Texas Commission to Tackle Battery-Grid Integration, a Contentious Power Issue in a Unique State
(TNS) — The Public Utility Commission of Texas plans to write the state’s first rule book for utilities that want to use batteries to store and deliver power to the grid, a move that could potentially trigger changes to how electricity is produced, delivered and regulated in the state.
The commission’s rule-making process could open the floodgates for utilities to use large grid-scale batteries to avoid shortages that drive power costs higher and spread a technology long considered vital to making Texas’ intermittent wind and solar resources more reliable and larger components of the state’s power mix.
That future, however, is unlikely to come easily. In a separate decision on Thursday, the commission rejected a two-year-old proposal from one of the state’s largest utilities, AEP Texas, to use two batteries to back up overloaded transmission systems in two small Texas towns — a plan opposed by a merchant power industry likely to a play key role in developing any rules governing the use of batteries…
The commission, in turning away AEP, echoed the arguments of the state’s power plant owners, citing a lack of a regulatory framework for battery use and concerns that the project would dismantle Texas’ unique competitive power market.
“Batteries are coming — there is no question,” said Brett Kerr, a spokesman for the Houston-based merchant power company Calpine Corp., one of the companies that opposed AEP’s project. “Let’s all get together and come up with a way we can best integrate them into the market.”
Batteries have long been viewed as a game changer for the power grid, a technology that would make it easier to manage supply and demand, smooth out price spikes in wholesale markets, lessen the need for expensive transmission projects and accelerate the growth of wind, solar and other renewable energy sources. Battery technology has continued to improve and, most importantly, get cheaper.
Prices for utility-scale lithium-ion batteries have dropped 80 percent since 2009, according to testimony filed with the PUC. And as batteries become more affordable, electric grids around the country have been forced to adapt, most recently in California, where the state adopted rules allowing multiple uses for batteries.
In Texas, there is at least one 4.8-megawatt battery attached to a transmission system in the border town of Presidio. In West Texas, E.On, a German renewable energy company, built two battery systems last year to support a wind farm.
Batteries are anything but traditional — they can store and generate energy, and don’t neatly fit into the lines drawn in Texas between deregulated power generators and regulated power distribution companies. Battery installations at private homes with rooftop solar systems could mean residents take less power from the grid, undercutting utilities.
And batteries attached to wind and solar farms would make those notoriously fickle sources of energy able to provide power when the wind isn’t blowing or the sun isn’t shining, to the detriment of merchant power companies.
“Batteries are the common-sense response to the renewables that we are going to see increase in our market,” Texas Public Utility Commissioner Brandy Marty Marquez said Thursday.
AEP proposed its battery project in September 2016. The company asked to install two lithium-ion batteries near the towns of Paint Rock and Woodson, each home to a few hundred people and hundreds of miles away from any major city. In Woodson, where AEP Texas serves 217 customers in the North Texas community, a hard-to-access distribution line that traverses pastures and fields means that outages are frequent and last for an average of eight hours — three times longer than outages for any other AEP customers in that region.
In Paint Rock, a West Texas town named for ancient pictographs painted by Native Americans on a rock outcropping, power demand for AEP’s 273 customers overloads their substation.