Workshop on Energy Storage Phase 2 R.10-12-007             August 20, 2012



4. Barriers Analysis & Policy Options
  4.1 Barrier Resolution


  Barriers Identified                 Y/N   Policy Options / Comments

  System Need

  Cohesive Regulatory Framework

  Evolving Markets

  Resource Adequacy Value

  Cost Effectiveness Analysis

  Cost Recovery Policies

  Cost Transparency & Price Signals

  Commercial Operating Experience

  Interconnection Processes




  Other issues



                                            Other comments




  4.2 Other Considerations


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  CPUC Staff Workshop on Energy Storage Phase 2 R.10-12-007   August 20, 2012



5. Real World Example
  5.1 Project Description




  Location

  Operational Status

  Ownership

  Primary Benefit Streams

  Secondary Benefits

  Available Cost Information


  5.2 Outstanding Issues


  Description                             Source




  5.3 Contact/Reference Materials




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  CPUC Staff Workshop on Energy Storage Phase 2 R.10-12-007                   August 20, 2012



6. Conclusion and Recommendations




  Is ES commercially ready to meet this use?



  Is ES operationally viable for this use?



  What are the non-conventional benefits of storage in this use?

  Can these benefits be monetized through existing mechanisms?

  If not, how should they be valued?



  Is ES cost-effective for this use?



  What are the most important barriers preventing or slowing deployment of ES in this use?



  What policy options should be pursued to address the identified barriers?



  Should procurement target or other policies to encourage ES deployment be considered for this
  use?




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CPUC Staff Workshop on Energy Storage Phase 2 R.10-12-007                         August 20, 2012

Appendix D: Examples of Real-World Storage Projects Suggested to Inform Use Cases

   1. Distributed Storage

      SDG&E Primary Distribution – Borrego Springs substation-level, 500 kW/1500 kWh

      TAS Energy/Raleigh, NC – District cooling system using chilled water TES

   2. Community Energy Storage

      AEP Ohio GridSmart – 2 MW (80 units x 25 kW) for 2 MWh, li-Ion (installed this summer)

      SMUD Solar Smart – Anatolia neighborhood, 15 x 8.7 kW/8.8 kWh + 3 x 30 kW/30 kWh, support
      local PV and explore other benefits.

      SDG&E Secondary storage – 25 kW/50 MWh, relieve distribution circuit loading, ancillary
      services.

      Detroit Edison/KEMA – (still in battery testing)

   3. Peaker Displacement

      Primus Power/Modesto Irrigation District – 25 MW/75 MWh, on-line Summer 2013?

   4. VRE Sited Integration

      AES Laurel Mountain – 32 MW battery to back up 98 MW wind farm; developer claims
      applications for regulation (PJM markets), ramping and VRE smoothing

      BrightSource/Edison PPAs – Solar Tower w/storage – 3 x 200 MW, 6 hour storage w/molten salt.

   5. Bulk Generation

      TAS Energy “storage generation” turbine inlet cooling with TES, various US installations

      Pumped Storage – various projects proposed

      CAES – Alabama legacy project, PG&E in process.

   6. Demand Side Management

      Xtreme Power – integrated storage with digital power management

      Santa Rita Jail – Microgrid application with 1 MW fuel cell, wind turbines and 2 MW battery
      storage

      Tesla/Solar City – Various li-Ion backup for rooftop PV systems

      Ice Energy/SCPPA – Thermal energy storage under utility ownership model.



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CPUC Staff Workshop on Energy Storage Phase 2 R.10-12-007                         August 20, 2012

Appendix E: DRAFT Timeline for Phase II R.1012007
August 20            Workshop, CPUC Auditorium

September 4          PHC Phase 2

September 7          Joint Storage/LTPP workshop on flexibility characteristics

September 24         Workshop on cost-effectiveness tools (KEMA and EPRI)

September ???        Phase 2 Scoping Memo

October 8-9          Staff Workshops on Use Case development




                                            PROPOSED



 October-November      Working Groups further develop Use cases

 December              Staff report on Use cases for adoption

 January 4             Parties comment on Staff Report 2, propose specific Storage Applications
                       that should be considered for utility portfolios. Identify how Barriers relate
                       or may be addressed in this or other Proceedings.

 February 5            Reply comments

 March-April 2013      Evidentiary Hearings or Workshops on Procurement Targets, Policy Options
                       and Roadmap Issues.

 May 1, 2013           Staff recommendations to ALJ.

 August, 2013          ALJ PD on Phase II issues; determination if Procurement will be ordered and
                       how it should be conducted or other alternative Policy approaches.

 September, 2013       Commission consideration of PD

 October 1, 2013       Statutory deadline

 December 31, 2013     Report to Legislature on Outcome of Proceeding



 Report to Legislature on outcome of Proceeding.
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