In late September, Duke Energy announced that it would install two battery energy storage systems in Western North Carolina - a 9-megawatt lithium-ion battery in the City of Asheville and a 4-megawatt lithium-ion battery system in Madison County. These are the first battery storage projects for Duke Energy that are on a wide-scale, opening up what is seen as an important step in grid modernization. The projects are part of the larger $1 billion Western Carolinas Modernization Project.
So why has the market finally opened for energy storage in North Carolina despite the many pilot projects around the state (i.e., the Rankin Battery Storage Project at the Rankin Substation in Gaston County, NC; the Marshall Battery Storage Project at the Marshall Steam Station in Catawba County, NC; or the McAlpine Community Energy Storage Project located in a residential neighborhood in Charlotte, NC)? One reason North Carolina only had pilot projects up until now is the vertically integrated/regulated utility market in the Southeast. Utility regulators have traditionally had difficulty determine the value of energy storage because it doesn’t fit neatly into the traditional categories of generation, transmission, distribution or some other rate-based asset. In unregulated markets – with independent system operators -- a clear economic value is much easier to predict and measure.
However, with these two new battery storage projects proposed by Duke Energy, this is the first time that the NC Utilities Commission will be faced with a utility making specific claims that energy storage is cost-effective and provides enough benefits to justify including it in the rate base. The projects will be filed with the NC Utilities Commission in early 2018. NCSEA’s Diane Cherry noted these points in a recent article in Charlotte Business Journal, saying that with the announcement “we are in a different world now”.
NCSEA has been working with the UNC Collaboratory for the past two months raising money for the NC Energy Storage Study to determine what energy storage can do that is not currently being done; what policies and regulatory rules price the values of energy storage; and its overall economic potential. The hope is that the study will address any stakeholder “fears” about energy storage such as whether rates will increase, whether it will curtail traditional energy asset deployment, whether it is still unproven and whether stakeholders will be held accountable for any failure.
NCSEA will continue to provide updates on the NC energy storage study and other programmatic work. Next week, NCSEA will be featured in an energy storage summit in Raleigh, NC in both a stand-alone keynote and on a panel with individuals from Southern Company, AES, and the Tennessee Valley Authority. In preparation for the conference, NCSEA summarized the total number of energy storage projects for the entire Southeast, including North Carolina. A year from now it is expected these numbers will be much greater.