Brattle: Nevada could cost-effectively deploy 1 GW of energy storage by 2030

Dive Brief:

Up to 175 MW of utility-scale battery storage could be deployed cost effectively in Nevada by 2020, according to a study released Wednesday by the Brattle Group.
By 2030, cost-effective battery storage deployment potential could range from 700 MW to more than 1,000 MW, depending on the pace of declines in battery costs and changing market conditions, the authors found.
The study also found that behind-the-meter commercial and industrial battery storage could add 70 MW to the total by 2030, if Nevada adopts incentives for it.

Dive Insight:

Nevada is revamping the planning process for its utilities, and the state’s Public Utilities Commission (PUC) is considering establishing an energy storage target.

The Brattle report is part of those wider efforts. It was prepared for the PUC and the Nevada Governor’s Office of Energy.

State legislation passed in 2017, SB 204, requires the PUC to determine whether or not it is in the public interest to establish biennial targets for energy storage procurement. The Brattle report is designed to inform the PUC in making its evaluation on setting an energy storage target and at what level targets should be set to be economically beneficial.

The Brattle analysts looked at four broad categories of potential value streams in assessing the cost effectiveness of battery storage systems. All the systems were assumed to use lithium-ion batteries with a four-hour duration.

The revenue categories are avoided generating capacity investments, production cost savings such as supplying energy and ancillary services and avoiding renewable energy curtailment, the deferral of transmission and distribution investments, and avoided distribution-system customer outages.

Use of batteries to mitigate distribution system outages could account for 20% to 40% of total benefits, the report found.

All of Brattle’s estimates of energy storage uptake are dependent on continuing battery costs declines. In the report, Brattle used high and low ranges for battery costs. The analysts assume total installed costs for a storage facility in 2020 will be between $1,200/kW and $1,800/kW and drop at an annual rate of about 3%, yielding costs of $876/kW to $1,314/kW in 2030.

Beyond the storage cost estimates, Nevada could soon see a broader shift in its energy policy. In November, voters will have the chance to vote on two ballot initiatives.

One would introduce retail choice in the state and end the monopoly franchise enjoyed by NV Energy. The utility issued a proposal to double renewable energy capacity in the state if voters reject the initiative. The second initiative determines whether electric utilities would be required to source 50% of their electricity from renewable resources by 2030.

Meanwhile, the Brattle report also found that as the amount of storage on the system increases, the incremental value of new storage additions decreases. The decline occurs because the need for ancillary services will be fulfilled, opportunities to defer T&D upgrades in congested locations of the system will be addressed, and peaks on the load curve will flatten, reducing available incremental benefits.

Those factors lead to a first mover advantage should Nevada adopt an energy storage target, Brattle said.