Utility-scale photovoltaics with battery energy storage systems (PVS): a value driven techno-economic assessment for new capacity additions in U.S. electricity markets
Date
2020
Authors
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Journal ISSN
Volume Title
Publisher
University of Delaware
Abstract
The objective of this research is to assess the techno-economic feasibility of utility-scale PV paired with battery energy storage systems (collectively referred as PVS) across three major electricity markets in the US; California, New York, and Texas. The metric to determine the feasibility is called “Net Value Ratio” (NVR) developed by the United States Energy Information Administration (EIA). A modified version of this metric is used to test the viability of PVS systems and compare it to existing status quo; Combine Cycle Gas Power Plants (CCGT). The study traverses across different policy and cost scenarios over a 20-year temporal scale from 2020 to 2040 and notes the changes in NVR value to determine and inform policymakers and regulators about the value of hybrid resources like PVS. Three case studies portraying essential value streams of PVS in different grid applications are also studied, with results published in peer-reviewed journals. ☐ In 2017, emissions of carbon dioxide (CO2) by the U.S. electric power sector were 1,744 million metric tons, or about 34% of the total U.S. energy-related CO2 emissions of 5,140 million metric tons (U.S. Energy Information Administration, 2018). This study portrays the value of sizeable environmental emissions which can be displaced by delivering carbon-free energy from PVS mostly during periods of peak demand when emission-heavy generators like simple-cycle and combined-cycle gas turbine power plants operate with high capacity factors. This avoided cost of emissions (ACE) is discussed in detail. ☐ The feasibility of renewable energy systems has been previously addressed through use of overarching techno-economic assessment metrics such as levelized cost of electricity (LCOE) which have informed decision making for policymakers, energy planners and utilities to evaluate the overall technical capabilities and costs associated with the generation technology. This dissertation attempts to analyze the techno-economic feasibility of PVS using a holistic metric which utilizes both the cost aspect i.e., LCOE and the combined value that the system can provide i.e., levelized avoided cost of energy (LACE) to form the Net Value Ratio (NVR) metric. To highlight the values of PVS, three cases studies portray the practical application of PVS and standalone BESS in the current electric grid in the United States. ☐ The study reflects that the variability of electricity generation from utility-scale PV power plants can be complemented by grid-scale BESS in a myriad of applications including energy time-shifting, providing firm capacity during peak demand periods, deferring capital investment in the transmission & distribution (T&D) sector and avoiding emissions from fossil fuels. Consequently, for evaluating the NVR for PVS, temporal and policy scenarios are developed to accommodate various underlying drivers such as capital costs, policy incentives, electricity market prices for three major potential deployment locations; CAISO, NYISO and ERCOT markets representing the states of California, New York and Texas. The temporal range is from present day 2020 to 2040. ☐ To provide a reasonable barometer of PVS’ performance, comparisons are conducted with combined cycle gas power plants (CCGT) from 2020 to 2040 with reasonable assumptions regarding its operational and financial characteristics. The study shows that PVS, compared to CCGT power plant, can provide Net Value Ratio (NVR) of greater than unity in both Business as Usual (BAU) and Environmentally Conscious (EC) scenarios especially in California and Texas. New York still shows favourability towards CCGT due to lower solar resources but with capital cost reductions in PV and BESS systems in the future, the economics may change. LACE is the summation of values originating from PVS systems in terms of their energy, capacity, and environmental value, and is thus different in each location. California and Texas reflect a much higher level of solar resources than New York. Another factor which sets them apart is the misalignment of electric demand and supply delivered by PVS. California and Texas, on the other hand, have dispatch curves which are more aligned, and thus show higher values of LACE and a higher Net Value Ratio. ☐ The study concludes with a sensitivity analysis showing the change in the NVR metric with varying trajectories of the cost and policy drivers analyzed previously. The cost drivers included in the sensitivity analysis study the effects of capital costs, natural gas fuel prices and the effect of the potential sunset of Federal ITC on the NVR. Price volatility in the market prices have also been discussed extensively for the sensitivity analysis. Finally, the policy trajectory for the US is discussed in detail to highlight the inherent shortcomings which need to be addressed for growth in PVS deployment.
Description
Keywords
Battery storage, Net value ratio, Renewable energy policy, Solar photovoltaics, Techno-economic analysis, Utility-scale