Energy Storage Value and Adoption Analysis
Evaluation of Key Value Drivers
Reduction in Production Costs
Approach
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We use a production cost model - Power System Optimizer (PSO) – to
estimate cost of meeting Nevada's energy and ancillary service needs.
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We simulate entirety of WECC, with focus on Nevada
- To account for changes in Nevada production costs, purchases, and sales, we
calculated adjusted production costs (APC) for the Nevada footprint
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We simulate 3 scenarios: base case (no storage), 200 MW, and 1,000 MW of storage
Calculating Nevada Adjusted Production Costs (APC)
Nevada Adjusted Production Costs =
Production Costs
+ Cost of Purchases
- Revenue from Sales
WECC Footprint
Production Costs = Cost of Nevada owned generation
• Generation costs include fuel, emissions, variable operating,
and startup costs
Cost of Purchases = Deficit in generation × Price Hub
• Purchases priced at the Malin and Mead hubs for Northern
and Southern Nevada, respectively.
Revenues from Sales = Surplus in generation * Price Hub
• Sales priced at the Malin and Mead hubs for Northern and
Southern Nevada, respectively.
Cabos
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