IEEE Electrification - December 2021 - 40
key findings from that work were that
utilities are relatively uncertain about
energy storage costs (as evidenced by
wide ranges in cost assumptions) and
that utilities that analyzed more energy
storage services were more likely to
select storage in their preferred portfolio
(Cooke et al. 2019).
This article builds on that report
by identifying the specific ways in
which leading utilities are adapting
their planning processes and tools
to overcome these barriers and
more accurately account for the
many unique benefits of energy
storage. While the utilities represented
in this report are not the
only ones that have taken such
steps, they were chosen based on
the transparency of how their practices were communicated
in their IRPs and the measurable impacts of
the changes made, with the goal of capturing and
communicating the diversity of practices that have
been developed.
As Figure 1 illustrates, IRP processes are long and
complex. Because of this, there is significant optionality
in both the type and timing of improvements that
may be applied. By identifying a range of adaptive
The primary tool that
many utilities use to
identify grid
investments-the
integrated resource
plan-was not
designed to consider
the unique
characteristics of
energy storage.
tools and procedures that have
been deployed by utilities as well as
their relative complexity, this work
may be of use to utilities, regulators,
and other IRP stakeholders
interested in improving the representation
of energy storage in utility
resource planning.
Northern Indiana Public Service
Company
After Northern Indiana Public Service
Company (NIPSCO) filed its 2016 IRP,
stakeholders questioned the lack of
transparency in the utility's cost
assumptions for new resource
options, which were obtained from
proprietary sources and kept confidential.
In response, NIPSCO began
its 2018 IRP process by issuing a request for proposals
(RFP) to solicit current information on costs and performance
characteristics for various resources. NIPSCO
received 90 proposals, which were aggregated and
supplemented with publicly available cost databases
to maintain confidentiality while allowing for public
disclosure.
Market
Forecast
Resource
Assumptions
Load
Forecast
NIPSCO initiated the process by studying cost assumptions
for various resource options in seven publicly available
reports. For a 4-h lithium-ion
battery, this study identified an
average assumed cost of US$2,110/
kW, but the assumptions ranged
from about US$1,300 to US$3,100/
kW. Solar plus storage hybrid costs
were not identified in the initial
study.
Scenario
Identification
(Scenario 1,
Scenario 2,
Scenario n)
Capacity Expansion
Portfolio Identification
Production Cost Modeling
Risk Assessment and Portfolio
Comparison
Preferred
Portfolio
Selection
Inputs
Figure 1. The IRP process.
40
IEEE Electrification Magazine / DECEMBER 2021
Modeling
Outcome
The RFP elicited nine bids for
standalone energy storage and 10 bids
for solar plus storage. Aggregated,
the average bid for solar plus
storage projects was US$1,183/kW,
and the average bid for standalone
storage was US$1,349/kW. Using
these cost assumptions, NIPSCO
selected 92 MW of solar plus storage
by 2023 in its preferred portfolio.
(NIPSCO's 2018 IRP is available
at https://www.nipsco.com/docs/
librariesprovider11/rates-and
-tariffs/irp/2018-nipsco-irp.pdf?
sfvrsn=16.)
Operating an RFP can be an
expensive and time-consuming
process for utilities. Since NIPSCO
only used the results of this RFP for
informational purposes, some of
https://www.nipsco.com/docs/librariesprovider11/rates-and-tariffs/irp/2018-nipsco-irp.pdf?sfvrsn=16
https://www.nipsco.com/docs/librariesprovider11/rates-and-tariffs/irp/2018-nipsco-irp.pdf?sfvrsn=16
https://www.nipsco.com/docs/librariesprovider11/rates-and-tariffs/irp/2018-nipsco-irp.pdf?sfvrsn=16
https://www.nipsco.com/docs/librariesprovider11/rates-and-tariffs/irp/2018-nipsco-irp.pdf?sfvrsn=16
IEEE Electrification - December 2021
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