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Battery Storage Project Valuation & Operations Optimization

On-Demand Training:
Battery Storage Project Valuation & Operations Optimization

Recorded: November 9 - 10, 2023

Overview Agenda Instructors
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The growth of renewable generation around the country is creating structural change in electricity markets, driving dramatic increases in volatility in energy markets and altering the needs for ancillary services.   Battery storage, given its fast-ramping capability, offers a unique opportunity for taking advantage of these changing market dynamics. The energy landscape is constantly changing, so it is more important than ever to know how to optimize battery storage across potential revenue streams to develop successful storage projects. 

This course is designed to provide expert insight on the rapid expansion of renewables and battery storage, offering strategies for resource planning, portfolio management, and operations. Practical case studies of valuation and optimal siting of potential standalone storage projects and storage paired with renewables will be used. By focusing on the new fundamentals of supply, this interactive course illuminates critical pathways to improve decision analytics on the most pressing challenges facing the energy industry.

Learning Outcomes

  • Discuss the evolving landscape of energy and ancillary services across markets
  • Review the keys to profitable battery projects
  • Identify the optimal location for storage project to maximize its value
  • Assess key capital and operating cost components for battery projects
  • Discuss degradation, augmentation and optimal sizing
  • Review bid offer optimization to maximize the net revenue for standalone storage and for storage paired with renewables
  • Assess key risks in battery projects and potential hedging mechanisms
  • Review batteries as a physical hedge for renewable portfolios
  • Discuss the valuation of standalone and renewable energy-paired storage projects

Register

This is a recorded session - no instructor interaction is available. Recordings do not qualify for continuing education credits. Recordings will expire 30 days from date of purchase and sharing, downloading or copying of the recording in any way is strictly prohibited and will result in the termination of your license.

PURCHASE THIS RECORDING:

Recording license(s)$ 1195.00 each

Day one

Day two

Agenda

8:45 AM - 9:00 AM

Log In

9:00 - 9:20 AM

Overview and Introductions

9:20 - 10:30 AM

Evolving Landscape of Energy and Ancillary Markets

  • Evaluation of historical energy and ancillary prices
  • Impact of changing supply stack and demand curves on power prices and volatility
  • Day-ahead (DA) and Real-time (RT) price response to changing fundamentals
  • Structural drivers of market price volatility and real-time price spikes
  • Long-run cost of power and impact of technology
  • Congestion persistence, basis evolution, and transmission limits
10:30 - 10:45 AM

Morning Break

10:45 - 11:30 AM

Forecasting Future Market Conditions

  • Forecasting prices, shapes, volatility, and long-run equilibrium
  • New unit entry and exit
  • Renewable curtailments and impacts on market prices
  • Hourly and sub-hourly ramps and proposed capacity reserve imbalance markets
  • Future of ancillary service markets and the opportunity cost of participation vs. real-time energy
  • Sub-hourly price dynamics
  • DART Spreads
11:30 AM - 12:00 PM

Project Siting and Sizing

  • Key metrics for battery project profitability
  • High-level methodology of maps
  • Heat maps for a sample ISO
  • Discussion of areas of interest for siting storage
  • Basis risk in battery and renewables and battery projects
12:00 - 12:45 PM

Lunch Break

12:45 - 1:45 PM

Stacking of Revenue Streams

  • Energy and ancillary services
  • Capacity and limits on energy
  • Battery and renewable system physical attributes
  • Optimization of storage operations
    • Maximization of net revenue
    • Physical asset and market constraints
    • Naïve strategies
    • Imperfect foresight
    • Perfect foresight
  • Asset-backed virtual or convergence trades
  • Putting it all together
1:45 - 2:45 PM

Elements of Bid Offer Optimization

  • Decision making vs. operational platform
  • Robust bid-offer optimization
  • Conditional value at risk and other risk metrics
  • Selecting markets in which the battery will participate (e.g., regulation, spinning reserve, day-ahead energy, real-time energy)
  • Review of detailed valuation outputs and dispatch reports
2:45 - 3:00 PM

Afternoon Break

3:00 - 4:15 PM

Hedging of Storage and Renewables Plus Storage

  • Hedge instruments to firm of future cash flows with renewables
  • Convergence in efficient markets vs. risk premium of hedging
  • Principal risk factors of market price, physical delivery basis risk
  • Shape risk and price-volume correlations
  • Rolling the hedge forward strategies
4:15 - 4:30 PM

Q&A

Agenda

8:45 AM - 9:00 AM

Log In

9:00 - 9:45 AM

Case Studies of Valuation and Operations of Standalone Storage

  • Measuring project return relative to risk
  • Co-optimization of energy and ancillaries
  • Robust stochastic sub-hourly modeling and residual risk
  • Visualization tools for decision support
9:45 - 10:45 AM

Case Studies of Valuation and Operations of Solar plus Storage

  • Measuring project return relative to risk
  • Problems with valuations run in deterministic models with high / low scenarios, and average price shapes
  • Using storage to shift solar to peak load hours
  • How battery plus solar system dispatched to sub-hourly RT prices with hedging leads to much less forward price risk
  • Quantifying and understanding basis, shape and intermittency risk
10:45 - 11:00 AM

Morning Break

11:00 AM - 12:30 PM

Impact of Inflation Reduction Act (IRA) on Storage Use Case Modeling

  • IRA storage-specific incentives and other enabling provisions
  • Storage incentive(s) no longer restricted only to qualifying solar deployment
  • Influence of direct cash payments and transferability provisions
  • Supply chain and interconnection bottlenecks exacerbated by demand-supply imbalance
  • Taking into account domestic content and other externalities

Instructor

Vinayak Walimbe is Vice President of Emerging Technologies (North America) at Customized Energy Solutions, which he joined in 2011.  He leads the Emerging Technologies consulting practice in North America with a focus on energy storage and renewable integration. Mr. Walimbe is a chartered financial analyst with extensive experience in financial modeling and advisory in U.S. and international markets. His focus is on techno-commercial analysis of energy storage projects, strategy consulting and investment analysis of emerging technologies.  Previously, he was Manager at a Boston-based private-equity firm that invested in natural gas plants in the Middle East and North Africa. Prior to that he was involved in aircraft securitization and risk analysis of structured finance products in the aircraft industry. Mr. Walimbe holds a Master of Science degree from Georgia Institute of Technology, a Master of Engineering degree from V.J.T.I. Mumbai and an undergraduate degree in Electrical Engineering from Walchand College of Engineering (India).

Vinayak Walimbe

Vice President of Emerging Technologies (North America)

Customized Energy Solutions