- Energy Storage
- Battery Energy Storage
- Transmission and Distribution
New Nantucket Energy Storage Project Highlights Value of Transmission Deferral
The opportunity to avoid upgrading expensive and disruptive transmission lines has long been regarded as one of the key use-cases for energy storage. While this model has proven hard to exploit, a new battery project operating in Nantucket, Massachusetts is proving that energy storage is ready to take on transmission services. The 6 MW/48 MWh Tesla battery system is the largest operating in New England, and with 8-hour full power discharge, it is one of the longest duration lithium ion systems anywhere. According to local grid operator National Grid, pairing the battery system with a new diesel generator cost approximately $81 million, far less than the estimated $200 million to install new undersea power lines.
Although viable projects that defer transmission line upgrades with energy storage remain few and far between, this project in Nantucket illustrates the considerable savings possible for other islands. There are thousands of grid-connected islands around the world that rely on aging undersea power lines; many islands are seeing increasing electricity demand, which necessitates upgrading these highly expensive subsea lines. Energy storage provides an ideal tool to reduce an island grid’s peak demand and avoid replacing transmission infrastructure. And when not needed for peak shaving, storage systems can provide other services, such as balancing the variability of generation from local renewable energy sources.
Searching for Replicable Models
This new project in Nantucket is an important step in identifying replicable business models for energy storage projects to defer or avoid more expensive transmission investments around the world. In this case, the high cost of undersea power line installation makes the project pencil out; however, for terrestrial projects, more creative models may be required.
Many transmission deferral projects have adopted the moniker of virtual transmission, including a pioneering project now being built in France. French utility RTE is developing a network of three battery systems, each with 12 MW/24 MWh capacity, that are to be placed where transmission lines are congested. The utility plans to test these systems from 2020 to 2023 with the aim of avoiding the need to build new lines or upgrade existing ones while increasing amounts of solar and wind generation are added to the grid.
These virtual transmission models are especially promising for both physical islands and urban areas. While most urban areas have extensive existing transmission infrastructure, the costs to upgrade these systems are often extremely high due to real estate prices and potential property disruption. Many cities are also seeing continued demand growth and grid congestion, as renewable energy generated in more remote areas needs to be brought to urban load centers. The potential benefits of virtual transmission projects have been well-documented and new projects are being explored around the world, including in India, the US, Germany, and Australia.
One Piece of the Puzzle
Many of these projects can be categorized by another popular industry acronym, non-wires alternatives (NWAs). These projects are typically designed for urban areas to avoid grid infrastructure upgrades through the coordinated operation of distributed energy resources. In many of these projects, energy storage is one piece of the technology puzzle, alongside energy efficiency, demand response, and distributed generation. Grid operators around the world are quickly realizing the potential savings possible with NWAs. Guidehouse Insights, offers an in-depth review of these opportunities in a recent report, Non-Wires Alternatives Tracker 3Q19, which provides details on over 100 NWA projects currently underway in the US.