Dominion Seeks First Battery-Storage Investment

Battery storage racks used in a data center.

Dominion Energy has filed with the State Corporation Commission for approval to invest in 16 megawatts of battery-storage pilot projects costing $33 million. As the company expands its solar fleet, currently the 4th largest of any utility holding company in the country, Dominion said, it is looking for “new and innovative ways” to store renewable energy and maintain reliable electric service.

“Energy storage is critical to providing continued reliability for our customers as we expand our renewable portfolio,” Mark D. Mitchell, vice president-generation construction, said in a press release. “Battery storage has made significant strides in recent years, in both efficiency and cost. These pilot projects will enable Dominion Energy to better understand how best to deploy batteries to help overcome the inherent fluctuation of wind and solar energy sources.”

Battery storage could become an alternative to traditional upgrades of grid equipment such as transformers, added Joe Woomer, vice president-grid & technical solutions. “Battery storage has the potential to serve a key role in maintaining reliable service for our customers as we work to integrate renewables and improve grid resiliency.”

Two battery systems totaling 12 megawatts at the Scott Solar facility in Powhatan County will demonstrate how batteries can store energy from solar panels during periods of high production and release energy when load is high or generation is low. A 2-megawatt battery at an Ashland substation will explore how batteries can improve reliability and substitute for transformer upgrades. A 2-megawatt battery at a New Kent County substation will test how batteries can help manage voltage and loading issues caused by reverse energy flow.

In other news, Dominion issues a Request for Proposals for up to 500 megawatts of solar and onshore wind generation.

Bacon’s bottom line: Maintaining grid reliability is essential as Dominion increases its commitment to intermittent sources of energy such as solar and wind power. Battery storage is commonly viewed as an essential technology for offsetting fluctuating generation. One big issue is how successfully batteries can be integrated into the grid. Another is how much they will add to the cost. While solar and wind now can generate electricity at a lower cost than fossil fuels or nuclear, the necessity of coupling intermittent energy sources with battery storage elevates the cost of managing the distribution grid. Dominion needs to ramp up the learning curve for working with batteries, so I expect imagine that the SCC will approve these projects despite the significant cost.

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8 responses to “Dominion Seeks First Battery-Storage Investment

  1. Another element of the 2018 Ratepayer Bill Transformation Act. While the SCC may once again have it’s hands tied by the General Assembly, let’s hope some serious economic analysis is done on this $2 million per megawatt investment. In comparison the offshore wind was hundreds of millions for 12 MW. With the offshore wind the SCC had no choice but to approve it, but pulled no punches in the cost estimates and lack of pay off for customers.

    I think offshore wind is a more mature technology, and a better case can be made that battery needs more analysis and demonstration. But are the ratepayers getting any real value for their money? Are these small localized facilities that basically expand capacity slightly for the affiliated renewable plants the best approach? Let’s all watch and see.

    The case no is PUR-2019-00124.

    Best news in the filing: No new rate adjustment clause: “The pilot program shall provide for the recovery of all reasonable and prudent costs incurred under the pilot program through the electric utility‚Äôs base rates on a nondiscriminatory basis.” Of course that’s $33 million or more out of any possible refunds come 2021….won’t be paid by stockholders, no no no….

  2. It is very misleading when Dominion is identified as having the 4th largest solar fleet when nearly all of those facilities are outside of Virginia. These batteries would have value only in Virginia.

    The batteries will not expand capacity for renewable resources. They will shift the output from the time of maximum solar output (mid-day) to the period of maximum demand (evening in the summer) with some loss due to the charge/discharge cycle. They can also provide many other services, as Jim’s article notes.

    The way to learn about the value and operational benefits of these devices is to give them a try. I assume Dominion shopped carefully to get a good value.

    Currently, the best way to use batteries is for commercial and industrial customers to use them to reduce their peak demand and lower their demand charges. This would be immediately cost-effective in many cases. Not so good for Dominion though given the way they are presently paid.

  3. I think calling something that ratepayers will pay for an “investment” is a far stretch any way you cut it.

    It’s a no-skin-in-the-game scheme that Dominion will spend on the same way anyone would when it’s not their money.

    “investment”? in a pigs eye!

  4. Larry, if you take that viewpoint you call into question every project that Dominion has undertaken. They have no skin in the game. Putting assets in the ratebase guarantees a profit whether the project is covered in base rates or in a Rate Adjustment Clause. The excess profits that accrue from that has been exempted from regulatory review since 2013, at least until 2021. And that has a cap on it, as I recall.

  5. Would someone mind explaining what a 2-megawatt battery is?
    I understand what a 2-megawatt-HOUR battery is: it’s a battery that can supply 2 MW for one hour. Then it runs out. If you want power for a second hour, you need a second battery.
    What am I missing?

    • Fair question, something I assume will be spelled out (I haven’t read the filing). A 1000 MW rated power plant operating at 100 percent capacity produces a steady output of that much energy, for a minute or an hour or a day or however long, right?. How long such a battery would output a full 2 MW is the key question, isn’t it? The real engineers may pipe in…

  6. Batteries are described both in terms of capacity (MW) and energy (MWh). The energy is usually described at the full discharge rate. For example, most utility-scale batteries can discharge their full charge over about about 4 hours. So a 1 MW battery that can discharge at full capacity for four hours is typically described as a 4 MWh battery.

    Batteries can be used in many ways: for storing energy when it is cheap and discharging it later when energy is more expensive, for frequency or voltage level control, etc.

    Many of the utility-scale batteries in operation now are used to even out the output from renewables and are showing that they are constantly charging and discharging to help keep a constant level of energy, frequency and voltage in the power system. This has been a challenge for over 100 years and the batteries are doing a great job of dealing with it. In this situation they discharge at less than full power, recharge when excess energy needs to be absorbed and provide grid support throughout the day.

    On Kaua’i, batteries are used to store the output from a 13 MW solar array and discharge the energy when it is needed to deal with the evening peak. The batteries are rated at 53 MWh (roughly 4 times 13 MW). There is a lot of sunshine in Hawaii (I lived on Kaua’i and worked with the utility to establish the principles for using more solar). This installation offsets the need for diesel-fired generators to help meet peak demand.

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