North Carolina Examines Energy Storage

Paul Davis
Director of Business Intelligence

As renewables, distributed generation and micro-grids begin to alter the power supply landscape, many regions and states are looking closely at energy storage as a critical component of the new electricity paradigm.  A leader in adopting renewable generation, North Carolina just released a very interesting and detailed study outlining possible short and long-term strategies for energy storage.  According to the Solar Energy Industries Association (SEIA), the state ranks behind only California for adding the most solar energy capacity over the past two years, thanks to legislation mandating a Renewable Energy Portfolio Standard (REPS) requiring utilities to diversify their portfolios by increasing the percentage of renewable resources.

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The Study

Recognizing the critical role of energy storage in this equation, a team of university experts in North Carolina has published a study for its General Assembly in response to House Bill 589, signed into law in July 2017, mandating an investigation to identify opportunities to deploy electricity storage that benefits the state’s consumers. 

The comprehensive report, “Energy Storage Options for North Carolina” focuses on the net benefits associated with different storage technologies in, addition to: 

  • Providing an excellent overview of the current energy storage market in the U.S.
  • Identifying rationale for grid services and applications that can be fulfilled with energy storage
  • Addressing the job implications and consumer benefits associated with storage deployment

Currently, battery storage in North Carolina is minimal with only 1 MW deployed.  Ice storage is more prevalent while pumped-storage hydro (although located in neighboring states) is by far the largest storage technology in the Carolinas.  Duke Energy recently announced plans to invest heavily in battery storage over the next 15-years by adding roughly 300 MW of capacity, enough to replace about two large natural gas peakers. 

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Summary of Findings

The study found that current Lithium-ion battery prices are not cost effective, though expected price declines over the next 10-12 years will make this a viable option for energy time shifting, peak capacity deferral and other grid services.  Pumped storage hydro and compressed air energy storage (CAES) are already cost effective at today’s prices although both are very site dependent.

The report also acknowledges the rapidly changing nature of the storage market and presents results very transparently using publicly available models along with PJM and NY-ISO power prices and regulation data.  

The study research team developed a definition and scope for its analysis of energy storage as “a system used to store electrical, mechanical, chemical, or thermal energy that was once electrical energy, for use in a process that contributes to end-user demand management or grid operation and reliability.”  The team went further and identified areas for future investigation that tie directly in with the concept of energy storage, but were beyond the scope of the study.  These include:

  • Electric Vehicle Deployment – EVs are adding significant new load to the grid but also present many grid management advantages in terms of bulk energy and peak capacity time shifting. 
  • Demand Response – providing consumers the incentive to alter consumption with time-of-use rates to reduce peak usage is another way to reduce the need for peaking plants and transmission expansion.

“North Carolina’s power sector faces a rapidly increasing penetration of renewable energy as well as economic and environmental pressures to decrease coal-fired electricity production,” the report states. “We believe that now is the appropriate time to consider the role that energy storage may play in the state’s future power system. Energy storage can help ensure reliable service, decrease costs to rate payers, and reduce the environmental impacts of electricity production.”

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PCI’s Position

PCI is developing a battery optimization module in our GenTrader solution that will enable portfolio managers and planners to assess the impact and value of batteries to the fleet.  PCI has an office in North Carolina and works closely with Duke Energy, a long-time user of GenTrader for portfolio and hydro plant optimization.  PCI’s product and market experts are ready to help your organization navigate the turbulent waters ahead.