IEEE Electrification - December 2021 - 41

the costs associated with conducting
in-depth review of proposals were
likely avoided. The risk of this
approach is that proposal development
is costly and time consuming,
and project developers may not
respond if they believe that the RFP
will only be used for informational
purposes. Some utilities avoid that
issue by using less complex request
for information solicitations to
obtain cost estimates.
For each run,
PLEXOS identifies
the cost savings for
the portfolio that the
flexible asset
Public Service Company of
New Mexico
In its 2020 IRP, Public Service Company
of New Mexico (PNM) indicated
that, like most utilities, it assumes that limited amounts
of capacity may be procured through bilateral agreements
with other utilities as needed to maintain reliability.
But when resource adequacy challenges affected the
Western Interconnect in August 2020, and PNM experienced
an outage at a large thermal generator, the utility
was unable to procure replacement capacity through
bilateral trades. After reducing the amount of reserve
capacity that it assumed it could procure on the market,
PNM studied its energy needs and determined that
maintaining reliability would require the utility to
increase its planning reserve margin-the amount of
excess capacity that the utility procures to meet ancillary
services and serve as backup-from 13 to 18%.
Coupled with this analysis, PNM also conducted an
effective load-carrying capability (ELCC) analysis to quantify
the ability of energy storage technologies to contribute
to meeting the increased planning reserve margin.
The ELCC is a well-established analytical approach that
measures how nondispatchable resources, like wind and
solar, and energy-limited resources, like energy storage,
contribute to maintaining reliability within a given service
territory, based on its load and generation mix.
PNM's ELCC study determined that the first 300 MW
of storage on its system (PNM had no utility-scale storage
at the time) would have an ELCC of 95.7%, while the
next 150 MW would have an ELCC of 92.5%, and the following
200 MW would have an ELCC of 84.5%. ELCC values
would fall more precipitously in subsequent
increments. With these analyses informing its modeling,
PNM's preferred portfolio selected 300 MW of storage by
2022 and, depending on whether new gas generation is
authorized by regulators, an additional 223 to 507 MW by
2025. (PNM's 2020 IRP is available at https://www
.pnmforwardtogether.com/assets/uploads/PNM
-2020-IRP-FULL-PLAN-NEW-COVER.pdf.)
PNM's reassessment of its planning reserve margin
needs and the ELCC analysis of storage's ability to fulfill
those needs are moderately complex and costly.
creates by reducing
generation from
higher-cost
resources.
While the work requires sophisticated
analysis of a utility's system,
it can be done in house by planning
staff.
Puget Sound Energy
In response to direction from state
regulators to improve its modeling
of energy storage, Puget Sound
Energy (PSE) developed a new
" Operational Flexibility " analysis in
its 2017 IRP, which creates a hybrid
between traditional, hourly planning
models and emerging, subhourly
planning models.
In PSE's Operational Flexibility
framework, the utility conducts an
initial analysis using its in-house, hourly capacity
expansion model, the Portfolio Screening Model III
(PSM III). PSE then performed a production cost
model for each portfolio using PLEXOS, commercially
available planning software that is capable of subhourly
resource dispatch.
In PLEXOS, PSE runs each portfolio nine times, each
time adding a different flexible resource with welldefined
intrahour flexibility and constraints. In addition
to various configurations of batteries and pumped storage
hydro (PSH), these analyses considered gas-fired
options, such as a combined cycle turbine, a peaker, and a
reciprocating engine. For each run, PLEXOS identifies the
cost savings for the portfolio that the flexible asset creates
by reducing generation from higher-cost resources.
Once PSE has determined the flexibility benefit for those
resources, it then reruns the PSM III capacity expansion
model with flexibility values added to applicable resource
options, allowing the model to reoptimize the portfolio
based on a more accurate accounting of each resource's
system value.
The application of this framework had a clear
impact on PSE's preferred portfolio. Most of the initial
scenarios that PSE studied did not identify a need for
energy storage until they added 50-75 MW by 2037,
but after the Operational Flexibility analysis was
applied, PSE's preferred portfolio accelerated that need
to 50 MW of storage by 2023 and 75 MW by 2027. (PSE's
2017 IRP is available at https://pse-irp.participate.online/
past-IRPs/2017.)
PSE's hybrid approach significantly increased the representation
of storage and other flexible resources. While
the approach is not as thorough as others presented here,
in that it optimizes a given portfolio to be more flexible
rather than building a flexible portfolio from the ground
up, its modular nature allowed PSE to develop and implement
it in a single planning cycle without disrupting the
utility's existing IRP process. The approach is more
impactful from a cost perspective, however, as it requires
IEEE Electrification Magazine / DECEMBER 2021
41
https://pse-irp.participate.online/past-IRPs/2017 https://pse-irp.participate.online/past-IRPs/2017 https://www.pnmforwardtogether.com/assets/uploads/PNM-2020-IRP-FULL-PLAN-NEW-COVER.pdf https://www.pnmforwardtogether.com/assets/uploads/PNM-2020-IRP-FULL-PLAN-NEW-COVER.pdf https://www.pnmforwardtogether.com/assets/uploads/PNM-2020-IRP-FULL-PLAN-NEW-COVER.pdf
IEEE Electrification - December 2021

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