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ACTION
Item # 14
To: Board of Directors
From: Stephen Hollabaugh
Date: August 03, 2016
Subject: Consideration of the Future Role of Energy Storage AB 2514 Within
the District
1. WHY THIS MATTER IS BEFORE THE BOARD
AB 2514 requires a Publicly Owned Utility (POU) governing Board to determine if it is
viable and cost-effective to procure energy storage systems for their utility. The
Board must review this every three years. The Board last reviewed this in 2013,
therefore it must review this again in 2016.
2. HISTORY
On September 29, 2010, the Governor signed Assembly Bill (AB) 2514 (Skinner,
statutes of 2010). This legislation is aimed at encouraging electric utilities to access
the appropriate levels of energy storage that may be cost-effectively implemented.
Accordingly, pursuant to Public Utilities Code Section 2835(b), each publicly owned
electric utility is directed to initiate a process to determine appropriate targets, if any,
for the utility to procure viable and cost-effective energy storage systems. If it is
determined that there is an appropriate level of viable and cost-effective energy
storage systems that can be achieved by December 31, 2016, and a second target by
December 31, 2021, the publicly owned utility shall adopt the procurement targets by
October 1, 2014.
In 2013 the Board found that energy storage systems are not currently viable and cost
effective for the District, and the District did not adopt procurement targets.
Energy storage systems are defined in the legislation to mean "commercially available
technology that is capable of absorbing energy, storing it for a period of time, and
thereafter dispatching the energy." Furthermore, in order to be viable, the energy
storage system must "be cost effective and either reduce emissions of greenhouse
gases, reduce demand for peak electrical generation, defer or substitute for an
investment in generation, transmission, or distribution assets, or improve the reliable
operation of the electrical transmission or distribution grid.
3. NEW INFORMATION
Energy storage systems, in order to be viable, must be cost effective and either
reduce emissions of greenhouse gases, reduce demand for peak electrical
generation, defer of substitute for an investment in generation, transmission, or
distribution assets, or improve the reliable operation of the electrical transmission of
distribution grid.
Staff has reviewed "Electricity Energy Storage Technology Option - A White Paper
primer on applications, Costs and Benefits" written by the Electrical Power Research
Institute (EPRI). This white paper includes and Executive Summary, Introduction,
Energy Storage Application Requirements and Benefits, Market Size and Potential,
Technology Options: Energy Storage Solutions and System Costs, Discussion and
Conclusions, Recommendations for Future Work and Appendix A: Framework and
Methodology for Valuation of Energy Storage Applications.
In producing this report, EPRI's Energy Storage Program drew on information from
technology assessments, market analysis, application assessments, and input from
storage system vendors and system integrators. The paper provides an overview of
energy storage applications and technology options, including updated cost and
performance estimates for current and near -term options. Longer -term emerging
systems are also highlighted. A final goal of the paper is to outline a framework and
methodology that electric utilities and industry stakeholders may use in estimating the
value of energy storage systems in the following applications:
• Photovoltaic integration
• Wind power integration
• System applications
• Utility transmission and distribution (T&D) asset management
• Commercial and industrial (C&I) applications
• Distributed energy storage near end -user loads
• Residential applications
For each application area, the report presents an overview of the application and
relevant energy storage solution options, including:
• A brief description of the technologies
• A summary of technology development status
• Current technology performance and costs, including uncertainties
• Comparative benefit and gap analysis by application
• Major technical issues and future development direction and trends
• Development and commercialization timelines
• Relevant market adoption and business issues
• A framework for economic analysis
Renewable Integrafion/Time Shifting
Combined Cycle
C., Turbine
$O.So
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110,
Figure 15
Levelized Cost of Delivered Energy for Energy Storage Technologies Compared to CCGT.
Figure 15, from the white paper, shows that the cost of energy from energy storage is
much higher than a combined cycle gas turbine. The white paper finds that many of the
energy storage options discussed have not been validated in the applications
discussed, and are not "grid -ready".
District Analysis:
The District looked at our geographic location, load shape, type of customers and
existing generation portfolio to do our review of energy storage systems.
Load Shape: Below are a summer and winter month of data showing the load shape
and load factor
WTruckee Load January 2015
Monthly Load Factor = 74.1%
30,000
20,000
10,000
0
January KWH Monthly Avg
K Truckee Load July 2015
W
Monthly Load Factor = 77.1%
25,000
20,000
15,000
10,000
5,000
0
Time - Hrs —July KWH Monthly Avg
With such a high load factor and the current low cost of investment in generation, the
economics of energy storage for the District are not cost effective.
The District found that given this data along with a high monthly load factor (our peak
load is not significantly higher than our average load), winter peaking load, and the
District's load peaks on weekends and holidays, the current cost of investment in
carbon -free generation, energy storage systems are not a cost-effective viable source
for the District at this time.
4. FISCAL IMPACT
There is no fiscal impact of the findings that energy storage systems a r e not
viable and cost effective at the current time.
5. RECOMMENDATION
a) The Board finds that energy storage systems are not currently viable and cost
effective for this District, and the District is currently not adopting procurement
targets.
b) The Board directs staff to re-evaluate this not less than every three years as
required by AB 2514.
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Stephen Hollabaugh Michael D. Holley
Assistant General Manager General Manager