Municipal Light Dept Battery Analysis

Our Municipal LIght Dept is an aggregate power purchaser and reseller to the community.  The ISO New England levies forward capacity and monthly transmission charges on the LIght Department based on peak demand windows each year(capacity) and month(transmission). Battery deployments should be able to peak shave our aggregate demand during those windows to reduce those charges.  How can SAM model these savings in a standalone battery managed by the Light Department.

Hi Dean,

The Standalone Battery / Single Owner configuration is designed to model a battery connected directly to the grid that is installed, owned, and operated by a single entity that purchases power to charge the battery at a fixed price or time-varying prices defined on the Electricity Purchases input page and sells the power discharged by the battery at a PPA price or at time series market prices defined on the Revenue page. The battery dispatch defined on the Battery Dispatch page can be set manually to charge and discharge according to a schedule, or the model can automatically dispatch the battery in response to the power prices on the Revenue page.

The project finances are from the project owner's perspective, so metrics like the net present value and internal rate of return represent the value of the system to the project owner. The model does not have information about the grid load.

For your scenario, I think you could use the manual dispatch option to charge and discharge the battery based on the ISO's schedule of charges. You could then experiment with different battery sizes and dispatch schedules to see how the cost of the battery (including replacements) compares to the benefit of the charge reduction.

Best regards,
Paul.

Hi Paul, 
thank you for the guidance. I had been using the Merchant Plant case, which seems quite similar to the single user, but also provided an interface to the Cambium energy market estimates of future pricing, so I didn’t have to build that series from scratch. 

I think, in the end, simple use of a battery for arbitrage with high cycle rates is difficult to justify on the economics. Our Light Department anticipates the big financial benefit will come from reducing peak demands for energy from the ISO during the ISO’s highest demand hours, resulting in reduced assessments for wider grid infrastructure. These reductions depend on predicting grid demand levels, dispatching strategically, and require using a probabilistic model assigning a likelihood of success with the strategy each month. 

All of this falls outside of what SAM can model, but represents the lion’s share of the value to our Light Department. We will proceed with spreadsheets for these externalities, importing relevant outputs from SAM where appropriate. I am including a few links to a study project conducted in 2016 and implemented in 2018 for a sister light department in Sterling MA. This highlights the economic value of strategic peak shaving within our ISO-NE environment. 
Pre-project analysis
sandia.gov/ess-ssl/docs/journals/SterlingMA_2017PES_SAND2017-1093.pdf
1year operational results
www.cesa.org/wp-content/uploads/Sterling-case-study.pdf
Thank you for your help. 
Best,
Dean

Hi Dean,

If I understand your modeling application correctly, you may be able to represent this using the Commercial financial model where the "electric load" represents customer purchases from the ISO, and the sell rate on the Utility Rates page represents the rates charged to customers. You could then use time-of-use demand rates (and/or energy buy rates) to represent the cost of assessments for grid infrastructure.

Best regards,
Paul.