Alberta Saskatchewan Intertie Storage

ASISt Project Alberta Saskatchewan Intertie Storage

A CAES Study of Energy Storage for Alberta

Presented to the

Alberta Energy Storage Symposium

November 19, 2013

Rocky Mountain Power (2006) Inc. www.rockymountainpower.ca

403 710 6300

www.rockymountainpower.ca

Conventional CAES System

2

Air Storage

PC = Compressor power in

PG = Generator power out


Proposed Facility Location

3

ATCO Substation

SaskPower Substation

A

B

Lloydminster

www.rockymountainpower.ca 4

• Discharge (Generation) – 125 - 150MW. • Charge (Compression Load) – 100 - 200MW. • Storage Capacity ≈ 12 to 60 hours:

– # of caverns ≈ 2 (each ≈ 450,000 metersᶾ)*.

• Initially connect only to AIES. • Future AC interconnect with SaskPower:

– Create a virtual intertie.

• Ramp rates ≈ 20%/min. of rated plant output*. • Heat rates ≈ 4000GJ/MWhr.* • Switch from load to generation in 10 minutes.* • Capital Cost ≈ $2MM/MW of generation. * Source - Dresser Rand

Proposed ASISt Storage Facility

www.rockymountainpower.ca 5

• Construction employment – direct & induced: – 1679 over 2.5 years.*

• Permanent jobs created: – 10 to 15.**

• Permanent employment income – direct & induced: – $1.6 - $2.5 MM/year.*

• Sources: *Lloydminster Economic Development Corporation ** Lessons From Iowa.

Economic Spin off Benefits


ASISt Project Status

6

• Conditional funding from AI-EES & NRC-IRAP - $350K. (Matching equity required).

• Initial geologic report (AITF) substantially completed.

• Underground engineering studies underway (Soltech Projects).

• SASR process with AESO underway (b7kennedy and Associates Inc.)


Salt Core Near ASISt Location

7

Nearly Pure Halite

Anhydrite Layer

Sylvinite


Operations & Financial Model.

8

• Operations Module: – Historic hourly Alta (and MISO) pool prices,

– hourly wind data for each Alta. wind farm,

– Charge/discharge algorithms mimic storage.

– Calculate storage volumes and annual revenue for: • in-Alberta time of day arbitrage,

• operating reserves services in Alberta and,

• inter-regional arbitrage (if AC ties to both Ab. & Sask.)

• Financial Module: – ASISt as a merchant facility - Could be grid asset,

– Standard financial outputs – IRR, NPV, DSCR etc.


Historic Wind Energy Discount

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Ave 2008 2009 2010 2011 2012

Ave Pool Price $64.52 $89.95 $47.81 $50.88 $76.22 $52.74

Ave Wind Price $48.46 $71.62 $42.22 $38.03 $49.97 $17.41

-25% -20% -12% -25% -34% -67%

-$10.00

$0.00

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

$70.00

$80.00

$90.00

$100.00

$/M

Wh

Annual Averages of Hourly Alberta Power Pool Data Jan. 1 2008 - Jul. 31 2012.


Netback Financial Model – 150MW

10

Calculate historical revenue uplift, net of storage & transmission costs, for wind farms. Can do for all types of generation if hourly data available.

Netback Example: CAD %

Benchmark Energy Revenue MM/yr $74.29

Revenue from Direct Sales MM/yr $68.72

Revenue from Storage Retiming MM/yr $66.20

Gross Energy Revenue MM/yr $134.92

Less:

Cost of Losses

Annualized Storage Costs

Equals

Netback from Wind Time Shift Arb. MM/yr $84.34 14%

Add:

Operating Reserves Revenue

Inter-regional Arbitrage Revenue

Equals

Total Netback Benefit MM/yr $99.84 34%

Note: all values are estimates by ASISt and are subject to change.


Twelve Month Work Plan

11

• Complete FEED studies:

– in-depth geo-tech analysis,

– above ground engineering,

– Facility configuration optimization studies,

– High level environmental review.

• Continue SASR process.

• Commercial support.

• Procure land options and mineral rights.


Why Have We Chosen CAES?

12

• Each ES technology has advantages.

• ES market will grow: – e.g. California has

mandated procurement of 1.3GW of ES by 2020.

– Enable more wind and solar generation.

• CAES and PH are best large scale energy storage technologies.

Source: Rastler, D. EPRI 2010



13

• Low cost

Source: EPRI 2010



14

• Low technology risk. (Two facilities built.)

• Generation redundancy: – Like hybrid vehicles - two energy inputs,

– Operate as SCGT if stored energy depleted.

110MW CAES plant in McIntosh Alabama Commissioned in 1991

290MW CAES plant in Huntorf Germany Commissioned in 1978



15

• Difficult to find good PH sites in Ab. & Sask. • Ab. & Sask. have good geology for CAES

– AITF geologic report said: • … initial findings indicate that insoluble anhydrite layers are

of sufficiently low thickness that salt dissolution and cavern formation may be undertaken; and

• Candidate units for brine disposal include the Basal Cambrian Sandstone and the Cretaceous Dina Member. The Dina Member, however, is a more likely candidate, due its shallower stratigraphic location and high porosity and permeability values.

• Multiple water sources for brining available.



16

• Many types of potential customers

– AESO for Op. Res. (generation & compression).

– Intermittent generators (wind/solar).

– Power traders – intra-Alberta & inter-regional.

– Distributors & Industrials - reduce price volatility.

– Data centers (co-location):

• Growth market,

• Requires high degree of power source security,

• CAES provides built in back up generation.

• ASISt may access power from both Alta. & Sask.


What needs to happen in Alberta

17

• DTS rates should not apply (except for station load):

– Storage is not an end use customer,

– System benefits from ASISt.

• DOS rates may also not apply:

– Transmission double counting,

– ASISt a net generator and already pays STS.

• Change rules for Operating Reserves:

– Include dispatcheable load (compression),

– Include separate ramp up & ramp down for RR.


Industry is Adopting ES Policy

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• FERC EL01-70-000 (June 2001) delivery of electric energy into ES resources is an energy exchange transaction and does not involve the consumption of electric energy.

• US Storage 2011 Act (Nov 2011) is a bill to recognize ES as a stand-alone technology and to provide an energy investment tax credit (ITC) for energy storage property connected to the grid.

• PUCT / ERCOT (April 2012) clarifies that wholesale storage is not subject to ERCOT charges and credits associated with AS obligations or other load charges and allocations.

• California Bill AB 2514 (Sept. 2010) directed the CPUC to define “appropriate” ES procurement targets. October 2013 decision requires 1,325MW of ES procured by 2020.


ASISt Benefits Summary

19

• Intermittent Generators:

– Energy purchase/delivery time shift improves economics for wind and solar farms.

• Grid Systems:

– Increased reliability / delivery of AS,

– More efficient utilization of transmission system,

– Potentially relieve transmission congestion.

• Ratepayers / Society:

– Power pool price arbitrage reduces price volatility,

– Enables renewable energy, reduces GHG emissions.


Contact Information

20

Jan van Egteren

President

403-710-6300

[email protected]

Lorry Wilson

Chairman

403-815-6565

[email protected]

mailto:[email protected]



Alberta Saskatchewan Intertie Storage

Documents

asist storage facility

storage retiming mmyr

storage volumes

storage capacity

caes study of energy

nchmark energy revenue

gross energy revenue

air storage pc