Cost-Benefit Analysis of Additional Energy Storage Procurement

California has ambitious goals for reducing and eliminating greenhouse gas emissions from the State’s electricity system as a cornerstone of efforts to decarbonize the State’s economy more broadly. Electricity decarbonization efforts are codified by Senate Bill (SB) 100 which seeks to have 100% of retail sales of electricity by the year 2045 provided by eligible zero-carbon resources with an interim target of 60% of retail sales of electricity provided by eligible renewable resources by the year 2030. This policy contributes to a broader goal of achieving economy-wide carbon neutrality in the State by 2045, codified by Executive Order B-55-18.Planning studies were undertaken to determine how California should proceed in terms of electricity generation and storage resource rollout to meet these goals, such as the Senate Bill 100 Joint Agency Report [1], which highlights the need for rapid renewable resource and energy storage buildout. Energy storage is typically selected as utility-scale lithium-ion batteries for short-duration storage and pumped hydropower energy storage for long-duration energy storage functions, primarily due to their relatively low cost for the former and technological maturity for the latter. Since the capacity expansion models used for such planning studies focus on minimizing cost, the recommended course from these studies focuses on lithium-ion and pumped hydropower energy storage connected as utility energy storage.In practice, however, energy storage deployment will not be dictated by a central plan. Energy storage is being deployed to serve different priorities. Behind-the-meter energy storage may be deployed by individual residential, commercial, and industrial customers to serve their specific needs, provide electricity savings, and enable higher uptake of local renewable resources. Energy storage may also be installed at wind or solar farms to enable these to act as more dispatchable resources for the electric grid and enable them to provide electricity to the grid when they would otherwise not be generating. Additionally, other energy storage technologies such as flow batteries and hydrogen energy storage are emerging as potential alternatives to lithium-ion batteries and pumped hydropower, each with its own advantages and disadvantages in terms of technical, economic, and practical (i.e. safety, recyclability, etc...) characteristics.Energy storage is a critical enabler of plans for complying with Senate Bill 100 and broader economy-wide decarbonization goals. Therefore, it is critical to understand the effect of alternative configurations for energy storage deployment on the broader electricity system’s ability to rely on zero-carbon electricity for meeting load, how well it can use available renewable electricity generation, and the system-wide cost of electricity.Therefore, the goal of this project is to provide information on the preferred configuration of energy storage technologies for supporting a decarbonized California electric grid by investigating alternative configurations for the buildout of energy storage to meet California’s electricity decarbonization goals and comparing them to the configuration suggested by Senate Bill 100 planning studies