Why you should listen to this podcast
In this podcast we talk with Jacqueline DeRosa from Customised Energy Solutions and Randell Johnson from Alevo Analytics.
We wrote a note earlier this year talking about the Massachusetts “State of Charge” report and the earlier Brattle report prepared at the request of Oncor, a large utility operating in the TX ERCOT market.
We thought the State of Charge report was the most innovative and far sighted piece of research into utilities that we had seen in 2016. The report was innovative because it started from ground zero, ignoring all the regulatory constraints and modelled out storage in the Massachusetts electricity system. The modelling was highly original in that it was from a whole of system perspective. Publicly available models in Australia typically just cover generation. What individual network models are done are not generally publicly available but in any case don’t consider generation and networks together as this report does. The report showed that 1.7 GW of storage was economic on the system (about 14% of peak demand).
If it did nothing else the report would still have been highly valuable and original. As Randell Johnson from Alevo Analytics states on the podcast AEMO in Australia has had a “just count it” approach to storage and simply looked at cost without taking any consideration of benefits. In our view Australia needs more than this.
Report was heavily supported and well received
In the podcast Jacqueline and Randell talk about how involved all the stakeholders were in the process, the fact that the legislation has already been changed and the positive reception to the report. Our view is there would be widespread support for a similar effort in Australia. This could provide some common ground for a fresh start and de politicization of Australia’s increasingly difficult to manage and rapidly changing electricity sector.
The problem is only 1/3 of benefit available to storage provider
The problem the report identified, and more importantly quantified, was that the owner of the storage can typically only access about 1/3 of the total benefit the storage provides to the system as a whole. We in Australia understand this in a general sense but the value of this research is in quantifying the benefits. In our view there is an important need in Australia for some whole of system modelling. This would cover not just storage but also look at distributed energy, specifically PV from a whole of system approach rather than the piecemeal view typically taken.
Still staying with storage we reproduce the following diagram from the State of Charge report that looks at the economics of network utility storage ,that is just one of the ten use cases examined and spelled out the attainable and “free” costs and benefits.
In Massachusetts the Utility was the best place for storage
The report found, based on work done by Customised Energy Solutions[CES] that about half the storage the model installed was best placed around grid sub stations.
In Australia we would expect the use cases to be quite different because:
- Our network costs are much higher than in MA per unit of electricity consumption. That’s because Australia has very low consumption per Km of grid wire by global standards.
- The installed based of rooftop PV is massively higher.
- Wind penetration provides much better economics for storage in managing momentary shifts in wind production.
However we just won’t know until some decent modelling is done.