REopt Helps San Diego Gas and Electric Evaluate Storage Potential in Wholesale Electricity Markets

Battery dispatch responding to market signals. Image from NREL

San Diego Gas & Electric^® is planning on installing battery storage on a feeder with high solar photovoltaic (PV) penetration, and worked with NREL to develop tools that will evaluate the potential benefits of participating in wholesale electricity markets. The tools will be used for multiple battery applications including transmission and distribution deferral, PV smoothing, locational marginal prices arbitrage, and frequency regulation.

NREL modified the REopt^® platform for this analysis to include models of the regulation up and regulation down markets, and a cycle-based battery degradation model. NREL also included the capability to reserve portions of the battery capacity (power and energy) for local control or peak shaving dispatch.

The outcome of the REopt analysis was an optimal dispatch strategy to maximize return on investment across all value streams. The strategy includes whether to participate in the energy market or the ancillary services market, at what level to participate, and how much of the battery capacity to allocate to the selected market(s). The strategy also considers how much the battery is being degraded in order to capture these economic benefits, and whether that degradation is sufficiently small to warrant the proposed market participation. San Diego Gas & Electric is using NREL’s analysis to inform its market participation strategy.