September 24, 2013

Flexible Peaking Resource

Executive Summary

Many types of electricity storage are well-suited to provide what is often referred to as “peaking” electric supply resources. Peaking resources are an important element of utilities’ portfolio of electric supply resources that are used to serve peak demand for electricity. The operational role for peaking resources (generation and demand-side) during a day with high peak demand is depicted graphically in Figure 1 below. (Figure 1 depicts a typical electric resources “stack.”) 

As shown in Figure 1, peakers are the last power plants to be turned on and the last to be called upon (dispatched) to provide power during times when peak demand occurs. 

Typically, peak demand occurs during what is sometimes called “on-peak” hours, times when electricity use and price are highest. In most regions, annual peak demand occurs during summer afternoon hours for durations ranging from four to six hours (e.g., Noon to 6:00 pm). A key driver of peak demand that occurs during hot summer days is air conditioning (cooling). 

Perhaps not surprisingly, a generation plant that is used to serve peak demand is often referred to as a peaker. For most situations, peakers are simple cycle combustion turbine (CT) generation. CTs are mature, familiar and responsive. However, CT peaker plants tend to have relatively low fuel efficiency, and they tend to have relatively high air emissions (per kWh of energy generated), especially when operated at part load. Other common generation-related means to address peak demand include: a) reciprocating engines, especially diesel generators (gen-sets), b) less responsive natural gas fired steam generation plants, c) hydroelectric generation, d) photovoltaics (PV) and e) solar thermal generation. 

Three “demand-side” alternatives to peakers exist. They reduce electric demand during on-peak times which reduces the need for peakers. First are electricity end-user energy efficiency measures that reduce peak demand coincidentally. Second is demand response (DR) which involves direct control of electricity using equipment – by the grid system operator, with the end-user’s consent – such that electric power draw is reduced. Third, utilities are using increasingly rich pricing mechanisms for energy and/or power that are used during peak demand periods. Pricing involves high or very price for electric energy and/or power during peak demand periods. 

Discussion

Electricity storage is a compelling alternative to peakers and to demand-side approaches to manage peak demand. Indeed, there is a significant amount of utility-owned pumped hydroelectric storage capacity installed that is used extensively as peaking resources. 

Although storage may have a higher up-front cost than peakers or demand-side alternatives,storage is a very responsive and flexible peaking resource that can provide more utility and benefits. So, despite storage’s relatively high up-front cost, additional benefits are likely to accrue – relative to use of peakers or demand-side approaches – such that the overall net benefit from the storage exceeds the net benefit from alternatives. 

Some important advantages of storage – used to serve peak demand – include the following: 

Storage can serve a broader array of applications than peakers or demand-side approaches.

Most storage types tend to startup much faster than peakers and their output can be varied – ramping – much more rapidly than peakers’ output, so storage is a significantly more flexible alternative. 

Because most storage peaker charging occurs at night, storage used as peaking resources increases utilization of cleaner, more efficient “baseload” generation and will increase utilization of transmission capacity and, depending on the location, it may also increase utilization of distribution capacity (“increased asset utilization”). 

There are no direct emissions from storage and most storage types produce limited or noise so it may be easier to site than generation-based peakers. 

Some storage types are modular and thus can be deployed and operated in distributed mode, where they are most effective and/or most valuable. If it is also transportable, modular storage can be redeployed in other locations, as conditions and needs evolve and to so its benefits can be optimized. 

Depending on 1) the type of generation equipment and/or fuel used to generate energy that is stored and 2) the type of peaking resource displaced by storage peakers, fuel use and/or air emissions may be reduced (per kWh delivered to end-users). 

There are two versions of storage peakers: 1) bulk/central facilities comprised of one large plant at sites that tend to be somewhat or very remote from load centers and 2) modular/distributed storage located near or within load centers. Bulk/central peakers are most likely to involve pumped hydroelectric and compressed air energy storage (CAES), though many modular storage units could be co-located at a central site and operated as one resource. 

Modular/distributed storage peakers could be installed at or near loads if locational benefits or other advantages related to distributed deployment are significant.The primary benefit is related to the reduced need for generation equipment. An important incremental benefit is the value of electric energy time-shift. Several other circumstance-specific benefits could also accrue. Storage used as a peaker during peak demand periods could also provide ancillary services during times when demand is lower. 

Net fuel use and/or emissions associated with storage peakers may be comparable or perhaps even lower than those for CT peakers. That is because the stored energy is likely to be from relatively efficient generation with relatively low or no air emissions (e.g., high efficiency natural gas fueled “combined cycle” power plants or nuclear power plants) and/or from wind generation or baseload renewable generation such as geothermal and biomass. 

Distributed peakers could be comprised of a combination of storage, dispatchable distributed generation and demand response. They could be operated individually or they may be aggregated into composite “power blocks.” 

If the storage flexible peaker capacity is sited near electricity end-users – in distributed locations – it could provide potentially significant benefits related to: a) transmission congestion relief, b) T&D upgrade deferral or life extension, c) local voltage support and power factor correction and d) improved electric service reliability or power quality. If the distributed peaker is modular and/or transportable, then the value may be somewhat higher yet.

Conclusions and Observations

Peakers are a critical, but expensive, element of the electrical grid. Electricity storage is quite well-suited to service as a flexible peaking resource. Advantages are numerous. Generation is freed up to provide service for which it is designed: generation of electricity at the plants’ full rated output (power), at a constant rate. That optimizes production cost, fuel use, air emissions and maintenance cost. Storage is more responsive than generation-based peakers. The ability to both “absorb” and discharge energy adds to storage’s flexibility. Storage used for peaking could be used for ancillary services during thousands of hours per year.


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