WHY THE WESTERN
U.S. NEEDS ENERGYSTORAGETABLE OF CONTENTS

2Mitsubishi PowerIntroduction

3The Push to Decarbonize

4

Heat Storm and Blackout

5

Energy Storage Alternatives: An Overview

7

Pumped Hydro

8

Understanding hydrogen

9

Battery storage

5

Hydrogen Storage

5

The Green Hydrogen Solution

10

A Giant Leap Forward

11Conclusion

12

Copyright © 2020 Mitsubishi Power Americas, Inc. All rights reserved. This document or any portion thereof may not be
reproduced or used in any manner whatsoever without the express written permission of Mitsubishi Power, LtdINTRODUCTION
California experienced record
curtailment of renewable powerin the Spring of 2020, but when an
exceptional heat wave struck theWestern United States in mid-August
2020, power supply did not meetdemand, triggering two rolling power
blackout events across California.

Described in a preliminary root cause
report by the California Independent
System Operator as a “heat storm”,
the event shone a spotlight on
the growing imperative of storing
renewable-power when it is in oversupply, to be used when power is in
short supply.

Copyright © 2020 Mitsubishi Power Americas, Inc. All rights reserved. This document or any portion thereof may not be
reproduced or used in any manner whatsoever without the express written permission of Mitsubishi Power, LtdThis whitepaper highlights recent
significant electric power challenges
facing Western states, outlines
existing energy storage alternatives
and presents a plan to use large
deployment of Li-ion Battery Energy
Storage for short duration needs and“green” hydrogen for long duration
storage.

Mitsubishi Power3

THE PUSH TO DECARBONIZE
As the power grid evolves in response
to climate change, the risks faced byelectric power utilities and millions ofcustomers are increasingly evident,
perhaps nowhere more so thanacross the Western United States.
There, a combination of drought,
hotter summers, extended wildefire
seasons and increased use ofintermittent renewable resources posea heightened threat to reliable electric
power delivery to some of the mostpopulated and economically criticalparts of the country.
With climate scientists predicting
even more frequent and severe
weather events, policymakers inseveral Western states-including

California, Washington, New Mexico,
Nevada and Colorado-are adopting
measures designed to achieve deep
decarbonization while also ensuringresource adequacy throughout theyear, including during challenging
weather conditions.

100% carbonfree (2045)
NH 25.2% (2025)

80%(2030)

75% (2032)
15% (2015)

10% (2020)

50% (2040)

31.5% (2025)
10% (2015)

80% clean energy(2050)

10% (2015)

38.5% (2035)
CT 48% (2030)

15%(2021)
50% (2030)

18%(2021)

105MW*
25% (2025)

100% carbonfree (2045)

20% (2020)30% (2020)

10%(2025)

15% (2021)

8.5%(2026)
100%(2050)

50% (2030)

50% (2030)
100% (2032)

20% (2020)

20% (2020)100% carbonfree (2045)

15% (2015)

2%(2021)

10,000MW* (2020)

Figure 1: RPS targets in US(S&P Global Market Intelligence

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reproduced or used in any manner whatsoever without the express written permission of Mitsubishi Power, Ltd

HEAT STORM AND BLACKOUT
Recent events highlight the growing
imperative to move to decarbonized,
electric power generating resources
across the Western U.S.

50,000
4:56 pm: 46,8025:37 pm: 44,957

45,000
6:26 pm: 41,138

6:51 pm: 42,237

FROM AUGUST 14-19, 2020,THE WESTERN UNITED STATESEXPERIENCED AN EXTREME HEATSTORM, WITH TEMPERATURESANYWHERE FROM

10-20
DEGREES(MW)

40,00035,00030,00025,00020,000
Actual demand

Net demandStage 3 duration

Figure 2: Net demand and blackout on August 14, 15 (source: CAISO)ABOVE NORMAL
As explained by the California Independent System Operator (CAISO) in apreliminary root cause analysis of the grid’s performance, extreme heat affects
both the demand for and the supply of electricity. During normal summer weather
conditions in California, high daytime temperatures are offset by cool and dry
evenings. However, during extreme heat events, hot temperatures persist into
the evening and overnight hours, air conditioners continue to run and electricity
demand climbs well beyond normal levels.
Faced with these converging conditions and with reserves falling below required
minimums, officials at CAISO declared a Stage 3 Emergency on August 14.
To comply with mandatory resource adequacy standards, they initiated rotating
outages (also called load-shedding) on the evening of August 14, for the first timesince 2001.
THIS AFFECTED NEARLY

500,000 CUSTOMERSFOR ANYWHERE FROM 15 TO 150 MINUTES.

The following day, CAISO officials declared a second Stage 3 Emergency.
THIS TIME, ROTATING OUTAGES AFFECTED

321,000 CUSTOMERSFOR ANYWHERE FROM 8 TO 90 MINUTES.

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Mitsubishi Power5In its preliminary analysis report,
CAISO found that many required
resources did not, or were unable to,deliver electrical energy. Everythingfrom conventional power plants torenewables and imports from outsideof the state fell short as California
struggled to cope with the effects ofthis extreme weather event.

The California State Assembly later
passed SB 100, which requires thestate to meet 100 percent of retailsales with zero-carbon electricity bythat same year.

Large amounts of simple-cycle andcombined-cycle generating units haveat least 10 hours a day between startand shutdown in a year to support
California’s growing volume of intermittent renewable energy resources.

AND THE STATE’S GOAL TO RETIRE

3,200 MEGAWATTS (MW)The emergency occurred as the state isin the process of moving to a decarbonized future, which includes replacing
conventional generating resources withcarbon free and renewable sources.
For example, California Executive Order
B-55-18 called on the state to achievecarbon neutrality by 2045.

OF NATURAL GAS GENERATING CAPACITY WILL REQUIRECREATIVE SOLUTIONS SUCH AS LONG-DURATION STORAGE TO
INCREASE PEAK DEMAND RELIABILITY.

Most of the natural gas power plants in California experience times during the year when they are
required to operate for long periods of time. If natural gas power is going to be reduced over time,
a combination of short duration energy storage and long duration energy storage will be required
to meet resource adequacy requirements while increasing use of wind and solar energy

Month

5,000
2,000

Week

500
200
100Day5020
10Capacity (MW)

550.0
100.0

5.0

Combined Cycle

2150.0200.0
260.0

Combustion Turbine

1020

406080100* Maximum operating hour duration for a start to stop in a year

120

140

160200220
180Annual Starts

240

260

280

300

320

340

360

Hour

Longest Operating Time (Hr)*

1,000

380

Figure 3: N atural gas replacement by batteries alone will not be sufficient(Source: Mitsubishi’s analysis of all CA plant operation 2015-2019)6

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reproduced or used in any manner whatsoever without the express written permission of Mitsubishi Power, Ltd

ENERGY STORAGE ALTERNATIVES: AN OVERVIEW
StorageTechnology

Typical Size
Range

TypicalStorage
Duration

Efficiency

Lifetime

Largest Project
in US

Battery(Lithium-ion)

100 MW4h-8h85-95%

1000-10000
cyclesMoss Landing
Energy Storage
Facility, CA

Pumpedstorage
hydro10-3000 MW

4h-16h70-85%

30-60 years

Bath County
Pumped Storage
Station, VA

Hydrogen
Project

100 MW –several GW

hoursmonths

35-45%

30-50 years

Advanced Clean
Energy Storage,
UT

ENERGY STORAGE IS A KEY PATHWAY
TO DECARBONIZATION BY STORINGEXCESS ENERGY FOR LATER USE,WHETHER IT IS MINUTES, DAYS,WEEKS, MONTHS OR EVEN SEASONS.
Of course, the type of energy storage
needed depends on many factors.
Three leading technologies for energy
storage are battery storage for shortdurations, pumped hydro for intermediate durations, and green hydrogen for
longer duration storage. Each technology has a place in the energy mix.

BATTERY STORAGE
Battery storage has enabled more
renewables to come online. The mostcommon types of battery chemistry
are Lithium-ion (Li-ion), nickel-based,sodium-based, lead acid and flow
battery.

OVER

90%

OF UTILITY-SCALE BATTERYSTORAGE POWER CAPACITY
IN THE UNITED STATES WASPROVIDED BY BATTERIES BASEDON LITHIUM-ION CHEMISTRIES.

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reproduced or used in any manner whatsoever without the express written permission of Mitsubishi Power, Ltd

EIA classifies utility Li-ion battery
systems as systems with more than
one MW capacity. Li-ion batteries excel
at storing energy for short periodsof time and providing instantaneouspower. However, these batteries arelimited by discharge duration andcannot efficiently and economicallystore energy for longer periods of time.
According to IHS Markit, 4-hourlithium-ion battery costs have declined
42% since 2016, primarily due tocost decline in the battery module.
As the battery cost comes down,
Li-ion batteries are becoming very
cost-effective for short duration
or diurnal storage. The batteries areoften paired with renewable tosmooth out generation and firm-up
renewable capacity.

Mitsubishi Power

7

PUMPED HYDROLIKE LI-ION BATTERIES, PUMPEDHYDRO IS ABLE TO QUICKLYRESPOND TO ELECTRICAL LOAD
CHANGES. A PUMPED HYDROPROJECT IS TYPICALLY DESIGNEDFOR UP TO 20 HOURS OFRESERVOIR STORAGE.
AT PRESENT, PUMPEDHYDROELECTRIC STORAGE,A FORM OF MECHANICAL

Pumped storage is a proven technology
and has been used in the United Statessince the 1920s. Pumped storage
systems are four to 16 hour storage
with approximately 60 years of life andan operational efficiency between 70
and 85 percent.

8Mitsubishi PowerAT PRESENT, HYDROELECTRIC
PUMPED STORAGE,ACCOUNTS FOR AROUND

97%

OF THE COUNTRY’SLARGE-SCALE ENERGYSTORAGE CAPACITY ACCORDING
TO THE U.S. DEPARTMENT OF
ENERGY’S ENERGY INFORMATIONADMINISTRATION (EIA).

Much of this pumped storage is in vast
reservoirs that typically are sited inremote areas far from load centers.
Few new hydroelectric pumped storage
facilities have been built since the turnof the century. Indeed, EIA said thatsince 2003, installation of new largescale energy storage facilities has been
almost exclusively electrochemical, orbattery energy storage.

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reproduced or used in any manner whatsoever without the express written permission of Mitsubishi Power, Ltd

UNDERSTANDING HYDROGENAT PRESENT, MOST HYDROGEN(ANYWHERE FROM

96% TO99%)

is produced from natural gas or otherhydrocarbon fuels. Energy is applied
to separate the hydrogen from otherelements.
Hydrogen, an increasingly viable,energy storage medium whose vast
abundance makes it a practicallyinexhaustible resource for applications
that include transportation and electric
power generation.

Hydrogen that is derived through theuse of hydrocarbons is called “gray”
hydrogen and its production generates
significant carbon emissions. This
makes gray hydrogen ill-suited as asource of zero-emission electric power
generation in places
like California and elsewhere acrossthe West.
By contrast, “green” hydrogen is
produced using renewable energy
resources to split water into hydrogenand oxygen. The method to do thisis called “electrolysis,” and uses theenergy from an electric current to split
water into its elemental components,
oxygen and hydrogen (hence, thefamiliar chemical formula H2O). Greenhydrogen excels at storing energy fordays, weeks, months or seasons.

According to the Green Hydrogen
Coalition, electrolysis cells may readily
be stacked and used for commercial
green hydrogen production whenconnected to wind farms, solar plants
or other renewable electricity sources.
Electrolyzers interconnect to the gridin much the same way as solar orenergy storage systems, with inverters.
They operate with a fast responsetime and can provide flexible load tothe grid, including important ancillary
services such as voltage support andfrequency regulation.
Gray and blue hydrogen provide
storage of fossil fuel energy. Only
green hydrogen can store renewableenergy.

Figure 5: T ypes of Hydrogen(source: RFF)

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reproduced or used in any manner whatsoever without the express written permission of Mitsubishi Power, LtdMitsubishi Power

9THE GREEN HYDROGEN SOLUTION

Green hydrogen excels as a long
duration storage technology and when
doing a cost comparison, should becompared to other forms of long
duration energy storage. When doingso, green hydrogen becomes thelowest cost option available.

MITSUBISHI POWER ALREADY
HAS DEEP EXPERTISE IN
HYDROGEN COMBUSTIONTECHNOLOGY

2017

350,000

Megawatt hour (MWh)Green hydrogen can be cost effectively
stored for days, weeks, even seasonsand provide much needed energy
arbitrage that future heavy renewablegrids will need. The grid of the future
will be moving “beyond the duck curve”
which today only focuses on intra-daily
imbalances of energy. Green hydrogenmakes it possible to support the interdaily, weekly and seasonal imbalances
we already see today. This dynamic
is continuing to unfold and as morerenewables come online, will become
even more prominent issue as shownin Figure 6.

2018

2019

2020

2021

300,000
250,000
200,000
150,000
100,000
50,000
JAN

FEB

MAR

APR

MAYJUN

JUL

AUG

SEP

OCT

NOV

DAILY RENEWABLE ENERGY GENERATION SURPLUSES AND DEFICITS, MIXED RENEWABLE SCENARIO
30,000

Renewable Energy Surplus
20,00010,0000-10,000-20,000-30,000

Renewable Energy Deficit
JF

M

A

M

JJ

A

SO

N

D

Source: Armonk Cohen Testimony

Figure 6: Curtailment and surplus inCalifornia

WITH MORE THAN

3.5

MILLION
HOURS

OF EXPERIENCE CO-FIRING HYDROGEN IN
MORE THAN TWO DOZEN FACILITIES SINCETHE EARLY 1970S.

100%THE COMPANYALSO RECENTLY
ANNOUNCED ITS FIRST

CLEAN
ENERGYPROJECT WITH THE INTERMOUNTAIN POWER
AGENCY AT THE INTERMOUNTAIN POWER PLANT(IPP) IN DELTA, UTAH.

10

Mitsubishi PowerDEC

California surplus and deficit patterns under a100% renewable energy scenario

Average Daily Surplus or Deficit (MW)The convergence of decarbonization
goals, increasing penetration ofrenewable energy resources and thethreat of extreme weather events suchas the August heat storm, all favor
the deployment of a green hydrogensolution as a long-duration energy
storage medium to maintain system
reliability while enabling greater
renewable resource penetration.

California wind and solar curtailments
hit record high in April 2020

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reproduced or used in any manner whatsoever without the express written permission of Mitsubishi Power, Ltd

A GIANT LEAP FORWARD
The IPP Renewal project will replace
existing coal-fired units with 840 MWof blended natural gas and hydrogen
power generation to customers that
include the Los Angeles Departmentof Water and Power and municipalities
across both California and Utah.
TWO M501JAC POWER TRAINS WILL
INITIALLY USE A MIX OF

30%
70%

HYDROGEN
AND

This blend will cut carbon emissions
by more than 75% compared to theretiring coal-fired boilers. Then no later
than 2045, the power plant’s capability
will rise to 100% hydrogen, reducing
carbon emissions entirely.
An important energy storage
component integral to the facility is
the Advanced Clean Energy Storage
project, adjacent to IPP, which willproduce green hydrogen on a massivescale. This project, jointly developedby Mitsubishi Power and Magnum

NATURAL GAS AS
FUEL FOR POWER
GENERATION BY 2025

Development, will store 150 gigawatthours (GWh) of renewable energy inan underground salt cavern as partof the first phase of the project. Thereis enough room for an additional
99 salt caverns for future phases.
The relatively low cost of hydrogenstorage in geologic formations willallow large amounts of energy to bestored at low cost.
This will be particularly useful inproviding firm zero-carbon electricity
during multiday periods with low
wind and solar power generation
for future phases.

OPERATIONAL COST OF HYDROGEN AND
NATURAL GAS BLENDED IN TURBINES
Operational Cost of Hydrogen and Natural gas blended in turbines

InIn thetheearly
earlyyears, blending higher
Over time, as more renewables areyears, blending higher concentrations of natural gas with hydrogen offsets the higher cost ofconcentrationsof natural
added
to thegrid
electrolyzerhydrogen keeping operating
costs low.gas
Over withtime, as more renewables
are addedto thegrid,andthe costofhydrogen decreases,
and theinnovations
and cost
capital ofcost improvements
for electrolyzers
higher the cost of greenhydrogenoffsets
highercapitalcosts occur,
improve,concentrations of hydrogen are used in the gas turbine, keeping operating costs flat or even declining.
hydrogenkeeping operating costs low.
hydrogen will significantly decrease.
Eventually at 100 percent hydrogen utilization, forecasts show the operating costs of such a unit can beless than or equal to $40/MWh.

80

Thus the gas turbine can capture thesecosts downs by blending increasing
amounts of hydrogen, decreasing
natural gas use, and ultimately keep
operating costs flat or declining
without adding additional hardware.

100%

6060%
4040%
2020%

0

Hydrogen/Natural Gas % Blend

Operating Cost ($/MWh)

EVENTUALLY AT
80%0%

2020

2025
Cost ($/MWh)

2030

2035
Hydrogen (% blend)

2040

2045

2050

100%
HYDROGENUTILIZATION, FORECASTS SHOW THE
OPERATING COSTS OF SUCH A UNIT
CAN BE LESS THAN OR EQUAL TO$40/MWH.

Natural gas (% blend)Figure 7 Operational cost of gas turbine with hydrogen and natural gas blend

Figure 7: Operational cost of gas turbine with hydrogen and natural gas blend

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Mitsubishi Power

11

CONCLUSION
Both short- and long-duration energy storage are critical components to reaching
the ambitious climate goals set in several Western states. Green hydrogen is anincreasingly viable energy storage medium whose vast abundance makes it well
suited to decarbonize the power sector. Green hydrogen excels as a long duration
storage technology and when compared to other forms of long duration energy
storage, green hydrogen becomes the most cost effective option available today. The
Intermountain, Power Plant and the Advanced Clean Energy Storage project is thefirst step in creating the necessary infrastructure to scale hydrogen production andstorage to accelerate the pace of decarbonization.

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