IEEE Electrification - December 2021 - 42

the licensing and implementation of new commercial
modeling software.
In its 2021 IRP, the first completed since Washington's
Clean Energy Transition Act mandated that electric
utilities be carbon neutral by 2030 and achieve zero
emissions by 2045, PSE's preferred portfolio includes
450 MW of distribution system-connected energy storage
by 2045 and 375 MW of renewable plus storage hybrid
plants. (PSE's 2021 IRP is available at https://oohpseirp
.blob.core.windows.net/media/Default/Reports/2021/
Final/IRP21_Chapter%20Book%20Compressed
_033021.pdf.)
TABLE 1. CAISO average hourly ancillary service
prices, 2020.
Hour
Ending
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Regulation
Down (US$)
6.88
5.19
5.93
4.98
5.30
4.96
6.31
10.00
14.18
14.65
16.57
17.61
16.64
17.12
15.85
11.75
10.48
7.91
5.93
5.42
5.64
4.73
6.00
6.70
Regulation
Up (US$)
5.22
3.98
3.79
3.65
3.75
4.64
9.15
7.52
6.61
5.94
6.66
7.44
6.65
7.92
8.78
8.93
12.04
22.74
35.06
29.90
13.52
8.74
6.41
5.87
Spinning Reserve
(US$)
1.90
1.47
1.29
1.17
1.33
2.27
5.12
2.94
1.52
1.19
1.12
1.37
1.57
2.03
2.69
3.82
7.50
18.64
31.39
26.37
9.96
5.09
3.07
2.03
Hour's most valuable service
Hour's second-most valuable service
Hour's third-most valuable service
Hour's least-valuable service
42
IEEE Electrification Magazine / DECEMBER 2021
Nonspinning
Reserve (US$)
0.10
0.12
0.11
0.11
0.11
0.12
0.13
0.12
0.14
0.13
0.11
0.11
0.13
0.17
0.51
1.06
2.66
11.09
23.66
16.98
4.10
1.43
0.39
0.12
California Public Utilities Commission
The IRP process in California is unique, as it is performed
on a statewide basis, and state regulators-who
normally review and respond to utility IRPs-instead
actively lead the process. Every two years, the California
Public Utilities Commission (CPUC) designates a 10-year
emissions target for the energy sector (subject to legislatively
established guidelines) and then prepares a Reference
System Plan (RSP) to identify the statewide
energy portfolio necessary to achieve the emissions
goal. Each of the state's load-serving entities is then
required to develop a conforming IRP that identifies its
obligations under the RSP and its plan for satisfying
them.
Like other IRP processes, the RSP employs a
capacity expansion model, Renewable Integration
Solutions (RESOLVE), and a production cost model,
the Strategic Energy and Risk Valuation Model
(SERVM). For its second biennial cycle in 2019-2020,
the CPUC applied two enhancements that improved
the RSP's ability to value energy storage: modeling
improvements for SERVM and an energy storage
potential study to inform RESOLVE about how much
energy storage could feasibly be deployed in
the state.
In the first enhancement, the CPUC expanded the
services that SERVM allowed storage to provide from
regulation and frequency response to add spinning
and nonspinning reserves. As noted in our previous
work, as the number of services that storage provides
in a model increases, resource plans are more
likely to identify cost-effective energy storage investments
(Cooke et al. 2019). Table 1 presents the average
hourly value of various ancillary services in the
California Independent System Operator (CAISO)
during 2020.
Ancillary service markets are shallow relative to
capacity and energy markets (Chen et al. 2017).
Therefore, while the new services reflected in
SERVM model (spinning and nonspinning reserve)
are generally lower in value than the regulation services
that were already in the model, their inclusion
increases revenue opportunities and market size for
energy storage. Storage that would not have found
room in regulation markets could instead provide
spinning and nonspinning reserves, which for several
hours each day are higher-value services.
In the second enhancement, the CPUC commissioned
a study to identify the upper bound of energy
storage that could help meet the state's future needs.
When energy storage is used as a capacity resource
for reducing peak needs, as peaks become flatter,
incremental storage investments must have longer
durations to reduce the remaining peak. Figure 2
illustrates this point, using example load data for an
evening in spring 2019 from CAISO.

https://oohpseirp.blob.core.windows.net/media/Default/Reports/2021/Final/IRP21_Chapter%20Book%20Compressed_033021.pdf https://oohpseirp.blob.core.windows.net/media/Default/Reports/2021/Final/IRP21_Chapter%20Book%20Compressed_033021.pdf https://oohpseirp.blob.core.windows.net/media/Default/Reports/2021/Final/IRP21_Chapter%20Book%20Compressed_033021.pdf https://oohpseirp.blob.core.windows.net/media/Default/Reports/2021/Final/IRP21_Chapter%20Book%20Compressed_033021.pdf

IEEE Electrification - December 2021

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