Duke Energy has promised major investment in energy storage for its Carolina territory. It took another step toward substantiating that promise by designing a battery project to back up a South Carolina community center.

The 5-megawatt/5-megawatt-hour project, announced Monday, does not stand out among the much larger projects underway elsewhere in the country. Its significance lies instead in illustrating how a regulated utility builds up proficiency in battery storage. Many utilities now acknowledge storage will provide great value to the grid, but few have built it at scale.

The first step is accepting the body of evidence that quantifies the usefulness of storage for things like renewables integration, deferring wires infrastructure upgrades, delivering peak capacity and rapidly modulating frequency and power quality.

Duke took that step in a big way, deciding in its 15-year resource plan that 300 megawatts of storage, and possibly even more, would benefit customers. The public has little recognition of megawatt capacity, but the company helpfully translated that into a rough estimate of cold, hard cash: $500 million.

That would be quite a jump from the kilowatt-scale test projects Duke has actually completed in its Carolina service territory. But the utility has been pushing forward incrementally, winning regulatory approval for a 4-megawatt battery to power a solar microgrid in the remote western mountains of North Carolina and a 9-megawatt system to improve grid reliability in Asheville.

“We are also strategically making energy storage investments where they can deliver value for grid operations and as backup power for critical services provided in our communities,” Duke Energy spokesperson Ryan Mosier said in an email Monday.

Value-stacking

In Anderson, South Carolina, 30 miles southwest of Greenville, the battery will support the Anderson Civic Center, which operates as an emergency shelter and command center during hurricanes and other crises. The battery capacity should keep the center running for 30 hours without grid power, based on typical consumption, the utility said. Subject to regulatory approval, it could be up and running by early 2021.

Grid outages are rare, though. Most of the time, Duke will dispatch the battery as a typical grid asset for tasks like frequency regulation and peak load-shaving.

This amounts to a utility-driven form of value-stacking based on the locational value of the site.

“Our customers will still realize the same grid benefits had the project been sited at a substation, but now the Anderson Civic Center can also realize backup power benefits by hosting the project on their property,” Mosier said. “These backup power benefits would not have been possible had we located the project elsewhere.”

Duke’s customer base will pay for the project, Mosier confirmed, because it will serve regular grid operations “more than 99 percent of the time.” That makes it a very attractive backup option for the civic center, which is providing a zero-cost land lease to Duke to install the system.

In deregulated markets, customers like universities, government and businesses pay competitive providers for backup power; Duke’s competitive arm has supplied microgrid-as-a-service projects in other states.

In regulated markets, utilities like Duke take full responsibility for grid operations; if they can justify a grid investment and additionally offer a local customer backup power for free, that’s their prerogative.

Working toward bigger projects?

Regulated utilities occupy a spectrum of energy storage involvement. On the hands-off side, there are companies with no announced interest in the technology, followed closely by the “let’s study it to see if it works” cohort.

Duke has advanced past that stage and committed to much more, but it has not shown an interest in particularly large facilities. At the extreme end of the spectrum, Florida Power & Light, for instance, jumped to 409 megawatts in an effort to replace retiring gas plants. Arizona Public Service plans on pairing all of its major solar plants with batteries to shift their capacity beyond daylight hours.

It’s possible that Duke works up to its 300-megawatt commitment with several dozen local resilience projects like this. Or these initial projects lay the groundwork to convince regulators to sign off on bigger and bolder ones down the road.

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