Energy Storage

Report sees economic potential for Nevada energy storage

Nevada could cost-effectively install 175 megawatts of utility-scale energy storage by 2020 and at least 700 MW a decade later, according to a report prepared for state utility regulators.

“Energy storage can be a cost-effective addition to Nevada’s future mix of electricity resources, reducing system costs and benefitting consumers as a result,” the Brattle Group said in a report prepared for the Nevada PUC.

The PUC is considering setting energy storage targets as required by S.B. 204, a bill signed into law in June 2017.

States with energy storage targets include California, Massachusetts and Oregon. New Jersey in May adopted a 2,000 MW-by-2030 goal and New York has a goal of 1,500 MW by 2025.

Brattle said energy storage can provide value from various uses, including for resource adequacy, renewables integration, and transmission and distribution investment deferral.

Ultimately, the economically optimal levels of storage deployment will depend mostly on energy storage cost declines and the amount of new generating resources added in the state, according to Brattle.

Brattle’s analysis was based on four key energy storage benefits: avoided distribution outages, delayed T&D investments, production cost savings and avoided capacity investments.

The analysis is based on lithium-ion batteries with 4-hour storage capacity. Brattle Group assumes the batteries will cost $1,200 a kilowatt to $1,800/kW in 2020. The consulting firm assumes the prices will fall by 3 percent a year to $876/kW to $1,314/kW in 2030.

“A statewide deployment of up to 175 MW of utility-scale storage could be cost-effective in 2020 if storage costs are at the lower end of the expected cost range,” Brattle said. “By 2030, declining battery costs and evolving system conditions increase this estimate of cost-effective potential to at least 700 MW and possibly exceeding 1,000 MW at the high end.”

Brattle also found that Nevada could deploy up to 7 MW of behind-the-meter storage by 2020 and 31 MW by 2030.

The value of storage for Nevada would fall if NV Energy started participating in a regional power market because of lower production cost savings driven by increased resource diversification across a larger footprint, according to the report.

One of the study’s key findings is that there is “significant” uncertainty in energy storage costs, according to Brattle. “Consequently, to the extent that future procurement targets are established, it may be desirable to design the targets in a way that accounts for this cost uncertainty,” the consulting firm said.

Storage procurement targets could, for example, be expressed as an “optimal deployment curve” that defines procurement levels as a function of cost, Brattle said, noting the same design is used in capacity markets.

The PUC is taking comments on the Brattle report, which is available here, until Oct. 31.