Utility Scale Battery Storage – The New Electricity Revolution

by Paul Tuson, Mott MacDonald Africa (Pty) Ltd

Introduction

• Benefits of Battery Energy Storage (BES)

• Large Utility Scale BES Projects worldwide

• Storage technologies

• Forecasted BES prices

• Storage market niche and applications

• BES Environmental factors

• BES System Cost Components

• LCOE analysis

• Conclusions

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Benefits of BES

• Load or peak shifting (both kVA (NMD) and kWh)• Reactive power (kVArh) charge reduction• Load following• Losses reduction• Congestion reduction• Reliability improvement• Capex deferral• Allowing additional load to be connected• Intermittency smoothing• Ancillary Services:

– Frequency stability– Voltage stability (inverters running in SVC mode)

• Replacement of expensive diesel generation• Off-grid hybrid schemes improvement

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Tesla 20MW (80MHh) BESS Southern California Edison

Source: Tesla

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Storage Technologies

Source: Greensmith2017/12/05 Mott MacDonald 5

Projected Utility Scale BES Prices

Source: Bloomberg

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BES Price Forecasts (Battery Cost Only)

Source: IDC

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Stacked Benefits of BESS Versus Costs

Source: IDC

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BES Applications Vs Technology

Source: IDC2017/12/05 Mott MacDonald 9

BESS Technical Comparison

Source: IDC

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Battery Capacity Degradation by Technology

Source: Greensmith

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BES Environmental Factors

Source: IDC

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Flow Battery Process

Source: Greensmith

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BES Cost Build Up

Source: Lazard LCOS Report, Version 2.0, 2016

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Levelised Cost of Electricity (LCOE)

• Mini-RFP

• LCOE Analysis

• Findings

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Mini-RFP Target date delivery to site 2018

Target date commissioning 2018

Market application

Bulk energy, peak shaving and

load levellingNet Battery Bank output (less auxilliary load and other losses) (MW): MW 1 5 10 20

Net Battery Bank Energy (less auxilliary load and other losses) (MWh): MWh 6 30 60 120

Peak power discharge duration (hours) As per energy requirement

Peak power to be sustained for full discharge duration Yes

Oversizing allowed to achieve the sustained peak discharge for discharge

duration

Yes

Dicharge time at power rating Minutes to hours

Suitable storage duration Minutes to days

Modular design (upgradeable as load grows) Yes

Provision of Energy Management System (EMS) Yes

Altitude (m) 1800

Ambient temperature (deg C) -10 to 40

Connection voltages (kV) 11kV

Warranty period (years) 20

Anti-islanding protection Yes

Reactive power management capability (SVC mode) even when no active

power

Yes

Remote monitoring Yes

Outdoor installation Yes

Toxic materials or waste management system Yes

Fire and other protection systems Yes

Funding

Developer Project Finance

(Debt and Equity)

Developer TBA

Contact persons Paul Tuson

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Mini-RFP Costs: MW 1 5 10 20

Capital Cost ($) MWh 6 30 60 120

Energy storage + chemistry

Inverter

BOS, DC rails, etc.

Supply, deliver, install, commission

Energy Management System (EMS)

Power Capital Cost ($/kW)

Energy Capital Cost ($/kWh)

O&M Cost or year or warranty cost per year ($/kW/year)

Technology (enclosed cells, flow)

Electrode chemistry

Electrolyte chemistry

Charge duration (hours)

Discharge duration (hours)

Ratio of charging duration to discharge duration

Guaranteed number of charge and discharge cycles:

Per day

Per year

20 years

Round trip efficiency (%)

Power density (W/L)

Energy density (Wh/L)

Power density (W/Kg)

Energy density (Wh/Kg)

Response time (time required to deliver power)

Depth of discharge (%)

Guaranteed degradation (% of MW)

Guaranteed degradation (% of MWh)

Major maintenance not in O&M or major component replacement over

period of project

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LCOE Calculations

• Capital Cost– Battery system– Inverter– Control System– Balance of System (BOS)– EPC

• O&M costs (annual)• Round trip efficiency (losses on charging and discharging)• Charging Costs• Tax costs (excluded)• Maintenance outages (excluded)• Milestone replacements (assumed in the O&M costs)

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LCOE Calculations

• Capex cost = Capex cost x 1.125

• Charging energy = BES Capacity (MW) x charge duration x 365 x 1000

• Charging cost = Charging energy x charging cost ($/kWh) x 1.125

• Charging cost = Megaflex off-peak tariff: USc5/kWh

• Operating costs assumed at 2% of capex/year

• LCOE = total cost for one year/total discharge energy in one year

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LCOE Calculations

Source: Mott MacDonald

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LCOE Calculations

Source: Mott MacDonald

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LCOE Calculations

Source: Mott MacDonald

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Lazard Report LCOE – Peaker V Flow BES

• Capital LCOE - $206/MWh (46.8%)

• O&M LCOE - $72/MWh (16.4%)

• Charging LCOE - $55/MWh (12.5%)

• Tax LCOE - $32/MWh (7.3%)

• Other LCOE - $75/MWh (17%)

• Total LCOE - $441/MWh (USc44.1/kWh)

• Total LCOE (without tax) – USc33.8kWh

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Greensmith Report - LCOE

Source: Greensmith

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Greensmith Report – LCOE – V Flow BES

• LCOE 2016 – USc45/kWh

• LCOE 2020 – USc25/kWh

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Comparison of LCOEs

• Diesel/HFO generation: USc40/kWh

• Battery Storage: USc23/kWh - USc45/kWh

• Coal Generation: USc10/kWh

• Hydro Generation: USc6/kWh

• Nuclear Generation: USc10/kWh

• Megaflex Winter Peak Tariff: USc20/kWh

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Grids of the future

Source: City Power

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Conclusions

• Certain Flow batteries (e.g. Vanadium Redox Flow) are suitable for utility scale BES due to cyclability and environmental reasons

• Vanadium Redox Flow batteries currently have a relatively poor round trip efficiency (75%)

• At current battery prices, Utility Scale BESSs can price-displace peaking Diesel/HFO generation and almost displace current Megaflex winter peak tariffs

• When stacked benefits considered, BESS even more viable• BESS systems can be installed in <12 months. Easily modularised

to match customer changing requirements and are do not impose huge capital/regulatory burdens

• Multiple small BESS systems can be distributed within the Transmission and Distribution networks to match load

• BESS systems are environmentally friendly and can support stakeholders’ “Green” objectives

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Thank you

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Load or Peak Shifting Eskom ToU Tariff

Source: Eskom

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Eskom Peak Megaflex Tariff

Source: Eskom

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Load or Peak Shifting

Source: PVH Energy Storage

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RE Generation intermittency

Intermittent RE generation and Frequency Instability

Expensive Diesel to control frequency

Source: Mott MacDonald

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RE Generation intermittency

BESS System Smooths RE Generation

Intermittency at Lower Cost

Source: Mott MacDonald

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Congestion/Losses/Voltage

Congested or Overloaded Distribution System at System Peak

System LossesLow Voltage

Expensive Diesel Plant at System

Peak

Source: Mott MacDonald

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Congestion/Losses/Voltage

BESS de-loads Distribution System at System Peak

Losses ReducedVoltage Normal

Diesel Usage Decreased at System Peak

Capex Deferral

Source: Mott MacDonald

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BES Allows Connection of Additional Load

BESS allows additional load

Source: Mott MacDonald

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kVA Demand Charge Saving

Source: Eskom

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Eskom c/kVArh Tariff

Source: Eskom

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Generator/PV/Battery Hybrid Schemes

Source: ABB2017/12/05 Mott MacDonald 40

BES Applications

Source: City Power

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BES Benefit Stacking

Source: City Power

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