Energy Storage Could Support Majority Renewable Future: NREL Study

January 20, 2022

by Peter Maloney
APPA News
January 20, 2022

Energy storage, particularly diurnal storage, can play an important role in providing resource adequacy in future scenarios where renewable energy is the dominant form of generation, according to a new report from the National Renewable Energy Laboratory (NREL).

The study, Grid Operational Impacts of Widespread Storage Deployment, is the sixth and latest in NREL’s Storage Futures Study, a series of studies on the role of energy storage in maintaining a resilient and flexible electrical grid through 2050.

Past NREL studies in the series had shown the potential for between 213 gigawatts (GW) and 932 GW of energy storage by 2050 and, even in the most conservative scenario, in excess of 125 GW.

In the new study, NREL used 213 GW as a reference case and the most likely mid-range for energy storage installations. The study also modeled around a scenario in which 74 percent of electric output would be generated by wind and solar power by 2050.

“We really wanted to look at the effects of higher levels of deployment,” Jennie Jorgenson, principal investigator of the study, said.

Starting with its Regional Energy Deployment System (ReEDS) model that shows least-cost scenarios for energy storage under a range of cost and performance assumptions, NREL took the next step by testing that model to see how energy storage would perform under on an hourly basis.

“Overall, we find that the high storage (and often high variable generation) power system scenarios envisioned in ReEDS successfully operate with no unserved energy and low reserve violations, showing no concerns about hourly load balancing through the end of 2050,” the researchers wrote in the study. “Unserved” energy in the report refers to dropped load.

“We once again find that the potential future energy system with large quantities of energy storage could successfully balance load 24/7,” Jorgenson said in a statement. “On top of that,” she said, “we find power systems with high levels of energy storage operate more efficiently by storing otherwise unused renewable energy to displace costly generation from other sources.”

The study found the charging and discharge cycles of energy storage are well aligned with the diurnal cycles of solar power. Wind power, on the other hand, is less well aligned with daily cycles and often experiences periods of overgeneration that can last many hours or days, which is much longer than the storage durations in the study. Energy storage can play a key role in utilizing energy from both solar and wind power, but the synergies with solar power are more consistent, the researchers found.

The study also found that energy storage can increase the efficiency and lower the emissions of a power system by using wind or solar overgeneration to displace coal and natural gas-fired generation.

Energy storage also, more often than not, encourages higher utilization of transmission assets, the researchers found, but cautioned that further study would be needed to understand the interaction of storage and transmission assets.

“Collectively, the results of this and previous Storage Futures Study analysis show the growing opportunity for diurnal storage (that is, storage with up to 12 hours of duration) to play an important role in future power systems,” the researchers wrote.

Greater deployment of diurnal storage can increase efficiency of operations by reducing overgeneration, decreasing generator starts and emissions, and increasing utilization of the transmission system, they said.

Energy storage can also play “an important role in providing capacity during the top net load hours. Future work could examine the role of longer-duration storage resources, especially under highly decarbonized grid conditions, such as those approaching 100% clean energy,” the researchers said.

NREL is planning a free webinar on its new study on Jan. 25. There will also likely be a final synthesis report on NREL’s energy storage series in the next month or so, Jorgenson said.

U.S. Storage Market Sets New Installation Record In Q3 2021

December 12, 2021

by Paul Ciampoli
APPA News Director
December 12, 2021

The U.S. energy storage market set a new record in the third quarter of 2021, with new system installations totaling 3,515 megawatt hours (MWh).

Wood Mackenzie and the Energy Storage Association’s latest U.S. Energy Storage Monitor report, released Dec. 9, said with market momentum building, it is likely this storage market record will be broken in the fourth quarter.

In addition, an expected solar investment tax credit (ITC) extension, standalone storage ITC, and a California solar and storage mandate are all assumed in the forecast for the first time this quarter, significantly increasing forecast storage deployment.

The third quarter saw the utility-scale front-of-the-meter (FTM) market deploy 998 MW/3198 MWh, with California, Texas and Arizona leading the segment.​

California continued to lead in FTM project deployment, with a trio of projects developed by NextEra Energy Resources near Blythe contributing the majority of the MW for the quarter. Storage projects in Texas developed by Broad Reach Power also boosted third quarter FTM capacity.​

Installations increased slightly in the residential market as attachment rates continue to rise, with another 97.9 MW/225 MWh of new residential storage brought online in the quarter​.

But project timelines for residential solar-plus-storage remain problematic, with solar module and battery constraints among the challenges contributing to project backlogs. However, vendors and installers managed to increase residential storage deployment over the second quarter.

The non-residential market recorded its best quarter of 2021 so far, with 43.6 MW/92.1 MWh deployed.

Commercial virtual net metered and community solar projects with storage attached contributed most of the non-residential capacity in the third quarter, with most behind-the-meter non-residential projects sited in California.​

Public Power Executives Detail Storage Project Benefits, Lessons Learned

December 6, 2021

by Paul Ciampoli
APPA News Director
December 6, 2021

Executives from public power utilities in North Carolina, Rhode Island and Minnesota recently detailed benefits and lessons learned from energy storage projects that their utilities have pursued. 

The officials from Fayetteville Public Works Commission in North Carolina, Grand Rapids Public Utilities Commission in Minnesota and Rhode Island’s Pascoag Utility District, made their remarks during a session at the American Public Power Association’s (APPA) Public Power Forward Virtual Summit on Dec. 2.

Michael Kirkwood, General Manager at Pascoag Utility District, described a non-wires alternative project that “became a real money-saving option to avoid a large transmission expenditure that we were facing.” The project “fit in with some other reinforcements that we were doing on our system. The battery storage really made this possible and saved us a lot of money.”

Pascoag Utility District serves 4,900 customers in Pascoag and Harrisville, two villages in northwest Rhode Island. The PUD is connected to the outside world via two 5-mile 13.8 kV lines from investor-owned National Grid.

Peak load for the public power utility on the hottest summer days is about 13 megawatts. In 2018 and 2019, Pascoag Utility District started to reach the thermal limits of the main feeder line.

In 2019, Pascoag Utility District commissioned a system impact study that was completed by National Grid and offered several alternatives.

The public power utility determined that a non-wires alternative was the most cost-effective solution using a combination of substation enhancements and battery storage. The 3-megawatt/9-megawatt hour lithium-ion energy storage system is being built by Agilitas Energy.

The project has helped Pascoag Utility District avoid having to spend $6 million to $12 million “and if you look at that over 4,900 customers that’s a big nut to crack for a lot of years,” Kirkwood said.

The project will also increase reliability and reduce loading on the feeder lines, he noted.

Another panelist, Julie Kennedy, General Manager for Minnesota public power utility Grand Rapids Public Utilities, offered details on the utility’s solar plus battery storage project.

She noted that the project got its start in 2016 through a citizen initiative. A community solar project was initially considered, Kennedy said.

In late 2018, the public power utility presented a final report to its commission. “We said, you know what, it is a little bit difficult to make that subscription model work.” While the utility could have pursued that approach, “it really wasn’t meeting the hopes and desired outlook that we had had when we had our community outreach,” Kennedy said.

“What we did notice, though, was the parity in the pricing between solar only and the solar plus storage and so we started looking at those economics a little bit more closely and that is what caused us to add the energy storage.”

Along with US Solar and Grand Rapids Public Utilities, other parties involved in the project are Minnesota Power, a subsidiary of investor-owned Allete, the Itasca Clean Energy Team, and the City of Grand Rapids. US Solar is developing the two-megawatt solar array and one-megawatt/2.5-(megawatt?) hour energy storage battery on city-owned land near the Grand Rapids/Itasca County Airport.

Kennedy noted that installation of the solar panels at the site was completed in the fall. The storage battery “is, unfortunately, out at sea, still. We have been postponed with supply chain issues. Our next anticipated date is December 16. We are waiting to run our test energy. We are hopeful that it will be on site December 16,” with commissioning by the end of the year.

Meanwhile, Elaina Ball, CEO of Fayetteville Public Works Commission, detailed the utility’s community solar plus storage project.

“We were the first municipal community solar project in the state of North Carolina,” she noted. The project came online in 2019.

The 1-megawatt, 3,384 panel farm is located in northeast Cumberland County, adjacent to the utility’s Butler-Warner Generation Plant. In addition, the farm has 500-kilowatt battery storage. The battery is discharged 100% over two hours.

Ball said that the installed cost of the battery system itself “was a little over $900,000 and we expect about $5,500 in annual O&M costs just around the battery system and based on demand shaving that we’ve had, we expect our annual savings to be about $120,000. In a simple payback term, the battery is paying for itself in eight years.”

She said that “looking to the future, we want to add additional storage.” Ball noted that the utility’s wholesale contract allows for Fayetteville PWC to go up to 2 megawatts, “so we are in the process of adding another” one-and-a-half megawatts of storage.

“That’s really going to do two things. One, it’s going to be a four-hour discharge potential, which will give us much longer duration and give us an even better tool to hit that coincident peak window. But it’s also going to allow us to maximize our battery storage capacity. So we got our toe in the water, know how to operate this system” and the utility now wants to “push the capacity and we want to make sure that we’re getting as much value out of these resources as possible,” Ball said.

The utility is also studying additional community solar projects in its service territory. It is focused on looking at the economics of those projects, as well as “making sure that there’s customer demand to support additional resources in the community,” she said.

APPA Storage Tracker

APPA recently launched a Public Power Energy Storage Tracker, which is a resource for association members that summarizes energy storage projects undertaken by members that are currently online. The tracker is available here.

Wells Fargo, D.E. Shaw Close Tax Equity Deal For Solar-Storage Project

November 30, 2021

by Peter Maloney
APPA News
November 30, 2021

Units of Wells Fargo and D.E. Shaw this week closed on a tax equity financing for a solar-plus-storage project in McKinley County, N.M.

The Arroyo Solar and Storage project is a 300-megawatt (MW) solar array combined with a 150 MW, 600-megawatt hour (MWh) battery energy storage system that was originally developed by Centaurus Renewable Energy.

Centaurus closed on a $70 million construction bridge loan for the project from Voya Investment Management in late June. D. E. Shaw Renewable Investments (DESRI) acquired the project from Centaurus in September.

The first phase of the Arroyo project is expected to begin commercial operation in June 2022 with full operation expected in the fall of 2022.

Arroyo is currently under construction with efforts being made to hire workers locally and from the Navajo Nation. The project is expected to generate as many as 250 jobs during construction.

D. E. Shaw and Wells Fargo’s Renewable Energy & Environmental Finance group have now closed on the long-term tax equity financing for the project. The value of the deal was not disclosed.

A tax equity financing usually involves a financial entity taking an equity stake in the project company in return for revenue streams and tax credits generated by the project.

At the end of a period of time, the tax equity investment in the project usually reverts or is bought back by the original developer or the project sponsor.

For the Arroyo project, Wells Fargo is the tax equity investor, spokeswoman Trina Shepherd said via email. D.E. Shaw provided the cash equity and is the project sponsor and has an option to buy out the tax equity investor at the end of the deal.

Solar-plus-storage projects are eligible for investment tax credits (ITC) for both the solar and storage portions of a project, if certain criteria are met. The ITC percentage for projects beginning construction in 2021 or 2022 is 26 percent of the value of the project.

The Arroyo project is Wells Fargo’s first tax equity investment in a project with co-located battery storage. It is D.E. Shaw’s first solar project with co-located battery storage to enter construction and financing.

The Arroyo project has two offtake contracts with Public Service Company of New Mexico, one for the solar output and one for the output from the storage system. The combined output of the project will supply a portion of the replacement capacity needed to retire the 847-MW San Juan coal plant in San Juan County, N.M., which is scheduled to retire at the end of 2022.

Sundt Construction is building the Arroyo solar facility. ECI of Billings, Mont., provided the design for the substation and switchyard that will be built by its EPC Services subsidiary. Tesla will supply and commission its Megapack battery units for the facility, and New Mexico-based Affordable Solar Installation will construct the battery energy storage system. SOLV Energy and Tesla will provide ongoing operations and maintenance services to the facility once it is in operation.

Peninsula Clean Energy Enters Second Solar Plus Storage Agreement

November 17, 2021

by Paul Ciampoli
APPA News Director
November 17, 2021

California community choice aggregator (CCA) Peninsula Clean Energy has entered into its second 15-year agreement to procure solar and battery storage from a single project.

Peninsula Clean Energy reached a power purchase agreement with Arica Solar LLC, that includes 100 megawatts (MW) of solar and 50 MW (200 megawatt hours) of four-hour lithium-ion battery storage.

The project, which will be developed and owned by Clearway Energy Group, is expected to be operational on or around April 1, 2024.

It is the second solar-plus-storage power purchase agreement Peninsula Clean Energy has reached, following a 15-year deal signed in September with Leeward Renewable Energy involving 102 MW of solar and 52 MW of battery storage from the Chaparral Solar Facility in Kern County.

The location of the Arica Solar project in Riverside County, Calif., was chosen in consultation with environmental activists to avoid harm to area species and habitat.

Peninsula Clean Energy is the official electricity provider for San Mateo County and, beginning in 2022, for the City of Los Banos.

Founded in 2016, the agency serves 295,000 customers by providing more than 3,500 gigawatt hours annually of electricity.

Peninsula Clean Energy is on track to deliver electricity that is 100 percent renewable by 2025. The agency has earned investment grade credit ratings from Moody’s and Fitch.

The American Public Power Association has initiated a new category of membership for community choice aggregation programs.

APPA-Funded Logan City Light & Power Energy Storage Project Advances

November 5, 2021

by Paul Ciampoli
APPA News Director
November 5, 2021

Pine Gate Renewables on Nov. 3 said that it has won a competitive bid with Logan City Light & Power (LL&P) to build a stand-alone energy storage system in Logan, Utah.

In 2020, LL&P received a $125,000 grant from the American Public Power Association’s Demonstration of Energy & Efficiency Developments (DEED) program to help fund the project. 

Providing 0.125 megawatts/0.5 megawatt hours (MWh) of backup energy for the grid, the Battery Energy Storage System (BESS) will be designed and integrated with the city’s System Operational Control Center, which monitors the municipal electricity distribution system, power plants, power contracts and call center. 

It will also be able to accommodate the area’s wide range of changing seasonal temperatures and elevation in northern Utah. 

“The LL&P energy storage project is another example of how public power utilities are at the forefront of innovation,” said Michele Suddleson, Director of R&D Programs at APPA. “It is also illustrative of how the DEED program helps public power utilities to improve their operations and services through grant funding.”

The project will use the Eos Znyth Gen 2.3 battery and Nikola Power’s Intellect Plus Energy Management System.

The Eos system, a zinc hybrid battery, along with Nikola Power’s Intellect Plus Energy Management System, has the ability to charge and discharge energy on a predetermined schedule as needed to allow for demand charge reduction, provide backup power to critical loads and supply additional grid services to maintain reliable continuity of service for the residents of the community. 

The BESS dispatches power during peak demand hours and ultimately delivers cost savings to customers. 

Blue Ridge Power will conduct the engineering, procurement and construction for the project, which is expected to be operational by late 2022. 

Pine Gate has more 12 gigawatt hours of storage in development either as stand-alone or combined with solar projects across the country. Its most recent solar plus storage project was Grissom Solar in Enfield, N.C., which went online earlier this year and provides 10 MWh of energy storage. 

DEED members can access reports on this and other projects in the DEED research library. The library is key word and topic searchable.   

Quarterly reports keep DEED members up to date on current projects, such as Logan’s storage project, and once a project is completed, the results, lessons learned, and any resources created to assist other utilities in replicating a similar project are shared in the library.

APPA Storage Tracker

The American Public Power Association recently launched a Public Power Energy Tracker, which is a resource for association members that summarizes energy storage projects undertaken by members that are currently online. The tracker is available here.

Lansing Board of Water and Light Seeks Information On Battery Storage-Only Projects

October 26, 2021

by Paul Ciampoli
APPA News Director
October 26, 2021

Michigan public power utility Lansing Board of Water and Light (BWL) is soliciting information for battery storage-only projects. Specifically, BWL is interested in learning about all aspects of storage projects, such as how they can be scheduled, priced, sited and more.

Information received in response to the request for information (RFI) may be used to assist the BWL in planning the scope of future technology studies, deployment, or technology commercialization efforts.

BWL may also use the RFI to gain public input on its efforts and formulate plans to mobilize investments.

“The information collected may be used for internal BWL planning and decision-making to ensure that future activities maximize public ownership while advancing the BWL’s goals for leading and building a competitive, clean energy utility and reducing carbon pollution,” the RFI said.

BWL noted that it is issuing the RFI solely for information and planning purposes and does not constitute a request for proposal.

Responses to the RFI are due by Nov. 30, 2021 and it is available here.

BWL currently provides electricity to more than 97,000 customers and drinking water to nearly 56,000 customers in the greater Lansing area. BWL also serves the Lansing downtown district with steam, heating, and chilled water.

APPA storage tracker

The American Public Power Association recently launched a Public Power Energy Tracker, which is a resource for association members that summarizes energy storage projects undertaken by members that are currently online.

The tracker is available here.

California’s Redwood Coast Energy Authority Enters Solar-Plus-Storage Deal

October 19, 2021

by Paul Ciampoli
APPA News Director
October 19, 2021

Swell Energy recently announced a contract with California community choice aggregator Redwood Coast Energy Authority (RCEA) to develop a program designed to provide additional capacity and resource adequacy to Humboldt County, Calif.

Swell Energy’s distributed power plant effort with RCEA will establish up to 45 megawatt hours of behind-the-meter solar-powered energy storage.

Swell Energy said that it is expanding its partnership with GRID Alternatives and leveraging all government, utility, and financial programs available to bring down customer costs and enroll both new and existing systems into the community grid program.

Residential, commercial, and industrial solar plus storage sites located at a customer’s site will be eligible to participate in RCEA’s community grid program.

Swell Energy said that its participation in California’s Self Generation Incentive Program (SGIP) allows it to offer additional monetary incentives to SGIP customers in the RCEA territory.

Since 2019, Swell Energy and GRID Alternatives have teamed up on residential and commercial energy storage projects throughout California.

RCEA is a local government joint powers agency whose members include the County of Humboldt, all local cities, and the Humboldt Bay Municipal Water District.

The American Public Power Association has initiated a new category of membership for community choice aggregation programs.

Lincoln Electric System Issues Energy Storage Request For Proposals

October 19, 2021

by APPA News
October 19, 2021

Nebraska public power utility Lincoln Electric System (LES) has issued a request for proposals (RFP) for an energy storage project to be located within the LES service territory.

The RFP seeks proposals for a 10-year power purchase agreement for both lithium-ion projects with a nominal rating up to three megawatts over four hours, and energy storage projects that utilize technologies other than lithium-ion batteries, with a preference for a nominal rating of at least 250 kilowatts and duration of two hours or more. 

The energy storage project is expected to provide several benefits to LES and the surrounding system and will be dispatched accordingly.

The energy storage project is intended to help support:

• Local transmission and distribution system reliability during periods of peak demand;
• Load-related energy arbitrage in the Southwest Power Pool (SPP) market;
• Regional SPP system reliability via load-related ancillary services;
• A LES-operated community microgrid that reinforces the resiliency of critical community infrastructure, and;
• Further development of energy storage knowledge and experience within LES.

“The energy storage system will only be required to operate in a grid-tied configuration; even during microgrid operations, an existing utility-scale generator will provide for system load balancing and voltage and frequency regulation,” the RFP noted.

LES’ preference is for proposals to have a commercial operation date of not later than December 31, 2022, although later dates may be considered.

Responses to the RFP are due by Nov. 2, 2021, and additional information is available here .

Over 60 Percent of Battery Storage Coming Online Will Be Co-located, EIA Says

October 12, 2021

by Peter Maloney
APPA News
October 12, 2021

Most of the battery storage expected to come online in the next five years will be co-located with a solar power plants, according to the Energy Information Agency’s (EIA) most recent annual electric generator report.

Of the 14.5 gigawatts (GW) of battery storage planned to begin come online between 2021 and 2024, 9.4 GW, or 63 percent, will be co-located with solar power, the EIA said. Another 1.3 GW of battery storage will be co-located at sites with wind turbines or fossil fuel-fired generators, such as natural gas-fired plants. The remaining 4 GW of planned battery storage will be located at standalone sites.

The EIA’s generator report collects information about existing and planned generation projects that are 1 MW or greater.

According to historical EIA data, most of the battery storage deployments in the United States have been done on a standalone basis. Of the 1.5 GW of battery storage that was in operation at the end of 2020, 71 percent was standalone, and 29 percent was co-located with other power generators.

A combination of falling prices for lithium-ion batteries and rising levels of wind and solar generation is driving an increase in renewable energy projects that include battery storage, according to Lawrence Berkeley National Laboratory.

Batteries can offset the intermittent nature of renewable resources such as wind and solar power. Solar power, in particular, can be effectively paired with battery storage because of their relatively regular daily generation patterns, EIA noted.

Predictability works well with battery systems because they are limited in how long they can discharge their power capacity before needing to recharge. If paired with a wind turbine, a battery system could go days before having the opportunity to fully recharge.

The EIA also pointed out that battery systems co-located with renewable energy resources also can take advantage of the Investment Tax Credit available for solar projects.

EIA data also show that most standalone battery storage sites have been planned or built in power markets that are governed by regional transmission organizations (RTOs) and independent system operators (ISOs). Some RTOs and ISOs have market rules that provide revenue streams for energy storage projects, which encourages developers to site projects there.

Of the utility-scale battery systems announced due online between 2021 and 2024, 97 percent of the standalone battery capacity and 60 percent of the co-located battery capacity are in RTO/ISO regions, EIA said. Outside of RTO and ISO regions, over 90 percent of planned battery storage is scheduled to be co-located with a solar photovoltaic plant, EIA said.