Energy Storage Requirements for Achieving 50% Solar Photovoltaic Energy Penetration in California

NOTICE This report was prepared as an account of work sponsored by an agency of the United States government. Neither the United States government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States government or any agency thereof. Acknowledgements The authors would like to thank Elaine Hale and Brady Stoll for assistance processing and interpreting the demand response data. We also thank the following individuals for knowledgeable input and critical reviews: Executive Summary The rapidly declining cost of solar photovoltaic (PV) technology in combination with renewable portfolio standards is driving increased PV deployment in California. However, the variability of the solar resource creates uncertainty about the amount of PV that could be deployed without enabling technologies such as energy storage. A key limiting factor for PV deployment is curtailment, or the PV energy that would need to be rejected by system operators due to the supply/demand balance of the system. Most published analyses of high PV penetration in California to date have focused on PV penetration levels up to about 20%–25% on an annual energy basis. In this paper, we go beyond previous analyses by exploring PV penetration levels of up to 50% in California (with renewable penetration over 66%), and we examine the potential role of storage. Specifically, we examine the amount of storage that may be required to keep PV curtailment to acceptable levels. The amount of curtailment that is acceptable will depend on many factors, and for this analysis, we aim for a target level of curtailment that will keep the incremental cost of additional PV below the estimated variable cost of a combined-cycle generator in 2030, or about seven cents per kilowatt-hour (kWh). An analysis of the role of storage must consider the evolution of the grid and the likely deployment of various flexibility options. Before evaluating storage, we first consider the …