The Value of Distributed Electricity Storage in Texas: Proposed Policy for Enabling Grid-Integrated Storage Investments

Posted: November 10, 2014 - 11:15 / ERCOT / Reports

A report released today by Brattle economists finds that the deployment of grid-integrated distributed electricity storage in Texas could provide substantial net benefits to the power system in ERCOT and its electricity customers. The report, commissioned by Oncor Electric Delivery Company, a Transmission and Distribution Service Provider (TDSP) in Texas, evaluates whether storage could be cost-effectively deployed from the perspectives of retail customers, wholesale electricity market participants, and the combined system or “society as a whole” while maintaining wholesale power prices that continue to support necessary generation investments.

The Brattle report estimates that 3,000 to 5,000 MW of grid-integrated, distributed electricity storage would be the most cost-effective from an ERCOT system-wide societal perspective based on a forecast of installed cost of storage of approximately $350/kWh. The authors identify four components of storage value from a system-wide perspective to estimate net benefits, including avoided distribution outages, deferred transmission and distribution (T&D) investment, avoided new generation or demand-side capacity investments, and electricity production cost savings. From an electricity customer’s perspective, deploying storage across ERCOT would decrease customer bills slightly and additionally provide significant reliability benefits in the form of reduced power outages for customers located in areas where storage is installed.