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Applied Energy 124 (2014) 377388Contents lists available at
ScienceDirect
Applied Energy
journal homepage: www.elsevier .com/locate /apenergyAssessment
of energy storage for transmission-constrained
windhttp://dx.doi.org/10.1016/j.apenergy.2014.03.0060306-2619/ 2014
Elsevier Ltd. All rights reserved.
Corresponding author. Tel.: +1 (734) 763 3243.E-mail address:
[email protected] (J.X. Johnson).Jeremiah X. Johnson , Robert De
Kleine, Gregory A. KeoleianCenter for Sustainable Systems, School
of Natural Resources & Environment, University of Michigan, 440
Church St., Ann Arbor, MI 48109, United States
h i g h l i g h t s
We assess the potential for energy storage to economically
decrease wind curtailment or decrease system costs. We assume that
the wind is under contract via a power purchase agreement. Maximum
viable energy storage costs were $780/kW with ten hours of storage
capacity. Sizing the energy storage to reduce a small portion of
curtailment supports higher unit cost batteries. Significant
curtailment persists even with high capacity energy storage.a r t i
c l e i n f o
Article history:Received 17 June 2013Received in revised form 31
January 2014Accepted 2 March 2014Available online 11 April 2014
Keywords:WindCurtailmentEnergy storageTransmissionPower purchase
agreementa b s t r a c t
Grid-scale energy storage is one option to reduce curtailment
and increase deliverability of transmission-constrained wind. This
study examines four hypothetical wind and transmission projects in
the UnitedStates to quantify the reduction in curtailment under
various energy storage configurations anddetermine the cost targets
that energy storage must achieve to become a viable solution for
use withremote wind. The delivered cost of wind is determined using
a power purchase agreement approachand six AC transmission voltage
classes are considered. The findings show that curtailment
reductioncan be achieved with energy storage costs as high as
$780/kW with ten hours of storage capacity, a valuethat is 5085%
lower than current cost estimates for redox and sodium sulfur
batteries. Batteries withhigher power ratings result in greater
curtailment reduction, but also lower maximum viable costs.
Sizingthe battery to reduce a small portion of curtailment allows
for higher utilization of the storage andsupports higher cost
batteries. Using energy storage to increase wind installed capacity
can also beeconomically viable, but at costs lower than those for
curtailment reduction. The results were mostsensitive to the
elimination of wind subsidies, the installed cost of transmission,
battery efficiencydegradation, and battery cycle life. The study
did not show economic viability for the use of energystorage to
reduce transmission voltage class.
2014 Elsevier Ltd. All rights reserved.1. Introduction
The highest quality onshore wind resources are often located
farfrom load centers and a significant amount of new
transmissionwill be needed to support high penetrations of wind
energy [1].Minimizing the cost to deliver remote wind is essential
for thistechnology to continue to compete with other renewables
andwith traditional generation. Energy storage co-located with
thewind resource can reduce curtailment, increase transmission
lineutilization, allow for lower voltage lines to be used, and,
poten-tially, decrease the delivered cost of energy. The cost of
energystorage is currently too high to justify widespread
deploymentfor this purpose. The goal of this paper is to quantify
the reductionin curtailment under various energy storage
configurations anddetermine target costs for grid-scale energy
storage that improvesdeliverability or reduces costs of
transmission-constrained wind.To do so, this study assumes that the
delivered wind is under con-tract via a power purchase agreement,
with contract prices basedon the delivered cost of energy (i.e.,
inclusive of wind and trans-mission). This analysis is useful to
set cost targets for grid-scale en-ergy storage and illustrate the
configuration and size of batteriesnecessary to reduce curtailment
or increase the deliverability of re-mote wind. The analysis does
not target specific types of energystorage, but intends to inform
the discussion on the potential roleof energy storage for
transmission-constrained wind.
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378 J.X. Johnson et al. / Applied Energy 124 (2014) 3773881.1.
Delivering wind
Wind generation is a mature technology over 13 GW of
newinstalled capacity was added in the U.S. in 2012, bringing the
totalinstalled wind capacity to 60 GW [2]. Global installations now
ex-ceed 280 GW [3]. The highest quality wind resources are often
re-mote and lack access to transmission to bring it to market.
Whenplanning for wind development, one must consider the
economictradeoff between developing lower quality local resources
or build-ing transmission to access distant, but higher quality,
wind re-sources. Wind output is variable and the average project
capacityfactors are 33% across the large sample of projects
examined byLawrence Berkeley National Labs, with very few projects
achievingcapacity factors greater than 50% [4]. Accessing remote
wind withdedicated transmission forces a trade-off between building
wind inexcess of the available transmission capacity (resulting in
curtail-ment) and maintaining transmission with low
utilization.
The two main drivers for wind curtailment are
inadequatetransmission capacity and the ability of conventional
generatorsto vary output, particularly during off-peak hours [5].
In recentyears, forced curtailment of wind has significantly
reduced totaldelivered wind energy. In 2009, 17% of potential wind
generationwas curtailed in ERCOT, the grid operator in Texas. This
droppedto 8.5% in 2011, due in part to a new transmission line
linkingthe West zone with the South [4]. While the ERCOT region
hasencountered some of the most significant wind curtailment,
otherregions face non-trivial levels; in 2011, 3% of potential wind
gener-ation in the Midwest ISO (less Northern States Power) was
cur-tailed in 2011 [4].
Options to reduce wind curtailment and increase wind
deliver-ability include increasing transmission loadability,
increasing loadat the wind site, increasing the diversity of the
wind resource, andadding energy storage. Increasing transmission
capacity beyondthe cost-optimal level will result in the rising
delivered cost ofwind unless the excess transmission capacity is
used to carry other,non-wind generation. Increasing the load at the
wind site is notwithin the influence of wind developers; while low
cost energyfrom wind may attract industry, this is not typically a
planningobjective for developers. Increasing the diversity of wind
resourcecan result in a flatter, less variable wind shape, which in
turnwould lead to higher transmission line utilization. This is
withinthe ability of transmission developers to influence, but one
mustconsider the additional cost of spur transmission lines to
reachprojects in multiple wind regimes. Energy storage offers the
poten-tial to flatten the wind generation shape, reducing
curtailment andincreasing transmission line utilization. This study
examines thisoption using energy storage for
transmission-constrained wind to assess the cost targets needed to
achieve viability.
1.2. Grid-scale energy storage for wind
With the exception of several dozen pumped storage
hydrofacilities, there are few grid-scale energy storage facilities
in cur-rent operation. In 2010, the Electric Power Research
Institute(EPRI) estimated that there is 127,000 MW of global pumped
hydrocapacity, dwarfing 440 MW of compressed air energy
storage(CAES), and approximately 400 MW of batteries [6]. Despite
thelack of wide-spread adoption, there is recognition of the
varietyof potential applications for large scale energy storage,
includingproviding balancing services to accommodate variable
renewables,energy arbitrage to reduce peak prices and manage
congestion,load following, deferring transmission and distribution
invest-ment, and improving power quality and reliability.
Major studies, including those by the Pacific NorthwestNational
Laboratory [7], Sandia National Laboratory [8], and theEPRI [6],
have evaluated the market potential and value of
variousapplications for energy storage. Denholm and Sioshansi found
thatco-location of energy storage and transmission-constrained
windallows for more efficient use of the winds transmission
capacity,but also subjects the energy storage to line losses and
limits itsability to maximize revenues on the grid [9]. The
findings showthat reducing transmission capacity by co-locating
energy storagewith wind would be economically justified for a
significant numberof projects based on recent costs for
transmission.
In an examination of the ERCOT market, Denholm and Handfound
that greatly increasing the flexibility of traditional genera-tion
could allow penetration of wind and solar up to 50% with
cur-tailment rates less than 10%. To achieve 80% penetration,
loadshifting and storage equal to one day of average demand is
needed[10]. Fertig and Apt also examined the ERCOT region to assess
com-pressed air energy storage (CAES) integration at specific sites
usinga multiparameter optimization of wind, CAES, transmission,
anddispatch. They found that a baseload CAES/wind system is
lessprofitable than a natural gas combined cycle under most
scenarios[11]. Greenblatt et al. also examined the competition
between nat-ural gas combined cycles and CAES to make baseload wind
[12].Their findings suggested that high natural gas prices
(>$9/GJ) orhigh carbon prices ($35/tCeq) would be necessary for
CAES to bea competitive option. DeCarolis and Keith demonstrated
thatincreasing wind diversity through spatial distribution of sites
pro-vides benefits in excess of the costs of additional
transmissioninfrastructure and there is a trade-off between wind
site diversityand storage [13]. Succar et al. developed a model to
jointly opti-mize the wind turbine specific rating and CAES
configuration usinga levelized cost of energy approach, and found
that such an optimi-zation would decrease the baseload plants
storage capacity anddecrease greenhouse gas emissions [14].
Madlener and Latzexamined a wind and CAES system using a
profit-maximizingalgorithm and found that centralized storage
performed betterthan integrated storage [15].1.3. Objectives
This study examines the potential of grid-scale energy storageto
reduce the delivered cost of remote, transmission-constrainedwind.
This study is novel because it assumes that the wind is undera
power purchase agreement (PPA), as opposed to receiving
marketenergy prices. In 2011, 51% of new U.S. wind development
wasunder a PPA and 25% was utility owned, while only 21%
wasmerchant or quasi-merchant [4]. That implies that
three-quartersof new wind (i.e., PPA and utility-owned) was likely
priced on adelivered cost of energy basis, while a far smaller
fraction receivedmarket energy rates. Another differentiator is
that this studyexamines the AC transmission development considering
multiplevoltage classes. Most comparable studies conducted to
dateassume DC transmission despite the fact that the vast majority
oftransmission is AC in the U.S.2. Methods
In this analysis, we develop a constrained optimization
problemto minimize the delivered cost of energy of a wind and
transmis-sion system which represents the cost of delivered energy
for aPPA-based project. These optimizations are conducted in a
VisualBasic model that maintains the chronological nature of the
windgeneration data and the associated behavior of energy
storageand deconstructs the delivered costs into three elements:
therevenue requirement for the wind, the revenue requirement forthe
transmission, and the amount of delivered wind after account-ing
for curtailment and line losses. The approach taken for each
ofthese elements is discussed in Sections 2.2.12.2.3,
respectively.
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J.X. Johnson et al. / Applied Energy 124 (2014) 377388 379After
minimizing the cost of delivered wind, we then introducebatteries
in varying configurations to determine the breakevenbattery cost
(i.e., the battery cost below which would decreasethe delivered
cost of energy) for three applications: reducing cur-tailment,
reducing the transmission voltage class, and increasingthe wind
installed capacity. With base case assumptions, the deliv-ered cost
of energy is constant across all hours (i.e., the PPA isstructured
to value all hours equally). A time of day contract whichvaries the
cost for on-peak and off-peak hours is also examined, inaddition to
a sensitivity analysis on several key assumptions.Fig. 2. Wind
durations curves for four selected sites.2.1. Scenario
description
Four hypothetical transmission lines are represented, selectedto
provide a variety of wind resource quality and transmission
dis-tance, as shown in Fig. 1. Line A represents a 500 mile
transmissionline connecting west Iowa wind with the Chicago area
market,while Line B is a 100 mile transmission line interconnecting
theMinneapolis area with wind resources in southern Minnesota.
LineC connects upstate New York to the metro New York City area
(300miles) and Line D connects Maine with Boston area load
(260miles). The transmission line length is 40% higher than
thestraight-line distance between the points, to allow for the
trans-mission path to avoid difficult terrain and populated areas.
SitesA and B were developed with a range of 0 MW to 1000 MW ofwind,
Site C has between 0 MW and 700 MW, and Site D has be-tween 0 MW
and 600 MW. These ranges of potential developablewind were selected
to provide illustrative examples of a varietyof wind-transmission
scenarios. In each case, the theoretical windresource exceeds these
limits.2.2. Determining the power purchase agreement price by
cost-minimizing a wind-transmission system
2.2.1. Calculating the revenue requirements for windWind speed
data for each site, at ten minute intervals and 80 m
hub height, are from National Renewable Energy Labs EasternWind
Dataset [16]. A wind power curve representative of a con-temporary
GE 2.5 MW wind turbine (IEC Class II) was employedto determine
generation as a function of wind speed. An outagerate of 4% was
applied randomly across all time intervals.
Fig. 2 shows the wind duration curves, representing one year
ofhourly wind generation at each site, sorted in descending
order.The capacity factor at Site A is 51%, Site B is 46%, Site C
is 43%,and Site D is 35% (prior to including the impact of
transmissionlosses and curtailment). The shape of these curves
determine thelevel of curtailment at a given transmission
capacity.
The annual revenue requirement needed to support wind ineach
scenario is determined by levelizing the project costs overFig. 1.
Map of four scenarios. Wind map adapted from the National
RenewableEnergy Laboratory.the project life based on the assumption
that the discountedproject costs would equal the discounted revenue
requirement(and thus the PPA terms) over the project life, as shown
inEq. (1) and following the approach described in CBO, 2008
[17].
XT
t01 rWACCt RRwind;t
XT
t01 rWACCt Cwind;t 1
where rWACC equals the weighted average cost of capital,
RRwind;t isthe revenue requirement for the wind project in year t
in $, andCwind;t is the cost of the wind project in year t in
$.
The costs for each project are evaluated twice: once with
theproduction tax credit (PTC) which is a subsidy for the first ten
yearsof operation and is a function of generation (as shown in Eq.
(2)),and once with the investment tax credit (ITC) which provides
asubsidy as a function of installed cost (as shown in Eq. (3)).
Thelower cost option is selected.
Cwind;t rdebt Bdebt;t requity Bequity;t PTCt CFt 8760 h=yr
Incomet Intt Dept rincome tax Taxproperty;t Inst FOMt CAPwind 2
where
Bdebt;0 Covernight 1 AFUDC /debt
Bequity;0 Covernight 1 AFUDC /equity
Cwind;t rdebt Bdebt;t requity Bequity;t Incomet Intt Dept
rincome tax Taxproperty;t Inst FOMt CAPwind 3
where
Bdebt;0 Covernight 1 AFUDC /debt 1 ITC bITC
Bequity;0 Covernight 1 AFUDC /equity 1 ITC bITC
where rdebt is the interest rate on debt, Bdebt,t is the balance
of debt inyear t in $, requity is the nominal return on equity,
Bequity,t is the bal-ance of equity in $/MW, PTCt is the value of
the Production Tax Cred-it in $/MWh, CFt is the capacity factor of
the wind project in %, Incometis the project income in $/MW, Intt
is the interest paid in $/MW,Dept is the depreciation expense in
$/MW (with both evaluationsincluding bonus and accelerated
depreciation), rincome tax is the totalincome tax rate (with the
federal rate not paid on the value of statetax collections),
Taxproperty,t is the property tax in $/MW, Inst is thecost of
insurance in $/MW, FOMt is fixed operations and mainte-nance costs
in $/MW, CAPwind is the installed capacity of the windproject in
MW, Covernight are the overnight costs of the wind projectin $/MW,
AFUDC is the allowance for funds used during construc-tion in % of
overnight costs, /debt and /equity are the share of projectcosts
paid by debt and equity, ITC is value of the Investment Tax
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380 J.X. Johnson et al. / Applied Energy 124 (2014) 377388Credit
as a % of installed costs, and bITC is the share of installed
costseligible to receive the ITC.
Table 1 provides a summary of the assumptions used to deter-mine
the cost of wind.2.2.2. Calculating the revenue requirements for
transmissionThis study includes six AC transmission line voltage
classes:
115 kV, 230 kV, 345 kV, 345 kV double circuit, 500 kV, and765
kV. Table 2 provides a summary of the cost assumptions usedfor new
AC transmission by voltage class. It is recognized thattransmission
costs vary greatly from project to project. These costsare
representative of line paths dominated by non-mountainous,lowly
populated terrain. More challenging terrain would quicklyescalate
project costs, as is tested in the sensitivity analysis.Assumptions
for taxes, insurance, inflation, and the cost of capitalare
consistent with the assumptions used for wind, provided inTable
1Wind Assumptions.
Site A Site B Site C Site D
Cost assumptionsa
Overnight capital cost ($/kW) 2099 2099 2300 2521Fixed O&M
($/kW-yr) 27.2 27.2 29.8 32.7Variable O&M ($/MW h) Allowance
for funds during construction 3% 3% 3% 3%
Tax and insurance assumptionsb
State tax 5.0%Fed tax 35.0%Tax rate (exc. property tax)
38.3%Property tax 1.0%Insurance 1.0%
Cost of capital assumptionsc
Nominal return on equity 14.0%Percent equity 30.0%Interest rate
on debt 6.0%Life of debt 20Weighted average cost of capital
6.8%
Inflation assumptiond
Inflation (%/yr) 2.0%
Depreciation assumptionse
5-Year MACRS (% of installed cost) 45.0%20-YrMACRS (% of
installed cost) 2.5%No MACRS (% of installed cost) 2.5%Bonus
deprecitation (% of installed cost) 50.0%
Tax credit assumptionsf
Production tax credit ($/kW h) 0.022Investment tax credit (% of
installed cost) 30%Share of installed cost covered under ITC (%)
95%ITC Value that is depreciable (%) 50%
a Installed cost assumptions are based on Wind Technologies
Market Report,selected for each region [4]. All O&M costs are
treated as fixed costs (i.e., inde-pendent of generation levels)
and escalate at the rate of inflation. O&M costs do notinclude
property tax or insurance, which are included separately. Allowance
forfunds used during construction is consistent with construction
financing costs inTegan et al. [18].
b Tax and insurance rates are estimated. Property tax and
insurance costs escalateat the rate of inflation.
c The debt to equity ratio was estimated based on the amount of
secured debt for4000 MW of wind [4]. Debt rates under 6% are noted
in the same reference.
d Estimate.e Bonus depreciation was extended in American
Taxpayer Relief Act of 2012.
Accelerated (MACRS) depreciation is allowed under 26 USC
48(a)(3)(A). The shareof installed cost that is eligible for 5-year
depreciation (after bonus depreciation) isbased on Bolinger et al.
[19].
f Wind projects are eligible for either the federal production
tax credit (PTC) orthe investment tax credit (ITC). The PTC and ITC
were renewed in January 2013under the American Taxpayer Relief Act
of 2012. The share of installed costs thatqualify for the ITC is
from Bolinger et al. [19]. The Internal Revenue Service allowshalf
of the value of the ITC to be depreciable.Table 1. Straight line
depreciation was employed over a 30-yearhorizon and a 30-year life
of debt was assumed. Based on the costassumptions employed, the
annual revenue requirements fortransmission were determined
following a formula analogous toEq. (1).
2.2.3. Calculating the quantity of delivered windWe assessed AC
line power carrying capability using St. Clair
curves, a method developed to provide a universal approach
toquantifying limits of the load carrying ability of a transmission
line(loadability) for various line lengths and voltage classes
[23].Dunlop et al. subsequently developed the analytical basis for
theSt. Clair curve and expanded its use to higher voltages [24].
St. Claircurves represent the thermal, voltage, and stability
limits for trans-mission lines based on their surge impedance
loading (SIL) and arecommonly used for transmission planning.
Thermal limits deter-mine loadability below approximately 50 miles,
voltage limitsare binding between approximately 50 and 190 miles,
and stabilitylimits are binding for lines longer than approximately
190 miles. Inthis study, only lines longer than 50 miles were
examined. A 300mile line has a loadability of 1.0 SIL, regardless
of the voltage class.Loadability is calculated as the product of
the line loadability inper unit of SIL for a given distance and the
SIL for the relevantvoltage class (Table 3).
Similar to Newcomer and Apt [22], line losses were modeled
asresistive, varying by the electricity generated, conductor
resis-tance, line length, and voltage class, as shown in Eq.
(4):
Loss % Q r dV2
4
where Q is the wind production at a given time in MW, r is
theresistance in ohm/mile, d is the distance in miles, and V is
voltageclass of the line in kV. Assumptions for resistance are
provided inTable 3.
2.2.4. Minimizing the cost of delivered energyBased on the
assumptions and calculations for line loadability,
wind cost, wind shape, and transmission cost, the minimized
costof delivered wind (Cdelivered) is calculated using Eq. (5).
Cdelivered RRwind RRTXP52;560
t1 Qt h Xt 1 Lt5
where RRwind and RRTX are the annual revenue requirements
forwind and transmission in $, Q is wind production (MW), h is
time(hours), X is the energy lost to curtailment (MWh), and L
representsthe transmission loss rate (%), summed over all time
intervals t forthe year (there is 52,560 ten-minute time intervals
in a non-leapyear). The minimized delivered energy cost is bounded
by the max-imum installed wind capacity and solved using the
site-specific linedistance and wind shape, coupled with cost
assumptions providedin Tables 1 and 2. Delivered costs are
calculated for each of thesix voltage classes. The minimized cost
determines the lowest costcombination of wind capacity and voltage
class and represents thetarget value of a signed PPA with a load
serving entity. The effectiveintroduction of energy storage to the
wind-transmission systemshould result in lower delivered costs or
more wind delivered atthe same cost.
2.3. Determining the breakeven cost for energy storage
integrationinto wind-transmission system
For each scenario, we assessed the opportunity to introduce
en-ergy storage into the wind-transmission system for three
applica-tions: (1) mitigation of curtailment, (2) reduction of
transmissionvoltage class, and (3) increasing the wind installed
capacity. For
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Table 2Transmission cost assumptions.
115 kV 230 kV 345 kV 345 kV 2 circuit 500 kV 765 kV
Cost assumptionsLine ($000/mile)a 483 927 1298 2077 1854
3060Station ($M)b
Less than 300 miles 2.7 12 32 61 65 148300480 miles 2.7 14 38 71
79 175More than 480 miles 2.7 15 42 79 90 200
Allowance for funds during construction and overheadc 17.5%
17.5% 17.5% 17.5% 17.5% 17.5%Fixed O&M (% of installed cost)d
3% 3% 3% 3% 3% 3%
a Costs for 115 kV project based on project proposal estimates.
Transmission line costs for 230 kV, 345 kV, and 500 kV are based on
Black & Veatch analysis [20]. Costs for765 kV are based on
selected projects detailed in Mills et al. and escalated to current
dollars [21].
b Station costs are based on the same references in footnote a,
following the approach employed by Newcomer and Apt [22].c Based on
NREL review [18].d Estimate.
Table 3Transmission loadability and loss assumptions voltage
class.
115 kV 230 kV 345 kV 500 kV 765 kV
SILa MW per unit 35 140 420 1000 2280Resistanceb ohm/mi 0.24
0.07 0.048 0.024 0.012
a The surge impedance loading for each voltage class is
representative of typicalassumptions for 60-Hz overhead lines
[25].
b Line resistance can vary greatly within a voltage class. The
assumed values areconsistent with the weighted averages for U.S.
transmission lines by voltage class,as published in Kappenman
(2010) [26].
J.X. Johnson et al. / Applied Energy 124 (2014) 377388 381each
application in each scenario, the breakeven battery costs
weredetermined for a series of battery power ratings and battery
energyto power ratios.2.3.1. Batteries to mitigate curtailmentTo
determine the amount of curtailment that can be mitigated
and the value provided by energy storage, the following
approachis used:
Pcharge;t Qt CAPTX ;bounded by the requirements thatPcharge;t 6
Pbatt;t ; SOCt 6 1:00 6
where Pcharge,t is the charge rate for the battery at time t in
MW, Qt isthe wind output in MW, CAPTX is the transmission line
loadability inMW, Pbatt,t is the batterys rated power in MW at time
t, SOCt is thebatterys state of charge as a percentage of the total
storagecapacity.
Pdischarge;t CAPTX Qt ; bounded by the requirements
thatPdischarge;t 6 Pbatt;t ; SOCi P 0; Pdischarge;t Qt 6 CAPTX
7
where Pdischarge is the discharge rate for the battery in MW.The
initial state of charge, SOC0, is assumed to be 0.50 and the
roundtrip cycle efficiency, gt, is assumed to be 0.75 (but is
testedin the sensitivity analysis). The state of charge at a given
time isdetermined by:
SOCt1 SOCt Pcharge;t t gt Pdischarge;t t; such that0 6 SOCi1 6
1:00 8
The reduction in curtailment by the battery is assumed to be
thedifference in curtailment with and without the battery plus
anydifference between the initial and final state of charge. The
addi-tional energy delivered by reducing curtailment is assumed to
havethe same value as the cost-minimized delivered energy before
theintroduction of the battery. These additional revenues are used
todetermine the maximum cost of the battery, taking into accountthe
cycle life.The base case assumption for battery life is the
equivalent of2000 cycles and maintenance efforts eliminate battery
roundtripefficiency, storage capacity, and rated power degradation
over time,consistent with approaches employed in other studies
(e.g., [6]).While the design of this model is intended to represent
genericgrid-scale energy storage, these base case assumptions for
batterylife and degradation are more representative of compressed
air en-ergy storage or redox flow batteries with periodic cell
stack replace-ment [27]. With redox flow batteries, design can
minimizedegradation of electrode surface and the storage capacity
degrada-tion can be mitigated by using electrolytes with different
oxidationstates of the same element (e.g., vanadium) so that
crossover wouldnot irreversibly consume the electrolytes [28]. Such
assumptions ofmitigating storage capacity fade would not be
appropriate for tech-nologies such as lithium ion batteries. To
better understand the im-pacts of alternative battery technology
options, these assumptions(cycle life, roundtrip efficiency
degradation, and storage capacityfade) are tested in the
sensitivity analysis.
For each battery configuration, the annual number of cycles
isused to determine battery life, which is used to calculate
theannual carrying cost as a percentage of installed battery cost.
Amaximum lifetime of 20 years is assumed. Given that the
modelrepresents generic grid-scale energy storage, the number
ofcycles or maximum years in service determines the storage
life.Thus, the effect of usage patterns such as the rates and
durationsof charging and discharging are not directly included in
the model,but the sensitivities on cycle life and degradation can
inform howvarious usage patterns would impact the results of this
study.
The maximum cost of the battery is determined for a range
ofbattery designs, varying the battery power and energy storage
asfollows:
Range of Pbatt 0 to CAPwind CAPTX
Range of Storage Capacity Pbatt t; with range of t from10 min to
10 h
We assume that the ramp rate is not binding constraint.
Addi-tionally, the battery allows for full depth of discharge,
which is arealistic assumption for some energy storage technologies
(e.g.,vanadium redox flow batteries [6]). With technologies for
whicha lower depth of discharge should or must be used (e.g.,
sodiumsulfur batteries, for which EPRI assumes a 90% depth of
discharge[6]), the allowable cost targets for the energy storage
woulddecrease accordingly.
2.3.2. Batteries to reduce transmission voltage classIn addition
to reducing curtailment, batteries could be inte-
grated into a wind-transmission system to allow for the use of
alower, less expensive voltage class for the transmission. To
assess
-
Fig. 3. Wind curtailment and transmission loadability.
382 J.X. Johnson et al. / Applied Energy 124 (2014) 377388if
energy storage could be used to reduce the transmission
voltageclass, the cost minimized results determined in Section
2.2.4 areemployed. The installed wind capacity is applied to a
transmissionsystem with a lower voltage class, coupled with energy
storage.Only battery configurations that result in a lower
delivered costare viable options to reduce transmission voltage
class.
2.3.3. Batteries to increase wind installed transmission
capacityThe introduction of energy storage to support increasing
wind
capacity is also examined. Based on the results determined in
Sec-tion 2.2.4, additional wind capacity in added in 20 MW
increments.For each increment, battery configurations are tested to
determineif the additional wind could be incorporated within
increasing thedelivered energy costs.
2.4. Sensitivity analysis
A sensitivity analysis is conducted for Case A to determine
theimpact of key assumptions. Case A was selected because it
offeredthe most promising (i.e., highest) results to support
grid-scaleenergy storage.
2.4.1. Sensitivity to time-of-day pricingBase case assumptions
assume a flat PPA price for delivered
wind, irrespective of the time of day of generation. A time of
dayPPA scenario is conducted to determine the impact of
structuringa PPA with on-peak and off-peak pricing. As shown in
Eqs. (9)and (10), the off-peak PPA price (Cdel;off ) and on-peak
PPA price(Cdel;on) are calculated such that the average price
received matchesthe minimized cost of delivered energy
(Cdelivered), as described inSection 2.2.4, and the difference
between the off-peak and on-peakPPA price is equal to the
difference between the historical annualaverage off-peak and
on-peak locational marginal price at the pointof delivery (LMPoff;
LMPon).
Cdelivered X52;560
t1
Cdel;off Qt;off Cdel;on Qt;onQt;off Qt;on
9
Cdel;on Cdel;off LMPon LMPoff 10
On-peak hours are assumed to be between 8:00 am and 12:00am on
weekdays. The difference between on-peak and off-peakrates is
insufficient to support energy arbitrage with the assumedroundtrip
charging cycle losses. The approach to battery dischargemaximizes
revenues by optimally delaying discharge until on-peakhours,
assuming a perfect wind forecast is available.
2.4.2. Sensitivity to key parametersFor the base case scenario,
the sensitivity of the results to
curtailment reduction and maximum battery costs for
sevenassumptions were tested:
1. Wind installed cost was tested at 20% above and 20% belowbase
case assumptions. This yields a range of overnight capitalcosts
from $1,679/kW to $2,519/kW for Site A, which coversmuch of the
range of individual project costs detailed inWiser and Bolinger
(2012) [4].
2. Transmission installed cost was also tested. A sensitivity at
20%below base case assumptions was conducted to illustratepotential
economies of scale or lower commodity prices. A highsensitivity was
created that illustrates the impact of transmis-sion development
through more difficult terrain and more pop-ulated areas. Using the
same Black & Veatch source for data[20], the transmission costs
are assumed to increase by 28%over the base case based on the
following assumed terrain:25% hills, 20% suburban development, and
10% forested land.3. Given their significant value, the impact of
expiration of federalwind subsidies (i.e., the PTC and ITC) were
tested.
4. Battery cycle life was tested at 1000 cycles and 5000
cycles,intended to represent the impact of different usage
patternsand technology choices on the results.
5. Financing costs can vary considerably from year to year
and,given the large capital investments required for these
projects,can significantly influence the delivered costs of energy.
Sensi-tivities were tested at 20% above and below base case
financingcosts to provide context on the magnitude and direction of
theimpacts.
6. Because this analysis does not assume a specific technology
isproviding the energy storage, a base case assumption of 75%round
trip efficiency is assumed. Actual energy storage applica-tions can
achieve higher and lower results, so a sensitivityanalysis was
conducted to test the impact of 60% and 90% roundtrip
efficiencies.
7. Battery roundtrip efficiency degradation was tested with
2%and 5% roundtrip efficiency decreases per year.
8. Energy storage capacity fade was tested based on
assumptionsappropriate for two lithium-based batteries. Lithium
iron phos-phate batteries have been found to experience capacity
fade at arate of approximately 0.3% per 100 accumulated
dischargecycles under charging patterns typical for wind
generation,while lithium cobalt oxide-nickel manganese composite
batter-ies show capacity fade at a rate of 1.5% per 100
accumulateddischarge cycles [29]. A linear relationship between
capacityfade and accumulated discharge cycles is assumed, which
iswell reflected in the results of Krieger et al. (2013).
The sensitivity analysis was conducted by minimizing the
deliv-ered cost of energy without storage (as described in Section
2.2)using the new assumptions and then determining the
break-evencost of introducing energy storage (as described in
Section 2.3).These new assumptions will yield different wind
installed capaci-ties, transmission voltage classes, and break-even
storage costs,when compared to the base case.3. Results
3.1. Determining the power purchase agreement price
The shape of the wind duration curves, as shown in Fig. 2,
deter-mine the amount of wind curtailed for given transmission
loadabil-ities. Fig. 3 shows the relationship between wind
curtailment andthe ratio of wind installed capacity and
transmission loadability.While the differences between the
scenarios may appear modest,small differences in curtailment can
greatly affect the viability ofwind projects. Case B (Minnesota
wind) has a flatter generation
-
J.X. Johnson et al. / Applied Energy 124 (2014) 377388
383profile, resulting in lower curtailment rates than other sites
withlower capacity factors.
Fig. 4 shows the cost-minimized results for each of the
fourscenarios, with the left side charts showing all of the
voltageclasses that were examined and the right side charts showing
onlythe optimal voltage class for the transmission. Fig. 4a shows
thatCase A (Iowa wind) is optimized with 809 MW of wind on a500 kV
line, resulting in 6.5% curtailment, 46.4% effective capacityFig.
4. Minimized cost of delivered wind for (a and b) Site A Iowa wind;
(c and d) Sitewind. Left side graphs = all voltage classes; right
side graphs = only the optimal voltagefactor, and a PPA price for
delivered energy of $118.12/MW h.This case demonstrates the value
of allowing some curtailmentin order to achieve higher line
utilization on long or costly trans-mission lines. Fig. 4b shows
that increasing the wind capacityserves to increase the delivered
cost of wind due to curtailmentand, to a lesser extent, increasing
transmission loss rates, while itdecreases the unit cost of
transmission by more fully utilizingthe line.B Minnesota wind; (e
and f) Site C New York wind; and (g and h) Site D Maineclass for
transmission.
-
384 J.X. Johnson et al. / Applied Energy 124 (2014) 377388Fig.
4c and d show that Case B (Minnesota wind) is optimizedwith 861 MW
of wind on a 345 kV line, resulting in no curtailment,44.8%
effective capacity factor, and a PPA price for delivered energyof
$69.29/MW h. This case demonstrates the value of
eliminatingcurtailment for short transmission distances, where
transmissioncosts area a smaller share of total costs. As shown in
Fig. 4e and4f, Case C (New York wind) is optimized with 700 MW of
windon a 500 kV line, resulting in no curtailment, 41.9% effective
capac-ity factor, and a PPA price for delivered energy of
$118.45/MW h.This case demonstrates that building a higher voltage
line evenwhen there is insufficient wind for maximum loadability
can stillproduce the most cost effective outcome. Fig. 4g and h
show CaseD (Maine wind) is optimized with 492 MW of wind on a 345
kVline, resulting in 1.7% curtailment, 33.4% effective capacity
factor,and a PPA price for delivered energy of $146.77/MW h. This
casedemonstrates that some curtailment may be optimal even
withlower wind quality (as compared to Case A).
These results set the target prices for the delivered cost of
en-ergy, representative of a PPA. The introduction of energy
storageto each of these systems should either increase
deliverability ofwind at the same cost or decrease delivered energy
costs.
3.2. Assessing batteries to mitigate wind curtailment
Of the four sites examined, the optimized
wind-transmissionsystems for only Sites A and D resulted in wind
curtailment.Optimized Site A (Iowa wind) resulted in 235,000 MW h
of windcurtailment per year before incorporating energy storage,
whileSite D (Maine wind) resulted in 26,500 MWh of wind
curtailmentbefore storage. Based on the PPA prices identified in
Section 3.1,this represents lost revenues of $28 million and $3.9
million peryear, respectively. Fig. 5 shows the reduction in
curtailment foreach of these sites upon introduction of energy
storage as a func-tion of energy storage power rating and storage
capacity.
The width of the charts in Fig. 5 show that battery power
ratingswere examined up to the difference between wind capacity
andtransmission loadability (129 MW for Case A, 30 MW for Case
D).Energy storage capacities were examined from 10 min to 10
h.Generally, a relative increase in energy storage capacity
resultedin greater mitigation of curtailment than a comparably
scaledincrease in battery power. It is important to note that
largestbatteries examined (i.e., ones with 100% of needed power
outputand 10 h of storage) still did not eliminate all of the wind
curtail-ment. For Case A, 55% of the curtailment was eliminated,
whilefor Case D, 61% was eliminated using this battery
configuration.
The results of the curtailment reduction were used to
calculatethe maximum battery cost, based on the assumption that the
addi-tional energy would receive the same PPA price and the
batteryslifetime would be 2000 cycles (up to 20 years). Fig. 6
shows theseresults in both cost per rated power ($/kW) and cost per
unit ofFig. 5. Annual reduction in wind curtailment with batteries
of varying power and storagand 100% of curtailment equals 235,000
MW h) and (b) Site D Maine wind (where 10energy storage ($/MW h).
The maximum cost can be determinedusing either convention; the
results are not intended to be additive.
As shown in Fig. 6a, batteries for curtailment at Site A could
beviable with installed costs as high as $603/kW if backed with
tenhours of storage at maximum power, $366/kW with four hoursof
storage, or $132/kW with one hour of storage. With a lowerpower
rating, the maximum battery costs increase to values ashigh as
$780/kW. Assessing the installed cost as a function of stor-age
capacity (Fig. 6b) shows that with small amounts of storage,the
installed cost can be as high as $180,000/MWh of storage. Withone
hour of storage, costs are viable up to $149,000/MWh of stor-age,
dropping to $77,000/MW h with ten hours of storage. (Notethat the
axis for Fig. 6b and d are reversed to allow for
easierviewing.)
For Site D, battery costs to support curtailment reduction can
beup to $353/kW with ten hours of storage at maximum power rat-ing,
$244/kW with four hours of storage, and $108/kW with onehour of
storage (Fig. 6c). As a function of storage capacity, costsup to
$172,000/MW h of storage can be supported for batterieswith
ten-minutes of storage capacity, dropping to $43,000/MW hfor
batteries with ten hours of storage capacity.3.3. Assessing
batteries to reduce transmission voltage class
For three of the scenarios (A, B, and D), dropping to the
nextlower voltage class while maintaining wind installed
capacitywould represent a major increase in the delivered cost of
wind,as much as 100% over the optimized cost. These large
increasesin installed costs are driven primarily by reduced line
loadability,resulting in significant increases curtailment and
reductions inthe amount of delivered electricity. For Site C (NY),
dropping from500 kV to 345 kV transmission, before introducing
energy storage,increases the delivered cost of wind by 21%. This
smaller increase isbecause the cost minimized system with the 500
kV line had sig-nificant excess transmission capacity and dropping
to the lowervoltage line would cause a more modest amount of
curtailment.Therefore, Site C was examined to test the viability of
introducingenergy storage to reduce voltage class.
Even for very large batteries (289 MW with 2890 MW h of stor-age
capacity), the ability of the battery to flatten the wind shapewas
insufficient to decrease the delivered cost of wind on the345 kV
system below the costs found using 500 kV line. This sug-gests
that, for the scenarios examined, batteries at no cost wouldstill
not be beneficial for use to decrease voltage class. These
sce-narios do not paint a comprehensive picture given that more
trans-mission design alternatives could be examined, but suggest
thatusing batteries for this purpose may only be appropriate in
veryspecific situations. In addition, building transmission with
lowerloadability reduces the potential for greater use in the
future.e capacity for (a) Site A Iowa wind (where 100% of battery
power equals 129 MW0% of battery power equals 30 MW and 100% of
curtailment equals 26,500 MW h).
-
Fig. 6. Maximum installed battery cost for Site A Iowa wind (a)
per power rating and (b) per energy storage capacity (where 100% of
battery power equals 129 MW); and forSite D Maine wind (c) per
power rating and (d) per energy storage capacity (where 100% of
battery power equals 30 MW).
J.X. Johnson et al. / Applied Energy 124 (2014) 377388 3853.4.
Assessing batteries to increase wind installed capacity
Coupling additional wind (beyond the optimized level) with
en-ergy storage can produce economically viable results. Fig. 7
showsthe maximum cost of energy storage to incorporate more
windwith one hour of energy storage capacity for Sites A and D,
andten hours of energy storage capacity for Sites A, B, and D.
(Site Bdid not produce positive results with one hour of storage.
Basedon the available developable wind resource assumptions
provideddescribed in Section 2.1, Site C had developed all
available wind.)When integrating additional wind, the maximum cost
of energystorage is lower than the costs that can be supported for
curtail-ment reduction.
3.5. Sensitivities
A sensitivity analysis was conducted to test the results of
max-imum battery costs for curtailment reduction at Site A with
tenhours of energy storage capacity on a 10 MW battery. Site A
wasselected for the sensitivity analysis because the base case
resultsfor this site proved to be the most promising for energy
storage,allowing for more expensive energy storage options than the
othersites that were examined. Base case assumptions yielded a
maxi-mum battery cost of $778/kW, and as shown in Fig. 8, the
sensitiv-ities selected result in a range of maximum battery costs
from$403/kW to $915/kW.
The elimination of wind subsidies (i.e., the production
taxcredit, investment tax credit, and accelerated depreciation)
greatlyreduces the maximum acceptable battery cost. Without
thesubsidies, the cost of wind increases and, in an
optimizedwind-transmission system, less wind is built in order to
reducecurtailment and achieve the lowest delivered energy cost.
Thus,the potential for curtailment reduction via energy storage
isreduced and the maximum battery cost decreases by 48%.
With subsidies in place, the sensitivity to the installed cost
ofwind was tested. An increase in wind costs of 20% resulted in a2%
increase in the maximum battery cost, while a 20% decreasein the
installed cost of wind resulted in a 9% reduction in maxi-mum
battery cost. The results were more sensitive to transmissioncosts,
with a 28% increase in transmission costs increasing themaximum
battery cost by 18%, while a 20% decrease in transmis-sion costs
yielded a maximum battery cost 18% lower.
Increasing the financing costs for all investments (wind,
trans-mission, and battery) by 20% increased the maximum battery
costsby 9%. A decrease in financing costs of 20% reduced
maximumbattery costs by 9%.
The base case assumed no battery efficiency degradation
overtime. Assuming 2% degradation of roundtrip cycle efficiency
peryear reduces the maximum battery cost by 10%, while a
5%degradation reduces maximum battery cost by 23%. The base
caseround trip efficiency was 75%. Decreasing that to 60% dropped
themaximum battery cost by 10%, while increasing the round
tripefficiency increased the maximum battery cost by 7%. The
impactof improving (or decreasing) the batterys efficiency is
dampenedby the fact that the curtailed wind generation could not
be, bydefinition, sold elsewhere and thus has no direct cost
associatedwith its use. It is expected that energy storage which
purchasesmarket energy to charge would be more sensitive to battery
degra-dation and roundtrip cycle efficiency.
The effect of capacity fade was more modest. Using assump-tions
appropriate for lithium iron phosphate batteries, which expe-rience
only slight capacity fade, the maximum battery cost isreduced by
only 2%. Under assumptions for lithium cobalt oxide-nickel
manganese composite batteries, the maximum battery costis reduced
by 5%.
-
Fig. 7. Maximum installed battery cost for increased wind
capacity at Site A Iowa wind with one hour of storage (a and b);
ten hours of storage (c and d); at Site B with tenhours of storage
(e and f); at Site D with one hour of storage (g and h); ten hours
of storage (i and j).
386 J.X. Johnson et al. / Applied Energy 124 (2014) 377388
-
Fig. 8. Results of sensitivity analysis for Site A (Iowa wind)
with 10 MW battery and100 MW h of energy storage capacity. When low
and high sensitivities are tested,the results of the first
assumption listed are shown in blue (decrease in maximumcosts),
while the results from the second assumption are shown in gray
(increase inmaximum costs). (For interpretation of the references
to colors in this figure legend,the reader is referred to the web
version of this paper.)
J.X. Johnson et al. / Applied Energy 124 (2014) 377388 387A PPA
with on-peak and off-peak pricing was examined for SiteA. Due to
its point of delivery, the on-peak to off-peak energy
pricedifference was based on the hourly locational marginal price
forthe ComEd zone in PJM [30]. Based on 2012 data, average
on-peakprices were $9.69/MW h higher than average off-peak prices.
A PPAfor Site A that reflects this difference would offer
$122.89/MW hfor delivered on-peak wind and $113.20/MW h for
off-peak windin order to meet the revenue requirements for the wind
andtransmission. Given a round trip battery efficiency of 75%,
thisdifference is insufficient to justify time of day arbitrage
(i.e., timeshifting to on-peak hours). Because the annual wind
resource isnearly evenly divided between on-peak and off-peak
generation,and the battery discharge is divided between on-peak and
off-peakhours, the introduction of a time of day PPA has minimal
impact onthe maximum battery price. A discharge strategy in which
abattery maximizes revenues by optimally delaying the dischargeof
some energy to on-peak hours, assuming perfect wind
forecast,results in a trivial (0.1%) increase in revenues. This
suggests thatthe need to incorporate wind forecasting errors is
unnecessaryfor this analysis.4. Discussion
This analysis found that energy storage can be used to
improvethe deliverability of transmission-constrained wind if
ambitiouscost targets for energy storage are met. In instances
where theoptimal wind-transmission system results in some wind
curtail-ment, it was found that energy storage could be
incorporated to re-duce curtailment at costs as high as $780/kW.
Not surprisingly,higher delivered costs can support more expensive
energy storage.Energy storage can also be introduced to facilitate
the incorporationof additional wind, beyond the optimized installed
capacity, but of-ten with lower energy storage cost targets. As the
overbuild of windincreases, it becomes more difficult to cost
effectively incorporateenergy storage. The results were most
sensitive to the eliminationof wind subsidies, the installed cost
of transmission, battery effi-ciency degradation, and battery cycle
life. In the cases examined,energy storage was not a viable option
to decrease transmissionvoltage class (and thus decrease
transmission installed costs).
Researchers at Pacific Northwest National Labs summarizedcurrent
capital costs for battery options [7]. Converting their re-sults to
a system with ten hours of energy storage capacity, therange of
costs in 2011 is $2600$4900/kW for sodium sulfurbatteries,
$880$1170/kW for CAES, and $2700$3900/kW for re-dox flow batteries.
The studys potential costs in 2020 would dropthese values to
$1800$3300/kW, $530$1170/kW, and $1500$2700/kW, respectively. With
the exception of CAES, none of thesevalues would be low enough for
use with transmission-constrainedwind based on this studys
results.
The PNNL findings are largely consistent with a 2010 EPRI
studywhich evaluated electricity energy storage applications,
costs, andbenefits, with current costs totaling $1,000/kW for CAES
with 8 h ofstorage, $1,440$3700/kW for redox batteries (spanning
severaltechnologies), and $31003300/kW for sodium sulfur
batteries[6]. The study examined ten key applications, including
Renew-ables Integration which provides time shifting, load, and
ancillaryservices for grid integration. The present value target
benefits fortransmission congestion relief were calculated as
$368/kW, withhigh benefits reaching $1838/kW. The target and high
benefitsfor renewable energy integration are $311/kW and
$1555/kW,respectively.
Sandia National Laboratories identified eight potentially
attrac-tive value propositions for grid-scale energy storage, which
in-cluded renewables energy time-shift plus electric energy
time-shift [8]. Based on a ten year battery life cycle, renewables
energytime shift was demonstrated to have a benefit between
$233/kWand $389/kW, with a potential across the U.S. of 37 GW. This
valueis based on the time of day of energy prices and not due to
trans-mission-constrained curtailment.
Based on current and near-term projections for the cost of
en-ergy storage, current batteries are too costly to support
curtailmentreduction or increased deliverability of
transmission-constrainedwind. CAES may present the best opportunity
to economicallyserve this role, but is constrained to
geographically-appropriatesites. Viability for energy storage for
these applications can beachieved through reductions in the
installed costs, as well as otherhigh impact efforts such as
increasing the cycle life, decreasing oreliminating degradation of
performance, and improving roundtripcycle efficiency. This is
generally consistent with Hittinger et al.findings that capital
costs are consistently important, with effi-ciency and length of
capital investment also be important for somestorage technologies
[31].
Energy storage options must not only compete with these
costtargets, but must also be more cost effective than other,
non-stor-age options. Flexible, dispatchable generation at the wind
site canbe used to better integrate wind and fully utilize
transmissioncapacity. Increasing transmission loadability with new
lines, sub-stations, or series capacitors are other potential
alternatives to en-ergy storage. Increasing the diversity of the
wind resource couldflatten the wind output and reduce costs, even
in excess of thecost of any additional transmission.
This study relied on a PPA-based structure for the cost of
deliv-ered energy, representative of roughly three-quarters of the
windin the U.S., while other studies (e.g., [9]) have used
wholesale elec-tricity prices. PPA prices for wind energy typically
exceed marketenergy rates, but because of state-level renewable
portfolio stan-dards which mandate the development of renewables,
such ratesare paid by load serving entities to meet these
obligations. Struc-turing the analysis in this way, as opposed to
using market energyprices, captures the full cost of the wind and
the value of therenewable attributes.
Future work that could augment the findings of this study
in-clude expanding to other applications for energy storage,
increasingthe number of transmission line designs considered, and
testing theimpact of wind diversity on the need and value of energy
storage.
Acknowledgements
This work was supported by the U.S. National Science
Founda-tions Sustainable Energy Pathways program (Grant
#1230236:Non-Aqueous Redox Flow Battery Chemistries for
SustainableEnergy Storage).
-
388 J.X. Johnson et al. / Applied Energy 124 (2014)
377388Appendix A. Definition of variablesWeighted average cost of
capital % rWACC
Wind revenue requirement $ RRwind
Annual cost of wind project $ Cwind
Interest rate on debt % rdebt
Balance of debt $/MW Bdebt
Return on equity % requity
Balance of equity $/MW Bequity
Value of Production Tax Credit $/MW h PTC
Capacity factor % CF
Project income $/MW-yr Income
Interest paid $/MW-yr Int
Depreciation expense $/MW-yr Dep
Total federal and state income
tax rate
% rincome taxProperty tax cost $/MW-yr Taxproperty
Insurance cost $/MW-yr Ins
Fixed operations and
maintenance costs
$/MW-yr FOMInstalled wind capacity MW CAPwind
Overnight costs of wind project $/MW Covernight
Allowance for funds used during
construction
% AFUDCShare of project costs debt % adebt
Share of project costs equity % aequity
Value of Investment Tax Credit % ITC
Share of installed costs eligible
for ITC
% bITCSIL MW perunitSILResistance Ohm/mile r
Loss % L
Wind production MW Q
Distance Miles d
Voltage class kV V
Delivered cost $/MW h Cdelivered
Delivered cost, off-peak hours $/MW h Cdel,off
Delivered cost, on-peak hours $/MW h Cdel,on
Locational marginal price at
delivery, off-peak hours
$/MW h LMPoffLocational marginal price atdelivery, on-peak
hours$/MW h LMPonTransmission revenuerequirement$ RRTXCurtailment
MWh X
Battery charge rate MW Pcharge
Transmission line loadability MW CAPTX
Battery rated power MW Pbatt
State of charge % SOC
Battery discharge rate MW Pdischarge
Roundtrip cycle efficiency % g
Battery installed cost $/kW Cbattery,power$/MW-h
Cbattery,storageReferences
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Assessment of energy storage for transmission-constrained wind1
Introduction1.1 Delivering wind1.2 Grid-scale energy storage for
wind1.3 Objectives
2 Methods2.1 Scenario description2.2 Determining the power
purchase agreement price by cost-minimizing a wind-transmission
system2.2.1 Calculating the revenue requirements for wind2.2.2
Calculating the revenue requirements for transmission2.2.3
Calculating the quantity of delivered wind2.2.4 Minimizing the cost
of delivered energy
2.3 Determining the breakeven cost for energy storage
integration into wind-transmission system2.3.1 Batteries to
mitigate curtailment2.3.2 Batteries to reduce transmission voltage
class2.3.3 Batteries to increase wind installed transmission
capacity
2.4 Sensitivity analysis2.4.1 Sensitivity to time-of-day
pricing2.4.2 Sensitivity to key parameters
3 Results3.1 Determining the power purchase agreement price3.2
Assessing batteries to mitigate wind curtailment3.3 Assessing
batteries to reduce transmission voltage class3.4 Assessing
batteries to increase wind installed capacity3.5 Sensitivities
4 DiscussionAcknowledgementsAppendix A Definition of
variablesReferences