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Regulatory
Developments
and Impacts
Involving Electricity
Storage in Texas
Elizabeth Drews
31st USAEE/IAEE North American Conference
Austin TX, November 4-7, 2012
1
The usual disclaimers
• This is not legal advice or
legal services
• This is no one’s opinion but
mine, & might not stay mine
• This is a summary
• Laws & facts change
2
Why storage could especially benefit ERCOT
ERCOT’s
• Electrical isolation from other
grids
• > 11,000 MW wind (# 1 in US,
# 6 in world, > 2,000 MW
coastal) 12,277 MW by 2014
• Growing demand
• Potential capacity shortfalls
• Nodal market design
3
Where would storage fit in ERCOT?
Capacity, Demand, Reserves Report (May 2012)
4
Generation under study in ERCOT *
Peak demand
68,379 MW
Wind record
8,368 MW
(17.64% of
47,452 MW
load) of which
7,381 noncoastal
Fuel type
Gas
Cancelled Suspended Active
studies
studies
studies
(MW)
(MW)
(MW)
1,939
Nuclear
2,890
8,317
5,900
Coal
3,635
Wind +
394
1,092
1,560
Solar
236
353
856
50
100
Biomass
Storage
Other
Total
906
700
7,400
1,480
21,747
* No firm commitment to build
+ Calculated at 8.7% of nameplate capacity
16,854
5
Some IPP storage development in Texas
Compressed Air Energy
Storage
Apex: 275 MW
Battery
AES: 40 MW
Chamisa: 270 MW,
expandable to 810 MW
Xtreme/Duke: 36 MW, behind
meter w/ wind
ConocoPhillips: behind
meter w/ wind or solar
Source: filings in Public Utility Commission of Texas
(PUCT) Projects 39764, 39917, 41026
6
Some uses of electricity storage
• Energy time-shift
• Peak shave
• Ancillary services
• Reliable power in outage
• Address voltage, frequency variations
• Transmission support
• ↓ transmission congestion
• Defer T&D upgrades
Adapted from PUCT 2011 Scope of Competition Report
7
Generalized attributes of storage technologies
CAES
Battery
Can inject for hours-days Can inject ≤ hour
Can respond to grid
needs in minutes
Hundreds of MW
Can respond to grid
needs in seconds
Tens of MW, modular
$ hundreds of millions
2 years to build
Must be near
cavern or
similar, TX has
$ 1-10 million
1 year to build
Attributes/capabilities vary
by project & technologies
are evolving
8
Regulatory limits on uses of ERCOT storage
In non-retail choice
areas, utility, coop,
muni can own G&T
• Can own storage
that serves both
functions
In retail choice areas, utility
owns T&D, power generation
company owns generation
• Protects competition
• Keeps storage from
supplying & being paid for all
its uses
9
Storage as transmission
PUCT Docket 35994, ETT
• Transmission/distribution utility owns 4 MW battery
to help voltage & delay transmission in remote area,
does not own or sell energy from the battery
• PUC: transmission asset, can put in rate base
• Operational since 2010
10
Storage as generation
2011 statute (SB 943) – Texas storage:
• Intended to sell energy or ancillary services at
wholesale is generation
• May interconnect, obtain transmission service, sell
electric energy & ancillary services at wholesale
consistent w/ TX law re: power generation company
or EWG
• Must register as power
generation company
11
PUCT pricing rule on storage
(2012, Project 39917) 3 main decisions
• Electricity purchases by storage
for charging are wholesale, not
retail (same as FERC)
• Such electricity purchases are
settled nodally (at bus that
connects the storage facility), not
zonally like a load
• Retail transmission & ancillary
service charges do not apply to
such electricity purchases
12
ERCOT rule changes, integration issues
ERCOT’s Emerging Technologies
Working Group
IDs & proposes changes to ERCOT
requirements that preclude market
participation of emerging technologies
• Has addressed # issues relating to
storage
• Is developing a list of operations issues
relating to storage
13
PUCT ERCOT pilot project rule
(2012, Project 40150)
Allows ERCOT pilot projects for storage/other ET
• ERCOT may temporarily exempt pilot participants
from specific ERCOT requirements
• ERCOT board must approve pilot project; board
decision appealable to PUCT
• Rule leaves many issues, e.g. cost allocation &
post-pilot transition if any, to ERCOT pilot review
process to resolve
14
Pilot projects at ERCOT
• ERCOT posts documents for
each pilot project on its website
• ERCOT has been working on
a pilot project for a Fast
Responding Regulation Service
(similar to FERC Order 755,
“pay for performance”)
15