Public Service of Colorado sees no need for energy storage right now

The Public Service Co. of Colorado unit of Xcel Energy (NYSE: XEL) isn’t recommending the use at this point of electric storage systems, even though it is adding more variable-output renewable energy to its system.

In approving the utility’s portfolio of preferred resources identified in its 2013 All-Source Solicitation, the Public Utilities Commission of Colorado directed Public Service to investigate potential storage options for its electric system and present its findings back to the commission. Based on the commission’s order, the company said in its Dec. 8 report that it understood the directive as one to examine the cost-effective application of currently-available electrical storage technologies to help integrate higher levels of intermittent generation resources, like renewables.

The company took as a benchmark for cost-effectiveness its current practices to integrate about 2,250 MW of wind and 275 MW of solar. At current solar penetration rates, the company has not needed to develop any specific measures to integrate solar generation. Storage devices can perform a variety of beneficial electric system functions. Given the study scope, the company examined the system benefits consistent with those reliability issues created by intermittent generation resources.

This included evaluating:

  • Energy Arbitrage;
  • Electric Generation Capacity;
  • Voltage Support;
  • Wind Curtailment Reductions; and
  • Net-Load Ramping.

“The economic analysis indicates that currently-available, green-field storage devices are not a cost-effective means to address reliability issues caused by intermittent generation,” said the report. “The Company also does not believe that it has reached the limits of its flexible resources and does not believe that such concerns should limit the acquisition of additional intermittent generation at this time or in the near-term.”

The report added: “The Company found the Commission’s directive useful in targeting the study scope. The beneficial applications of electricity storage devices in the generation, transmission, and/or distribution of electricity are numerous and varied. As an example, the existence of the Company’s 324 MW Cabin Creek pumped hydro storage facility has been beneficial in the Company’s ability to reliably integrate over 2,000 MW of intermittent wind generation resources on its system. Actual and claimed beneficial applications of individual storage technologies can often be overstated due to the inability of a specific device to perform multiple functions simultaneously. Barriers to simultaneous value capture from a particular storage device include the physical location of the device on a utility’s system along with the device’s physical limitations (e.g., limitations on charge and discharge rates and limited storage volumes).

“Based on indicative costs of currently-available storage technologies, the Company does not believe additional energy storage from new, green field projects is likely to be cost-effective for our customers. This sentiment is consistent with our findings in the 2013 All-Source Solicitation. However, the Company fully anticipates that if forecasted reductions in bulk energy storage costs are achieved, electricity storage devices may constitute a growing portion of the tools it has available to safely and efficiently operate its electrical system in the future. Currently, the Company does not believe that it has reached the limits of its flexible resources to cost effectively integrate additional intermittent generation.”

The company’s preferred portfolio resulting from the 2013 All-Source Solicitation included an additional 449 MW of wind and 170 MW of solar. Of these additional resources, one 199 MW wind farm is operational. The remaining 250 MW of wind and the 170 MW of solar are expected to be fully operational no later than the summer of 2016. 

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.