Navigant Research Blog

Energy Storage Association Offers a Call to Action for New Policy

— December 14, 2017

In collaboration with Navigant Research, the Energy Storage Association (ESA) recently published its latest white paper, 35×25: A Vision for Energy Storage, analyzing the evolving needs of the electric grid and the market drivers powering rapid energy storage industry growth. The study introduces the current state of the industry along with a vision where widespread storage deployments result in major economic, environmental, and social benefits.

Key to the paper’s findings is a call to action section outlining policies and programs being implemented around the country to support the growth of the industry. Over the coming years, changes in both government and regulatory policies will have a substantial effect on how the market develops and at what scale. Players in the market should ensure they fully understand the changes that may be coming and how they will shape future opportunities.

ESA’s call to action highlights considerations and actions for both legislators and industry regulators that seek to capitalize on the multitude of benefits provided by energy storage. For legislators, there are four primary categories of initiatives being explored that offer both direct and indirect support as follows:

  • Energy storage impact studies: A strong understanding of the benefits of energy storage is a great first step, allowing local stakeholders to quantify the impacts of storage deployments, such as upfront and ongoing expenses, grid operating cost savings, improved reliability, emissions reductions, and job creation. 
  • Procurement targets or mandates: Multiple states have implemented targets that serve to clarify long-term policy objectives for the industry, spurring action from utilities and providing operational experience for stakeholders. 
  • Incentive programs: Including subsidies, grants, and tax credits, which lower the costs for new storage projects to accelerate market growth and establish a sustainable local industry. 
  • Clean energy standards: A clean energy standard, or clean portfolio standard, is similar to a renewable portfolio standard; however, it often has a broader focus. States including Connecticut and Vermont have implemented standards to ensure storage is compared side-by-side with other resources in planning processes and require electricity providers to implement new technologies.

Many of the legislative actions taken to support energy storage, such as subsidies and procurement mandates, have received significant media attention. However, in many cases, the local regulators have more influence over a market’s growth. Out of an obligation to protect ratepayers and oversee utility investments, regulators must work collaboratively with all stakeholder groups to facilitate constructive dialogue around the deployment and integration of storage systems. ESA’s white paper outlines steps that can be taken by regulators as follows:

  • Clear rules regarding storage: Do current regulations adequately account for energy storage participation? If not, work with utilities, industry participants, and research organizations to better define participation methods and strategies for new technologies.
  • Updated modeling in proceedings: Many of the modeling tools used in integrated resource planning proceedings today lack sufficient granularity and an evaluation methodology that properly incorporates energy storage. For example, models for storage should assess the effect of deployments at specific locations and over sub-hourly time intervals.
  • Streamlined interconnection standards: Despite efforts, current interconnection procedures often pose a significant barrier to new entrants. Streamlining interconnection processes is critical to enable grid modernization.
  • The effects of rate design: New rate structures that accurately reflect the locational and time-based costs and benefits of integrating distributed energy resources, including energy storage, should be explored.

At this stage, it is critical that industry participants with in-depth knowledge on the true costs and benefits of energy storage technologies participate in policy development to ensure a level playing field is created. Along with greater detail on the policy initiatives listed above, ESA’s white paper quantifies the diverse benefits of energy storage and how this disruptive technology can transform the electricity industry.

 

Mountain West States Buy In on Regional EV Fast Charging Network

— December 14, 2017

To support the growth and adoption of EVs on their regions’ roadways, governors of eight Mountain West states signed a memorandum of understanding (MoU) to work collaboratively on a regional EV fast charging network spanning across 5,000 miles of freeway. They will also work on a plan for the EV charging infrastructure to link their states together. The states that have signed on so far are Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, and Wyoming.

Anticipating EV Population Increases

These states have recognized the growth of EV populations and anticipate EVs will continue to penetrate the markets. As discussed in our Market Data: EV Geographic Forecasts report and illustrated in the following chart, Navigant Research expects sales of over 1.6 million plug-in EVs (PEVs) by 2026 in North America.

Historic and Projected Sales of PEVs, Base Scenario, North America: 2012-2026

Source: Navigant Research

Pursuing Goals

The goals of the MoU are to accomplish the following:

  • Coordinate station locations to maximize use and minimize inconsistency between charging infrastructure.
  • Develop practices and procedures to encourage the adoption of EVs and address range anxiety.
  • Develop operating standards for charging stations.
  • Incorporate EV charging stations in the planning and development process.
  • Encourage automotive OEMs to stock a variety of EVs in participating states.
  • Collaborate on funding and finding opportunities for the network.

Direct current (DC) fast charging stations will cost between $150,000 and $200,000 each. It would require 50 to 60 stations to electrify the key travel corridors in Colorado, according to officials.

Following in Their Footsteps

Unsurprisingly, West Coast states have already tackled a similar project. In 2013, California, Oregon, Washington, and British Columbia signed on to the Pacific Coast Action Plan on Climate and Energy. They committed to the creation of an electrified highway corridor connecting the three states and the province. In the years since, the governments have been able to install a network of DC fast chargers along Interstate 5, Highway 99, and other major roadways dubbed the West Coast Electric Highway.

Tackling the Funding Puzzle

The Mountain West states are looking for sources of funding as they move forward with their own plans for a regional highway. While the West Coast Electric Highway project was able to capitalize on federal grants and funding to capture investments, the current administration and majority party seem less keen on assisting the adoption of EVs, meaning the Mountain West states may have to look elsewhere. Colorado has identified and is already planning on using some of the funds received from the Volkswagen settlement, Electrify America, to drive interest in public-private partnerships to develop its electrified highway infrastructure. That being said, the MoU does not specify funding requirements or timeframes for the project or any of the states.

Absent the support of the federal government, the success of this regional project rests on the political will of the state governments and continued support from elected officials, automakers, utilities, and planners.

 

Even If It Doesn’t Survive, the Tesla Vision Has Already Won

— December 14, 2017

Whatever the ultimate fate of Tesla as a business, the vision of its founders seems assured to come to fruition. They set out nearly 15 years ago to build an electric sports car that would show a skeptical public that EVs aren’t the car form of broccoli (good for you, but not much fun). The envisioned electric car would be a gateway to electrifying all transportation.

With every new job at an EV maker, we are moving closer to that goal. Sales of the Chevrolet Bolt EV climb steadily with each month, Nissan is about to launch the second-generation LEAF, and more options will arrive in the coming months. Perhaps most importantly, the future combination of automated driving and electrification will provide great synergy in making transportation clean and safe.

The Bolt and LEAF are examples of automakers taking inspiration from Tesla and mixing traditional expertise in mass manufacturing and support. These automakers and most others are now aggressively developing and planning deployment of automated EVs like the Chevy Bolts being tested in San Francisco, California by GM unit Cruise Automation.

Can Tesla Stay Afloat?

Sadly, Tesla’s own quarterly financial statements don’t bode well for the brand that kick-started this next era of mobility. The company has shown an inability to execute on the core task of profitably building consistently reliable, high quality products to customers. The 3Q 2017 report showed the company was spending more than $2,000 per year per vehicle providing service while only generating $1,000 in revenue. Given the reduced maintenance an EV should require compared to an ICE, this is a clear indicator of Tesla’s spending on honoring warranties. As the in-service vehicle fleet grows, this problem will grow rapidly unless the company can come to grips with the basics of mass manufacturing.

As Tesla attempts to ramp up production of the Model 3, it must first address these challenges—or the reputation the brand has built around Elon Musk’s cult of personality will be squandered.

The Quandary of Some Typical Tesla Customers

Take, for example, a Northern California couple that can afford to buy a Tesla, including the Model X they own. He loves technology and is the definitive early adopter, often buying the latest life-enhancing gadgets. His CEO wife is far more pragmatic, though she also appreciates what technology can do to make life easier and better. She wants to replace her current premium German performance car with an EV when the lease is up in the next month. On the surface, another Tesla would be the obvious choice, but they’ve had numerous issues with it that have taken multiple service trips to resolve. Some issues, like an Autopilot system that has a predilection for randomly shooting toward guardrails, remain unresolved.

They looked at the 2018 LEAF this week, and she is seriously considering it. While it lacks the performance of the Tesla, she expects it to be far more reliable, coming from a company that knows how to bend and weld steel. Despite the problems with the Tesla, her husband wants to stick with the brand to support the vision. Fortunately, he’s in a financial position where he can do that. Most of the car buying public can’t afford to be so tolerant.

If Musk wants Tesla to remain a viable business after he rockets off to Mars, he needs to start listening to frustrated Tesla owners like this pragmatic CEO rather than reveling in his adoring fans.

 

Why Does Diesel Win in Places like Puerto Rico? It’s 9,000 Times Better Than Solar PV by This Metric

— December 12, 2017

In the aftermath of natural disasters like Hurricane Irma, there is much talk about how renewables are the ideal backfill to replace and modernize electric grids. Indeed, renewables like solar PV and wind, along with energy storage, grab headlines due to their falling costs, low lifetime carbon emissions, and general excitement about their deployment and future potential. Why, then, was the largest immediate post-storm addition a pair of 25 MW diesel-fired turbines installed by APR Energy?

Compactness Is Key

In addition to dispatchability and fast install (the plant was operational in 15 days), a key factor is energy density, defined here as daily energy output per acre of plant area. By Navigant Research numbers, combustion turbines like the ones installed by APR can produce as much as 6,200 MWh in a day using 1 acre of land. Compare that to solar PV, which is smaller by a factor of 9,200; based on National Renewable Energy Lab data, solar PV can be expected to produce about 0.67 MWh in an acre. The figure below indicates energy density by corresponding bubble size. The numbers vary by project, but the contrast is stark. Reciprocating generator sets (gensets) are compact, more distributed than the turbines, and a key part of the recovery (with the installation of 375 generators noted by this article). There are also headlines citing fast installation of renewables in microgrids, a clear trend of the future. Still, many of the high output, dense systems tend to be based around fossil fuels.

Energy density has two components. Power density (along the vertical axis) indicates the footprint needed for energy production in any instant of time. Combine that with the second component—capacity factor, along the horizonal axis—and fossil-fueled generation can look exceptionally appealing thanks to its availability nearly 24/7. A crucial advantage is the system’s dispatchability, the ability to provide power on demand.

Energy and Power Density by Technology: Daily Delivered Energy (MWh) in 1-Acre Footprint,
North America: 2017

*Assumes 6-hour (150 MWh) battery discharges 80% of capacity, once daily.

**Equivalent hours/day at max output, assuming consistent demand for power.

Sources: Bloom Energy, Caterpillar, General Electric, National Renewable Energy Laboratory, NGK

Island nations are often constrained on space and need to fit generation among existing infrastructure—especially after a disaster. Many are among the most cramped on Earth, with Japan, Taiwan, the Philippines, Puerto Rico, and many Caribbean nations falling in the top one-sixth of all countries by population density. Though rooftops are available for solar PV, they can be small and may need retrofits. Offshore wind is quickly becoming more appealing, too (though if the grid goes down, it can’t provide onsite, distributed power).

Hybrid Systems Hold Promise

While diesel has the advantage of compactness and dispatchability, it is also expensive, challenging to transport long distances, and emits lots of greenhouse gases and other criteria pollutants like NOX and particulate matter. Natural gas holds many of the same advantages while avoiding many of the cons of diesel; where it is available, it often outperforms diesel. Dual-fuel turbines and gensets can be even more attractive—the Puerto Rico turbines produce power at 18.15 cents/kWh on diesel and less on natural gas when it’s available.

Still, natural gas faces similar hurdles to those noted for diesel (albeit lower ones). In many cases, the optimal system is hybridized—relying on a mix of fossil fuel and renewables. Despite all the buzz around solar, storage, and other renewables, reliance on only those technologies is often cost prohibitive. Hybrid microgrids based around diesel or heavy fuel oil generation can often see fuel savings of 10%-30% or more with the addition of new technologies like solar PV, wind, and storage.

 

Blog Articles

Most Recent

By Date

Tags

Clean Transportation, Digital Utility Strategies, Electric Vehicles, Energy Technologies, Policy & Regulation, Renewable Energy, Smart Energy Practice, Smart Energy Program, Transportation Efficiencies, Utility Transformations

By Author


{"userID":"","pageName":"Webinar Sponsors","path":"\/webinar-sponsors","date":"12\/18\/2017"}