In the nearly 24 years that I’ve been village administrator of the Village of Minster, never did I think the Village would be considered a leader in the public power field. However, with a new utility-scale storage project combined with a solar array, the Village has found itself at the forefront of the energy storage movement.
While our solar project is not the first to be built in Ohio, what makes this project unique is we have combined the solar array with energy storage. To our knowledge, this is the first time a public power community has combined the two.
The combined project involves the construction of a 4.2-MW solar array combined with a 7-MW storage facility being built by S&C Electric. The storage facility will use S&C’s Purewave Storage Management System, providing fully integrated storage management and power conversion for 3 MWh of lithium-ion batteries. The project is being developed by American Renewable Energy and Power and is owned by Half Moon Ventures (HMV). The Village has provided the land for both facilities and has entered into a power purchase agreement through which it is able to take advantage of the benefits of solar power at a below-market rate while reducing up-front expenses. Minster will include the energy generated from the solar array into its electric portfolio, and this behind-the-meter resource will allow the Village to reduce the amount of energy purchased through the open market. In addition, it will allow the Village to use the solar array as a hedge against market volatility and provide us with a predictable electric rate.
Minster and HMV, will both obtain benefits from the energy storage system (ESS). This notion known as “revenue stacking” is a great way to make the project viable for both parties. The Village will use the ESS to help integrate the solar into the village’s electrical grid. The ESS will improve the village’s power quality, which is important to our major industries, such as Dannon Yogurt and Nidec Minster. It will help us to defer spending by approximately $350,000 for the acquisition of reactive power compensation equipment to improve power quality. The system will help the Village shave energy demand during peak periods. Finally, the solar and ESS, because it is behind the meter, will allow the Village to reduce its transmission and capacity charges. All of these benefits add up and enable the Village to continue to provide low-cost, reliable electricity to the residents and business that call Minster home.
HMV will be able to sell into PJM’s frequency regulation market, providing them a source of revenue and providing grid reliability for more than 60 million customers. PJM Interconnection has the largest utility market, with more than 100 MW of storage deployed since 2013, and PJM’s frequency regulation market has been the driver for most of the energy storage deployment, including this project.
As the energy storage concept continues to move forward, the driving factor in future development and implementation is being able to leverage multiple value streams for all parties involved. Currently, most ESSs in use are deployed for one of three applications: demand charge reduction, back-up power or increasing solar self-consumption. What results is an ESS that is only using a small portion of its useful life, resulting in little economic benefit and lost opportunity. For energy storage to be economically successful, the unit must be dispatched for a primary service and then redispatched for multiple services or revenue stacking.
ESSs provide much more value when the system is able to stack revenue services to all parties involved in the project. In a report issued by the Rocky Mountain Institute, EESs are able to provide 13 different services such as frequency regulation, T&D deferrals, back-up power, voltage support, congestion relief, increased photovoltaic self-consumption and reduction of demands charges, all which could benefit the stakeholders in the project. The key to further implementation of energy storage is to leverage several revenue services to make a project economically feasible. Doing such, is what led to the successful implementation of the ESS in our community. Both the Village of Minster and HMV will be able to receive economic benefits from the system, making it economically worthwhile for both parties. The project is one of the first examples of how a developer and a municipal utility can work together to create multiple revenue streams that benefit both parties.
Being able to recoup the economic benefits of revenue stacking is often dependent on the market the resource is located in. In our case, PJM’s frequency regulation market made this easy. Those without RTOs may find it more difficult.
A recent PV-Tech article was titled, “Tiny municipal utility in Ohio pioneers ‘benefits stacking’ solar-plus-storage pilot.” While maybe not being comfortable being labeled as a pioneer, we hope our combined solar and ESS will be a model for the industry. The Village looks forward to sharing the results of its efforts with others in the utility industry and being a leading proponent of the benefits of energy storage. ♦