Software upgrade to old sodium battery marks shift in AEP’s storage strategy
Tapping into new revenue streams for energy storage is key to its economics, multiple studies and consultants have said. For one utility, a simple software upgrade could prove key to finding those streams.
American Electric Power (AEP) recently upgraded the software to allow one of its energy storage facilities to tap a new source of revenue. In the upgrade, Greensmith Energy layered battery management software on top of its existing inverter control software to allow a West Virginia battery installation to be used for frequency regulation.
For AEP that upgrade represents something of a sea change in how the utility, one of the biggest in the country, treats energy storage. The Balls Gap installation is a 2 MW, 14 MWh sodium-sulfur (NaS) system in Milton, W.V., originally installed in 2009 to provide backup power and defer investment in a new substation.
“When we put in the battery, we didn’t think we’d get as much deferral as we did,” Thomas Weaver, manager of distribution system planning for AEP, said.
The project helped AEP defer an approximately $15 million investment in a new substation from 2008 until 2017. The battery system also has the ability to provide power for 700 customers for up to seven hours so that AEP does not have to cut service to customers when it works on distribution lines. On one occasion, the system was able to provide electrical service to 25 customers for 24 hours.
That has been the main driver for the battery systems AEP has deployed to date. In 2002, AEP ran the first demonstration project of a NaS battery system in the U.S. That system was designed to test batteries for peak shaving. Since then, the utility in 2006 installed a 1 MW, 7.2 MWh NaS system in Charleston, W.V., to defer capital investment in a distribution system and in 2009, in addition to the Milton project, it installed similar systems in Churubusco, Indiana, and Bluffton, Ohio. And in 2010, AEP installed a 4 MW, 24 MWh NaS battery system in Presidio, Texas, that provides capital deferment, reliability support and islanding capability for a remote town close to the Mexican border.
When AEP eventually began to move forward with the deferred substation in Milton, it realized that battery, which is within the PJM Interconnection territory, could serve another purpose. Working with Greensmith, a company AEP invested $5 million in back in 2015, the utility layered on another level of software and is now selling frequency regulation service to PJM from the batteries in Milton.
AEP is also investigating if it should adopt a similar strategy with its battery facilities in Indiana and Ohio, said Weaver.
The utility is also exploring opportunities for its battery facility in Presidio, but because the regulatory regime is different in Texas, Weaver said further public discussion would be “premature.”
“We are looking at opportunities to use what we have learned,” said Weaver. One of the lessons, he said, is that one value stream is not enough to justify an investment in a battery system. “You have to pancake value streams.” Weaver said due diligence is currently under way to look at how energy storage can fit in with other AEP projects.
“When you can do one application today and switch in the future to another, that is incredibly powerful in a very capital intensive industry,” Ram Sastry, vice president of infrastructure and business continuity at AEP, said in a recent webinar hosted by GTM Research.
Read full article at Utility Dive
