Utilities see benefits in energy storage, even without mandates
The fact that California’s three investor-owned utilities were at the top of the Smart Electric Power Alliance’s recent rankings is not surprising, but the presence of utilities in Indiana and Ohio is notable.
California has been a leader in energy storage, with a 2010 law that requires the state’s IOUs to procure 1.3 GW of storage capacity by 2020 and then a 2016 law requiring each IOU to procure another 166 MW of storage.
There has been no similar legislative push in either Indiana or Ohio and yet Indianapolis Power & Light and Duke Energy Ohio were third and fifth, respectively, in SEPA’s rankings of utilities that connected the most energy storage to their systems in 2016. IPL installed 20 MW in 2016, and 16 MW were connected to Duke Energy Ohio last year.
The rankings do not tally how much energy storage a utility built or owns, but how much was connected to their system. So while IPL built and owns the storage facility in its territory, Duke does not own the 16 MW of storage that connected to its system in 2016. Similarly, while California’s utilities are permitted to own some energy storage assets, they do not necessarily own all the storage facilities connected to their systems.
Measured by energy (MWh), IPL ranked fourth with 20 MWh, and Duke Energy Ohio ranked eighth with 6.1 MWh.
Ranked by energy storage watts per customer, IPL and Duke actually beat the California utilities, ranking fifth and sixth with 42 W/customer and 23 W/customer, respectively.
Duke ready for next step
Given Duke’s plans, the utility is likely to stay high in the rankings and be more of a driving force in development. “Battery technology has matured, and we are ready to take the next step,” Duke spokesman Randy Wheeless told Utility Dive. “We can go to regulators and say this makes economic sense.”
Duke began exploring energy storage in 2012, and until now most of its energy storage efforts were focused on commercial projects in competitive markets where it was possible to earn revenues. Those included its 36 MW Notrees battery storage project developed in partnership with the Department of Energy in 2012 that provides frequency regulation for the Electric Reliability Council of Texas market and two 2 MW storage projects at its retired W.C. Beckjord plant in New Richmond, Ohio, that sells ancillary services into the PJM Interconnection market.
On the regulated side, most of Duke’s storage projects have had “an R&D slant to them,” Wheeless said, but “we are moving beyond the R&D concept in our regulated territory and are looking at storage more as a regulated asset.”
“We have done the demos, and they have proved out,” Wheeless said. Storage may not be ready for prime time everywhere, he said, but in certain locations, especially where it can it can be used to do more than one thing, it can make sense.
Wheeless said Duke would be making “a number of energy storage announcements in the next few months in our regulated states.” He could not provide details on those projects.
More flexible resources
Location can be a determining factor when building a storage facility. For IPL, serving the wholesale market was a driving factor in the rationale to build its 20 MW, 20 MWh Harding Street storage facility in Indianapolis.
IPL built the project to address a need for more flexible resources in light of “recent changes in our resource mix,” including decreasing coal-fired generation and increasing renewables and natural gas-fired generation, Joan Soller, IPL’s director of resource planning, told Utility Dive in an email. The storage facility is used to provide primary frequency response necessary for grid stability.
The Harding Street storage facility went into service in May. It was the first energy storage project in the Midcontinent ISO. But the regulatory path in MISO is not as clear as it is in PJM. In November, IPL filed a complaint with the Federal Energy Regulatory Commission, asking the regulator to find that MISO’s rules for energy storage are deficient and should be revised.
Soller said IPL has “no imminent plans to install energy storage in the future but will continue to monitor battery costs and capabilities as potential resources in future Integrated Resource Plans.”
California legislative and regulatory push
In California, energy storage did not have to wait for regulations to catch up with technology. With legislative and regulatory mandates as a push, California’s IOUs took high places in SEPA’s rankings.