What Is Driving Cooperatives to Deploy Energy Storage?

The use of batteries to reduce peak demand charges may be one of the most clearly defined business cases for battery energy storage among electric distribution cooperatives in the U.S., according to a report released yesterday by cooperative bank CoBank’s Knowledge Exchange Division.

The report found that the main driver for adoption of battery systems among electric distribution cooperatives is load shaping.

“The ability to discharge a battery during times of peak demand reduces the demand charge the ED pays to its generation and transmission provider, potentially reducing the cost of energy for the [electric distribution cooperative’s] members,” the report said.

As coops continue to explore energy storage opportunities, they likely will find other ways to maximize the value of batteries, including, for example, using batteries to improve grid resilience for commercial and industrial customers that need guaranteed power.

The report said that deployment of battery energy storage systems among electric cooperatives in the lower 48 states is a relatively new trend. Here are six proposed projects among select cooperatives in the report:

  • Anza Electric Coop’s 0.5 to 2-MW/1 to 4-MWh lithium-ion battery for peak reduction and resilience in California, scheduled for completion this summer.
  • United Power’s 4-MW/16-MWh lithium-ion battery for peak reduction in Colorado, scheduled for completion this summer.
  • Connexus Energy’s 15-MW/30-MWh lithium-ion battery for peak reduction in Minnesota, scheduled for completion this year.
  • Flathead Electric’s 3.3-kW/10-kWh Tesla Powerwall for peak reduction in Montana, as part of an ongoing pilot.
  • Kit Carson Electric Coop’s lithium-ion or flow battery project with an undetermined power capacity for peak reduction in New Mexico, scheduled for completion this year.
  • Vermont Electric’s 1-MW/4-MWh lithium-ion battery for peak reduction in Vermont, scheduled for completion this year.

According to the report, coop owners may seek a service agreement with an energy storage developer to help shift risks of ownership to the developer.

“For a typical service agreement, the coop will provide direction to the battery owner on when to charge and discharge the battery,” the report said. “The battery owner does not own the stored energy, but charges the coop a fee every time they call on the battery to discharge.”

Lead image credit: CC0 Creative Commons | Pixabay

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Jennifer Delony, analyst for TransmissionHub, started her career as a B2B news editor in the local and long-distance telecommunications industries in the '90s. Jennifer began covering renewable energy issues at the local level in 2005 and covered U.S. and Canadian utility-scale wind energy as editor of North American Windpower magazine from 2006-2009. She also provides analysis for the oil and natural gas sectors as editor of Oilman Magazine.

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