Cleantech Market Intelligence
Smaller Utilities Explore Energy Storage-Enabled Solutions
While California’s investor-owned utilities have received the most media attention for their high-profile energy storage procurements, smaller municipal and cooperative utilities around the country are beginning to recognize the value that energy storage can provide. The services that energy storage systems (ESSs) can provide these smaller utilities may differ from larger organizations, as will their procurement processes.
One notable difference is that municipal and cooperative utilities are generally able to make much quicker decisions regarding investments, as they are not as burdened by regulatory oversight and financial commitments to shareholders. Many of these organizations have been exploring the diverse benefits that energy storage and microgrids can provide, particularly as renewable energy developments become more common for smaller utilities. It is estimated that member-owned electric cooperatives in the United States have nearly 240 MW of solar PV capacity online or in development, which may bring about the need for energy storage to effectively integrate these resources and ensure grid stability.
Problems to Solve
Much of the interest from publicly owned utilities in energy storage and microgrids stems from the generally large geographic area that these entities control. In addition, many customers are located at the end of long feeder lines in relatively remote areas. As utilities see load growing at the end of these isolated circuits, issues around relatability and the need for significant new investments will arise. This challenge is magnified by the fact that many public utilities do not own generation assets, making it different to control frequency and voltage on their system when the generators feeding power are potentially hundreds of miles away. Increasingly cost-effective energy storage is emerging as an ideal solution to these problems by allowing utilities to defer investments in new infrastructure, enabling greater control over their networks and improving reliability for remote customers.
Municipal utilities are able to solve challenges using energy storage either distributed throughout their service territory or at a single facility. For example, the Eugene Water & Electric Board in Eugene, Oregon is developing a solar PV and energy storage microgrid utilizing a 500 kW lithium ion battery from developer Powin Energy. The system will ensure the operability of critical facilities in the event of an outage as well as reduce the expensive peak demand energy the utility buys on wholesale markets. Eventually the utility may look to sell excess capacity into energy markets themselves. An alternative model is being tested by the Glasgow Electric Plant Board in Kentucky, which will deploy distributed ESSs at the homes of 165 customers in partnership with Sunverge. The systems will charge at night when costs are low and discharge during the day or during peak demand, reducing the need to supply additional power and lowering overall costs. This network of ESSs will also provide detailed, real-time insights about the local grid’s performance and ensure customers have power in the event of an outage.
These programs demonstrate the various ways that smaller utilities can enjoy the benefits of energy storage while improving service for their customers and integrating local renewable resources. As energy storage costs continue to fall, there will be numerous opportunities for the nearly 3,000 publicly owned and cooperative utilities in the United States to benefit from the technology.