By Steve Haner

Based on current pricing for the present-day energy storage projects, legislation pending at the Virginia General Assembly could cost ratepayers of the two largest electric utilities between $18 billion and $29 billion over the next 20 years.
That capital cost, based on the current $300,000 to $500,000 price per megawatt hour for the massive utility scale battery projects, may not include the financing costs that always accompany such large construction projects. Both utilities would expect their standard annual profit margin on the investments, as well. What regulators call the revenue requirement will dwarf the numbers mentioned above. It is the revenue requirement that drives the cost on customer bills.
And for all that money the utilities would not create a single electron of additional electricity. The batteries envisioned simply store energy created by a real generation plant, releasing it to the grid when needed (such as when the sun is not producing solar electricity, or the wind has deserted the ocean turbines.) The cost of producing the electricity they store is on top of the cost of the batteries themselves.
The Senate version (Senate Bill 1394) of the legislation passed unanimously, but neither it nor the House version (House Bill 2537) are fully through the Assembly process. There is time to face the reality of what this would cost. No official fiscal impact statement of any kind has been produced by the State Corporation Commission or the Commission on Electric Utility Regulation. That is because not one of 140 legislators has even asked.
In an earlier article discussing the battery storage mandates, the figure of $500,000 per megawatt hour (MWh) in capital costs was used and was promptly challenged by an anonymous renewable energy fan in the comment string. That person is probably not aware of the cost of some smaller battery projects already approved by the Virginia State Corporation Commission, which make $500,000 per MWh look cheap.
(more…)













