Energy storage - the Game ChangerIntelligent Grids - Pathway to our energy future?

ATSE NSW Symposium Session 2

Tony Vassallo

Faculty of Engineering & Information TechnologiesUniversity of Sydney

20 May, 2015

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Storage - the “Holy Grail”?

As the Electric Power Research Institute (EPRI) in the UnitedStates pointed out in 2003 - “In the broadest sense, storagedevices may be the most important element of the power systemsof the future”.

Why the recent rapid growth in storage interest?

The prospect of PV+storage at household level

Analysis of use and feasibility of PV+storage at householdlevel

Estimate of potential market size

Prospects of widespread disconnection

Source: EPRI-DOE Handbook of Energy Storage for Transmission and Distribution Applications, 2004

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Low cost batteries - a “disruptive” technology?

McKinsey - Disruptive technologies: Advances that will transformlife, business, and the global economy

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Some recent observations & analyses

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What is (was!) the “Game”?

Remote centralised fossil fuelled power stations (largely paidoff, ageing, inefficient)

Long distance high voltage T&D - one way power flow

Consumers - take it or leave it?

# 39

Electricity supply & market evolution

Markets

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Recent analyses

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Recent analyses

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PV uptake -“out of control”?

“It cannot be said that a non-incentivized PV revolution isunderway in a manner that policy makers can no longer control”.

“However, the fundamental conditions for such a revolution aremoving into place in different countries at an accelerated pace andpolicy makers have an opportunity to anticipate and react to thepotential for large-scale PV uptake in the near term”

Source:IEA-RETD Residential Prosumers - Drivers And Policy Options (June 2014)

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PV growth in Australia

2000 2003 2006 2008 2011 2014

0

1,000

2,000

3,000

4,000

Date

MW

Cumulative PV installed capacity

Source: APVI

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Why residential storage?

StorageValue

Central Storage Distributed Storage

Challenges:

Limited value to customer

Security & reliability risk

High capital investment

Long construction time

Highest value at

Edge of Grid

when aggregated

Adapted from Nourai, DNV-GL blog: Where is the energy storage market heading and where is the disruptive change? (Part 1)

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Why residential storage?

Cost of electricity at the home is highest in the network

Load profiles with peaks

peak shifting has value to both consumer and network operator

On site PV is popular but output not in phase with demand

Storage can triple/quadruple the value of PV to the homeowner in some instances

The technology is available, attractive and quickly deployable

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Why residential storage? PV

Ausgrid data for some Sydney homes, all with PV - daily average

0 5 10 15 20 25 30 35 40 45-0.1

0

0.1

0.2

0.3

0.4

0.5

0.6

Half-hourly data

En

erg

y,

kW

h

CL+GC

PV gross output, GG

Net (GC+CL-GG)

Average of 300 houses

GC = General Consumption (primary tariff, either inclining block or time of use rates)CL = Controlled Load Consumption (off peak 1 or 2 hot water)GG = Gross GenerationSource: www.ausgrid.com.au - Solar home electricity data - 1 July 2010 to 30 June 2011

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Why residential storage?

Source: Maree Zammit AusGrid presentation EECON 2014

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Effect of battery cost on residential feasibility - No PV

Arbitrage only - charge during off-peak, discharge during peak

400 500 600 700 800 900 1,000 1,100

0

2

4

6

8

10

battery cost $//kWh

battery

capacitykW

h

syd575syd536syd264pd802pd475pd078hb479hb442hb146

9 Sydney homes with very different consumption patterns

Effect of battery cost on optimized battery capacity for 9 Sydney homes usingToU tariff of $.53, $.21, $.13. No PV, simple payback, 10 y life, no cost offinance, 1 cycle/day

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Tesla Gigafactory for battery maufacture

0!

5!

10!

15!

20!

25!

30!

35!

40!

2010! 2011! 2012! 2013! 2014! 2015! 2016! 2017! 2018! 2019! 2020!

Gigafactory!

Others!

Lishen!

BYD!

BAK!

ATL!

Maxell!

Sony!

Panasonic!

LGC!

SDI!

Source: IIT Takeshita 2013

500,000

Vehicles

Global cell supply growing, but almost

entirely in Asia

Planned 2020 Gigafactory Production Exceeds 2013 Global Production

Battery pack cost/kWh reduced >30% by Gen III volume ramp in 2017

35,000

Vehicles

GW

h/Y

ear P

rod

uctio

n

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If decision is based on cost then...

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What are break-even PV+battery costs?

Example - Sydney home “1” (3.8 kW PV 8544 kWh):

Four scenarios:1 PV: $3000/kW, B: $1000/kWh

2 PV: $2700/kW, B: $1000/kWh

3 PV: $2300/kW, B: $700/kWh

4 PV: $1600/kW, B: $400/kWh

PV

ControlledLoad

Gross Load

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Scenario 1

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Scenario 2

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Scenario 3

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Scenario 4

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What are break-even PV+battery costs?

Example - Sydney home “189” (2.0 kW PV 7004 kWh):

Four scenarios:1 PV: $3000/kW, B: $1000/kWh

2 PV: $2700/kW, B: $1000/kWh

3 PV: $2300/kW, B: $700/kWh

4 PV: $1600/kW, B: $400/kWh

PV

ControlledLoad

Gross Load

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Scenario 1

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Residential battery storage potential - Australia

QLD NSW VIC SA WA TAS Total

State

0

1,000

2,000

3,000

4,000

MW

h b

att

ery

capacit

y

5% uptake

10% uptake

25% uptake

Potential for battery storage as % of installed PV (10 kWh/installation)

Data as of April 2015

PV Data from Clean Energy Regulator

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Can storage become a “threat” to utilities?

Source: RMI 2014 “The Economics Of Grid Defection - When And Where Distributed Solar Generation Plus Storage Competes WithTraditional Utility Service”

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CSIRO Future Grid Forum

Battery Costs

ELECTRICITY IN 2050Leaving the Grid Scenario

AROUND

A THIRD OF

CONSUMERS

COMPLETELY

DISCONNECT

FROM THE

GRID

Using a combination

of gas generation,

solar panels, storage

and energy eficiency.

Disconnecting

from the grid as a

residential consumer

is projected to be

economically viable

from around 2030

110 c/kWh 2013 costs of

disconnecting from

the grid

32% 68%

Source: CSIRO Future Grid Forum

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Is this the future?

Source: Michael Mobbs - Sydney

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PV+storage=Grid independence?

Source: Khalilpour & Vassallo, Energy Policy, 82 (2015)

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PV+storage=Grid independence?

The disconnection paradox:

Insufficient PV and storage for all consumption?

need connection for reliability purposes.

Sufficient PV and storage for all consumption?

need connection to sell any excess solar power to the utilityrather than waste it.

Result?

utility customers will still want the wires connecting them tothe wider grid, but far lower need for utility energy.

effect of technology costs

sweet spot for Sydney home, battery ∼$400/kWh and PV∼$1600/kW for 2 kW PV, 5.5 kWh batterybut only provides 35% annual consumption7 kW PV, 25 kWh battery = 93.5% independence at $0 NPV

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FiT, technology costs & unused energy

Source: Khalilpour & Vassallo, Energy Policy, 82 (2015) 30 / 32

Acknowledgments

Kaveh Khalilpour, Keith Mitchell

CSIRO FutureGrid Research Cluster

AusGrid for data

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