Energy storage systems may support several electric utility use cases, including grid support, outage mitigation, capital deferral, and improved services to end users. Electric Power Research Institute (EPRI) research in 2009 developed analytics and methods to quantify the locational value of electric energy storage options. The objectives of this project are to apply previously developed and generic energy storage dispatch models and evaluation methods to several cases and locations in the Sacramento Municipal Utilitiy District (SMUD) service territory.
The following key locations were investigated:
- Commercial and residential energy storage systems on the customer side of the meter
- Neighborhood-located storage systems on the SMUD side of the meter
- Substation and transportable storage systems for grid support
This analysis shows that for applications of energy storage located in the SMUD system, regulation and system capacity are the benefits that drive high values. The highest value utility-owned battery applications—both at the substation and as distributed energy storage systems—involve the accrual of regulation and system capacity benefits. The analysis further shows that storage located at the substation has the potential for the greatest benefit to the utility in the near term; substation storage requires less need for the aggregation of many smaller units to capture benefits. Substation storage is most valuable because it can accrue the high-value benefits of regulation, system capacity, and deferral of transmission and distribution investments.
A behind-the-meter storage system could have retail bill impact benefits for customers, but these benefits are lower than the benefits of utility-operated storage. The aggregation of customer-sited storage systems has the potential to combine the retail rate savings seen by the customer with the higher value system and distribution benefits for the utility. In general, for the applications examined in this report, energy storage system life cycle costs will need to fall to approximately $500/kWh or below in order to make batteries cost effective.