North Carolina Utility Uses APPA Grant To Test Peak Shaving Batteries

by Peter Maloney
APPA News
February 24, 2022

Greenville Utilities Commission in North Carolina has added a 1-megawatt (MW) battery energy storage system (BESS) to its grid using a Demonstration of Energy & Efficiency Developments (DEED) grant from the American Public Power Association.

Greenville Utilities was looking for ways to reduce its coincident peak load. Historically the public power utility had used peaking plants, such as a reciprocating engine, for peak shaving. But under an agreement with Duke Energy Progress and North Carolina Eastern Municipal Power Agency (NCEMPA), Greenville Utilities has limits on how much load side generation it can add to its system.

“The allocation was set in the 1990s and was used up; we were looking at other alternatives,” John Worrell, Greenville Utilities’ director of electric systems, said.

Batteries do not count as generation, but Duke has pushed back on that view. In September 2020, the Federal Energy Regulatory Commission (FERC) sided with NCEMPA, allowing the joint action agency to use energy storage devices to reduce demand.

The pilot project was a good way to test the performance and economics of an energy storage system and compare it to the performance of a peak shaving engine, Worrell said. Greenville Utilities received financial assistance from the DEED program, which awarded the utility a $125,000 grant toward the total budgeted $1.6 million cost of the pilot project.

Construction on the project began in June 2020 and the battery came online in November 2020. The energy storage system includes a 1,000-kilowatt (kW), 2,250-kilowatt hour (kWh) lithium iron phosphate batteries.

The project required a year’s worth of data, so the pilot closed out last December. The DEED report was filed at the end of last month. The battery system, however, continues to operate and perform peak shaving duties for Greenville Utilities.

Overall, the project was a success, Worrell said, though there were some issues with batteries overheating, which in some instances restricted their availability during some peak periods. Those issues are being worked out with Powin, the manufacturer of the batteries, Worrell said.

The 12 months of data collected on the battery energy storage system showed that it consumed 106,191 kWh comprised of 33,921 kWh of auxiliary load and 72,207 kWh from charging events. The battery system discharged an average monthly peak supply of 965 kW with a max of 999 kW. A 1,000-kW discharge was recorded at 15-minute intervals but was not sustainable during a full hour as preferred.

Greenville Utilities serves about 71,000 electric customers with an average non-coincident peak demand of 301,500 kW and a coincident peak demand of 255,900 kW, consuming approximately 150 gigawatt hours monthly.

In terms of load management, the battery system operated 54 times for a total duration of 94.5 hours. The average duration per operation was approximately 1.76 hours with a maximum of 2.13 hours.

During the coincident peak hour, the battery system was able to discharge during 11 of 12 hours, resulting in an average monthly coincident peak load reduction of 779 kW with a maximum load reduction of 999 kW. The overheating issue affected total potential peak shaving capability for the months of May, June, August, and September.

Nonetheless, because it reduced monthly coincident peak demand, the battery system was able to avoid $218,743 in demand charges. The total expenses incurred operating the battery system were $43,414, resulting in an annual net savings of $175,328 with the ability to save approximately 62.4 percent of the total potential avoided demand charges.

The performance of the battery system ranked third among Greenville Utilities’ 12 peak shaving generators of various sizes in providing a high saving potential, according to the DEED report. The top ranked peak shaving generators were able to achieve 70.3 percent of total potential avoided cost. However, if the battery system’s average coincident peak load reduction of 779 kW were improved and equivalent to the average peak supply of 965 kW, the battery system would have ranked first with a saving potential of 82.2 percent, according to the DEED report.

Greenville Utilities said it plans to continue operating the energy storage pilot project for peak shaving applications because of the benefits it has provided in avoiding monthly coincident peak demand costs.

The utility also plans to continue to analyze the project to prepare for future projects as they arise. So far, Greenville Utilities is not considering installing another battery storage system. It is considering and has under discussion an energy storage tolling agreement.

Greenville Utilities did very well with the cost of its battery system, but that could be more difficult to replicate in the future because of rising costs, Worrell said. In addition, the cost of off-peak power to charge the batteries could go up as natural gas prices rise.

Alternatively, under a tolling agreement, a third party installs and owns the battery and the utility pays a set fee for peak shaving services. The agreements are usually based on coincident peak charges.

“If the toller takes the risk and we get a locked-in demand charge, we can hedge our peak demand over time, as long as the coincident peak from our supplier does not drop,” Worrell said. The agreement avoids the capital costs of installing a battery storage system while providing certainty of savings on coincident peak demand charges, he said.

Overall, Worrell said he would recommend using battery energy storage to reduce demand charges. Thanks to the pilot program, “we now know battery storage is a viable option with the same risks as a generator and just as reliable,” he said.

Members of APPA’s DEED Program can visit the Greenville project’s DEED Project Library page for access a useful Excel-based calculator which compares the financial feasibility of installing future BESS and RICE for peak-shaving applications, useful datasets containing hourly- and quarter-hourly performance data for Greenville’s BESS, photos, a spec sheet, and the full final report.

Greenville Utilities is a publicly owned utility in Pitt County that provides electric, water, sewer, and natural gas services to the City of Greenville and 75 percent of Pitt County. It is also the largest member of NCEMPA.