The North Carolina Utilities Commission earlier this month granted to Duke Energy Progress (DEP) a certificate of public convenience and necessity (CPCN) for the solar generation-related components of the company’s proposed Hot Springs Microgrid Solar and Battery Storage Facility.
The Hot Springs Microgrid will be approved as a pilot subject to certain reporting requirements, a study of frequency regulation, the imposition of a cap on the above-the-line capital costs of the project, and other conditions proposed by regulatory staff, all of which have been agreed to by DEP, the commission said.
As noted in the order, DEP filed the application for a CPCN to build the generation components of the Hot Springs Microgrid Solar and Battery Storage Facility on DEP-leased property in Madison County, N.C., in October 2018.
The Hot Springs Microgrid consists of an approximately 3-MW direct current (DC)/2-MW alternating current (AC) solar photovoltaic (PV) electric generator and an approximately 4-MW lithium-based battery storage facility. The commission also said that the Hot Springs Microgrid will be situated on one parcel totaling about 15 acres.
The microgrid will consist of PV panels affixed to ground-mounted 20 degree fixed-tilt racking, solar inverters, a microgrid controller, and a lithium-based battery energy storage system (BESS), which will be connected and sized so that the microgrid can provide backup power to customer loads during certain outage events.
The commission also said that the microgrid will be capable of providing energy to customers in Hot Springs even while disconnected from the DEP grid to mitigate outages for DEP customers connected to the Hot Springs 22.86-kV feeder, which runs for about 10 miles from the Marshall substation along the French Broad River and through the mountainous Pisgah National Forest. The commission noted that while grid-tied, the microgrid will be capable of providing essential reliability services to the DEP grid, such as frequency and voltage regulation, ramping support, and capacity during system peaks.
The commission said that while it is not clear that the Hot Springs Microgrid is the most cost-effective way to address reliability and service quality issues at Hot Springs, the overall public convenience and necessity would be served by granting the certificate for the solar facility and approving the Hot Springs Microgrid as a pilot project. The system benefits from the microgrid are material but difficult to quantify accurately without real world experience in DEP’s service territory. The commission added that DEP will gain valuable experience by operating the microgrid and that that experience, data collection, as well as analysis, will be beneficial in future cost-benefit analyses.
The anticipated useful life of the microgrid is expected to be 25 years with anticipated replacement battery cells after the tenth year, depending on the degradation curves experienced by the BESS, the commission said.
Among other things, the commission said that DEP is required to:
- Within six months of commission approval, formalize and provide its operational and learning goals in a transparent and comprehensive plan, showing how it will achieve such goals and what operational data from the Hot Springs Microgrid will be measured and recorded
- File with the commission a status report on the progress of construction and actual project costs in the same format as for initial costs of construction six months after the date of the CPCN and at the completion of construction
- Annually report, update, and file with the commission and provide to regulatory staff, confidentially, the results of its operational knowledge and learning goals to demonstrate the operational benefits of the microgrid
DEP is to perform a study, either by contracting with a third party or as part of its integrated systems and optimization planning initiative, to estimate the ancillary service benefits battery storage can provide DEP’s system, using certain sub-hourly modeling techniques, and use the results to help quantify the success of the Hot Springs Microgrid, the commission said.
Other conditions include that DEP is to maintain the existing radial distribution feed into Hot Springs, including vegetation management, in a manner that under normal circumstances should produce SAIDI and SAIFI indices that are at least comparable to those of the overall DEP Western Region, the commission said.
Duke Energy (NYSE:DUK), in a May 21 statement on the matter, said that the project is part of its plan to meet power demand by balancing public input, environmental impacts, and the need to provide customers with safe, reliable, and affordable energy. Another component of that plan is in the city of Asheville where the company will connect a 9-MW lithium-ion battery system at a Duke Energy substation site in the Rock Hill community – near Sweeten Creek Road, the company said, adding that the battery will primarily be used to help the electric system operate more efficiently and reliably for customers.
Together, the two projects will cost about $30m, and should be operational in early 2020, Duke Energy said.