Final Energy Storage Study Released

On December 3rd, North Carolina State University released the long-awaited Energy Storage Options for North Carolina (also known as, the Energy Storage Study) mandated by HB 589. The year-long study “addressed how energy storage technologies may or may not provide value to North Carolina consumers” and “the feasibility of energy storage in North Carolina, including services energy storage can provide that are not being performed currently.”   

The report analyzed several categories of energy storage services including end use services, which incorporates behind the meter application for residential, commercial and industrial customers; distribution services such as peak shaving and reliability enhancement; transmission services such as relief of transmission congestion; and finally, generation and resource adequacy services such as frequency regulation. The study considered a set of storage technologies including lithium ion batteries, thermal energy storage such as ice storage, and mechanical storage such as flywheels. A cost-benefit analysis was conducted for each technology to determine where storage can add value among the range of energy storage services listed above. 

Technical Results 

With that as a backdrop, there are several important results from the study based on the technical analysis: 

• Among all services studied, frequency regulation provided the highest net benefits and the best near-term opportunity for energy storage; 

• Lithium ion batteries are currently cost effective in reducing commercial and industrial coincident peak and time of use charges; and, 
• Price declines by 2030 will make lithium ion batteries available to provide peak distribution capacity deferral and peak shaving at the substation level. 

Finally, the authors believe it is possible to exceed 1 GW of storage capacity in North Carolina by 2030 depending on the price of lithium ion batteries.   

Energy Storage Policies 

North Carolina’s energy storage capacity is also dependent upon whether the state decides to adopt energy storage policies to bolster its deployment. The study considered three types of policies: prepare, facilitate, and accelerate. Each of these policies and the recommendations for options are provided below. 

Prepare: policies which aim to help address potential gaps or areas of uncertainty that might otherwise hinder the deployment of cost-effective energy storage. Specific policies include: 

• Update and clarify planning provisions  
• Update and clarify the definition and ownership of storage 
• Evaluate net metering rules in relation to the utilization of storage 
• Update interconnection rules  

• Provide guidance for the updating and adoption of local codes and permitting standards 

Facilitate: policies focused on helping either increase the value or decrease the cost of energy storage in the near-term. Specific policies include: 

• Develop competitive procurement process to monetize storage services 
• Develop a standard offer program to monetize services provided by smaller projects  
• Develop new tariff structures  

• Create an expedited or streamlined interconnection process for behind-the-meter systems 
• Promote data access and transparency  
• Develop a targeted or expanded renewable energy portfolio standard (REPS) cost-recovery funding stream  
• Establish a procurement goal  

Accelerate: policies which would substantially increase the pace of energy storage deployment in the state. Specific policies include: 

• Develop storage-specific incentives  
• Incorporate storage within the REPS law 
• Develop a clean peak standard 
• Establish a procurement standard 

On December 20th, NCSEA’s Energy Storage Working Group will consider which policies should be pursued and how energy storage might be integrated into the NC Clean Energy Plan (which is required under Governor Cooper’s Executive Order #80). 

As the study notes, “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.” NCSEA agrees, and we are hopeful for what 2019 may bring.