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National Grid and PNNL Collaborate to Capture Full Value of Grid Energy Storage

Oct. 30, 2019
National Grid and PNNL join forces to build a more resilient, reliable, flexible, and cost-effective electricity system on Nantucket Island.

With the simple cutting of a ribbon, residents of Nantucket Island, joined by state and local officials and representatives from National Grid, the U.S. Department of Energy’s (DOE) Office of Electricity (OE), and Pacific Northwest National Laboratory (PNNL), recently ushered in a new era of energy resiliency and efficiency on the island.

Located 30 miles off the southern coast of Cape Cod, Nantucket Island is home to about 10,000 year-round residents. In summer, the population swells to about 50,000 as people flock to the island’s wide, sandy beaches and agreeable climate, significantly increasing electricity demand.

National Grid, energy provider to more than 20 million people in the northeastern United States, supplies electricity to the island via two undersea transmission lines and two small, aging generators located on the island. Analyses have shown that if one of those undersea transmission lines failed, electricity demand on Nantucket Island would likely exceed the grid’s capacity to meet those needs.

To meet the island’s growing energy needs, National Grid developed an integrated plan, called “IslandReady,” to upgrade the island’s electricity infrastructure. Central to the plan was the installation of a 6-MW battery energy storage system (BESS) with 48 MWh of capacity, along with a new combustion generator unit with a maximum capacity of 16 MW.

“The DOE’s OE has funded analytical studies, performed by the national laboratories, to validate energy storage business cases for projects from Alaska to New Mexico and from Washington state to Massachusetts,” said Imre Gyuk, director of the OE’s Energy Storage Program. “These studies have provided substantial returns to evaluate a portfolio of applications using various storage technologies. The Nantucket Project is a great example of the OE and the national labs collaborating with the industry to advance these efforts.”

“We knew the grid energy storage facility and new backup generator would defer the need for a third undersea transmission line, which would have been very expensive,” said Rudy Wynter, president and COO of National Grid’s wholesale networks. “But once we made the decision to invest in the energy storage system, we asked the PNNL to help us figure out what else we can do with this investment to create additional value for our customers.”

The answer turned out to be quite a lot. The PNNL’s study, in addition to confirming the significant benefits expected over the life of the project through deferral of the third undersea transmission line, identifies substantial potential benefits by also using the system to support local grid and market operations.

With support from the OE and National Grid, the PNNL team created a sophisticated distribution system network model for Nantucket island to accurately assess a full portfolio of energy storage-enabled use cases. These include outage mitigation; Volt-VAR optimization and conservation voltage reduction programs; frequency regulation; spinning reserves; and forward capacity market participation. The PNNL also found that the BESS and generator could reduce the duration of outages experienced by Nantucket residents by nearly half. The full report is available here.

“This is a groundbreaking study that greatly expands our ability to accurately estimate grid impacts and financial implications of grid energy storage investments,” said Patrick Balducci, chief economist at the PNNL, who led the assessment. “The results of this research effort will be used to build a more resilient, reliable, flexible, and cost-effective electricity system on Nantucket Island. It also provides a road map and measuring stick for grid energy storage projects across the United States.”

Balducci said the study incorporates several innovative elements and approaches that together paint a much more complete picture of the value energy storage can bring to grid operators and consumers.

“This study highlights a valuable storage project and could also be used to make a strong case to regulators to allow a rate-based asset to participate in energy markets,” Balducci said. “The key is understanding how grid energy storage investments will perform under realistic grid operating conditions using real-world use cases and factoring in market dynamics."

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