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Energy Storage can increase the life of conventional units

Conventional fossil units have the most operational data on their outage statistics due to their long history. With the advent of wholesale energy and capacity markets, industry thought there is an added incentive for those units to keep up maintenance, resulting in lower outage rates. But the reverse is true. There is an increase in outages for conventional units due to market conditions increasing the starts and stops of these large fossil units. Leading to a possible emerging solution in integrating energy storage with a conventional unit.

Since energy storage units are flexible, they can reduce the conventional unit starts and stops leading to less wear and tear and better outage statistics. An increase in availability hours means better capacity value for older units. This storage value-stack benefit can help the storage industry not only integrate more storage on the grid but also provide a business case for financing a structural database to collect all energy storage unit statistics.

NERC GADS data

Since 1982, North American Electric Reliability Corporation (NERC) started collecting generation outage statistics for all fuel types, with the data reported in 100-MW increments. For example, a 550-MW coal unit is in the 500-599 MW class. In this database called Generating Availability Data System (GADS), conventional units greater than 20 MW must provide outage data.

With more renewable generation on the grid, slowly but steadily, renewable units are making their way into the NERC database. Wind units greater than 75 MW are required to submit outage statistics to NERC. NERC is still framing rules for solar GADS data. Demand-side resources have their database called Demand Response Availability Data System (DADS), and Transmission Availability Data System (TADS) captures transmission equipment outage data.

MISO GADS data

Midcontinent Independent System Operator (MISO) started collecting GADS data as part of the resource adequacy efforts in 2006, after the market startup. In each of the organized markets, conventional thinking indicated market revenue serves as an incentive for maintaining the units. But recent data indicates otherwise.

In the data cited for calculating the planning reserve margin for 2020, MISO showed more than three-quarters of a percentage point impact due to resource mix and performance changes. Units in Michigan and Louisiana are the worst offenders.

This unit performance data has real implications in the capacity market, as seen from MISO’s almost three percent increase in reserve margin in the past seven years (2013-2020). And this increase in reserve margin due to higher outage rates is happening at the same time renewable resources have ramped up. For instance, MISO had 13,000 MW of wind interconnected in 2013. But in 2020, MISO has more than 25,000 MW of wind, with additional 3,000 MW solar interconnected at the transmission level.

Increased need for flexible resources

Increased renewable penetration is part of the reason for driving the market need towards cycling units. This repeated cycling of conventional units in MISO data shown in Resource Availability & Need (RAN) white paper. Coal unit retirements and higher age for conventional units are also contributing to higher reserve margins.

Energy Storage can reduce cycling

Since energy storage devices can respond in minutes and some cases seconds to variations in frequency, they can reduce the need for conventional units to respond to grid balancing needs. Renewables make the bulk of new generator interconnections in ISO queues. Hybrid interconnections are popular, with solar and storage interconnection requests at the same Point of Interconnection (POI). But hybrid does not have to be renewable source plus storage alone. Hybrid interconnections can be storage plus conventional units.

The Energy Storage Association (ESA) recommended MISO address the need to discuss the 4-hour capacity requirement for storage, given the RAN framework is looking into all the hours and energy planning instead of capacity planning related initiatives. Additionally, the compression of loss of load probabilities into fewer hours illustrates how storage could provide more value to the market by offering its full energy capability in a shorter time frame than four hours in the not all that distant future.

NERC GADS for Energy Storage

With energy storage units increasing at both behind the meter and in front of the meter, there is a need for an outage statistical database that shows availability hours for different kinds of energy storage batteries, including various chemistries. These availability hours help calculate the effective forced outage rate by class type, which ties into the capacity value for storage and other conventional units in the market. The key question could be, what would be the “outside management control” equivalent of a frozen coal pile for an energy storage unit? Lack of transmission availability to charge?

Since storage is a generation, transmission, and distribution asset – it remains to be seen if NERC GADS/TADS/DADS or a separate data system is needed to collect energy storage availability hours.

Next Steps

MISO Loss of Load Expectation (LOLE) study that model’s outage statistics for units releases its next reserve margin target in early November 2020 for the upcoming planning year. It is unknown how much of an impact the outage data is having on the next years’ capacity procurements.