Assessing the potential of battery storage as a peaking capacity resource in the United States. (1st October 2020)

• Record Type: Journal Article
• Authors: Frazier, A. Will; Cole, Wesley; Denholm, Paul; Greer, Daniel; Gagnon, Pieter
• Is Part Of: Applied energy. Volume 275(2020)
• Publication Date: 2020-10-01
• Subjects: Energy storage -- Resource adequacy -- Capacity credit -- Capacity expansion -- Peaking capacity -- Energy policy; Power (Mechanics) -- Periodicals; Energy conservation -- Periodicals; Energy conversion -- Periodicals; 621.042
• DOI: 10.1016/j.apenergy.2020.115385
• Languages: English
• ISSNs: 0306-2619

Abstract

Highlights: Novel approach for approximating capacity credit of energy storage. Economic potential for peaking storage capacity in US could grow to >100 GW by 2050. Regional net load shapes substantially impact regional storage deployment. Ignoring dynamic nature storage capacity credit leads to suboptimal model solutions. Abstract: In 2018, the United States Federal Energy Regulatory Commission established an order requiring all energy market operators in their jurisdiction to allow storage resources to participate as capacity resources. In response to the order, each market operator specified a minimum duration for storage resources to meet or exceed to qualify as peaking capacity. In this work, we assess the impacts of minimum storage duration requirements on energy storage buildout and system operation through 2050 in the United States electricity grid. We also investigate the role that future capital cost reductions play in energy storage deployment in the United States. We use a national-scale capacity expansion model and allow the model to choose from a suite of competing technologies, including battery storage devices of various durations as it builds out a least-cost system. We consider scenarios different minimum storage durations and storage cost projections. We find there is substantial economic potential – greater than 100 GW in some cases – for storage with durations of ten hours or less to provide peaking capacity in the United States. We also find that storage deployment is sensitive to minimum storage duration requirements. Longer requirements reduce the amount of storage deployed. Shorter requirements lead to more deployment, but if they are not adjusted to account for the declining capacity credit of storage, there is greater risk for instances of unserved energy. Our results indicate that the design and implementation of duration requirements can have substantial impacts on storage deployment and broader system reliability.