H2Tech - Q3 2021 - 35

HYDROGEN STORAGE
in FIG. 2. Pricing data is a strong indicator of the value of storage,
since prices reflect, in real time, the mismatch of supply
and demand with the price the market is willing to pay to balance
the mismatch. This area has substantial renewable power
generation (both solar and wind), hydroelectric and gas-fired
generation, and installed battery capacity, so it provides insight
as to how longer-duration storage can create value.
The lowest-priced power is in the daylight hours, where
high PV solar output dampens pricing. There are two price
peaks: evening (1700-2100 hr) and morning (0600-0700 hr).
Battery storage is effective in time-shifting surplus daytime
power to evening peaks. Batteries generally start discharging at
1800 hr and have a 4-hr discharge cycle. The 25% drop in power
price at 2100 hr is a result of falling demand and continued
discharge of batteries to the grid. The morning peak occurs in
the early daylight hours just prior to and during sunrise, when
PV solar capacity is still ramping up and battery resources are
limited in output due to the prior evening discharge.
Weekly time-shifting. An hourly bar graph is shown in
FIG. 3 for 1 wk of the annual average $LMP/MWhr for the
same price node from 2400 hr Friday through 2400 hr the
following Friday (e.g., the weekend hours are hours ending
1-48). The daily pattern repeats (solid arrows), with the lowest
prices during the daylight hours, an evening peak lasting 3
hr-4 hr, prices falling in the final evening hour, and an early
morning peak where demand increases while PV solar capacity
is still ramping up.
The notable difference in the weekly profile is that the lowest
prices are Saturday and Sunday afternoon, and the duration
of the " trough " on weekends is 8 hr-11 hr vs. 4 hr-8 hr on
weekdays. The day-to-evening peak spread during the week is
15%-20% higher than the daily spread on the weekend. Consequently,
the highest-value storage technology shifts power
2018
1,600
1,400
1,500
1,300
1,200
1,100
1,000
900
800
700
600
500
400
300
200
100
-100
8,760
Hour from 2400 hr on December 31, 2018
FIG. 4. Locational marginal power prices for 2018-2020.
H2Tech | Q3 2021 35
17,520
26,280
JFMAMJ J AS OND
74 hr (+/-) from Sunday afternoon (hours 33-40) to Wednesday
evening (hours 114-116) (dashed arrows), or longer.
Seasonality. As in the natural gas markets, seasonal weather
also significantly impacts the price of electrical power
(FIG. 4). Summer pricing volatility is driven by the longer solar
day, air conditioning load, and late-summer (August-September)
extreme heat events lasting 3 d-6 d. Winter peaks (mostly
in February) are driven by extended-duration (6 d-8 d),
cold weather events combined with shorter solar days. Volatile
weather conditions during the " shoulder " months (April-
June and October-November) can result in negative power
pricing demand, which is less predictable and which makes
scheduling resources by the system operator less reliable.
FIG. 4 shows 3 yr of price data in southern California. In
2018, both winter (February-March) and summer (July-August)
weather-driven peak pricing (e.g., prices are 10 times the
daily mean) events occurred. In 2019, both summer and winter
conditions were mild. In 2020, no winter events occurred,
and no significant price volatility was seen from December
2019-May 2020; however, five multi-day summer events with
peak prices over $300/MWhr were recorded. Note the concurrence
of negative power prices in August 2019 with peak
prices of $700/MWhr and the frequency of negative pricing
from December 2019-early March 2020.
Short-duration storage (< 8 hr discharge) can mitigate
many of the short-duration (< 8 hr) events, but it cannot mitigate
multi-day events. The highest prices (FIG. 5) are seen during
multi-day weather events where the limitations of battery
storage result in unmet demand.
Winter events. Hourly power prices for two winter weather
events in February 2019 are shown in FIG. 6. Event 1 starts
at hour 120 and lasts until hour 264, and Event 2 starts at hour
403 and lasts until hour 513. Peak prices are up to 3.5 times
2019
2020
$/MWhr
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