North Carolina energy storage market could exceed 1 GW by 2030

• A study released Wednesday by North Carolina State University and North Carolina Central University found the market for energy storage in the state could exceed 1 GW by 2030.
• The study laid out potential use-cases for a variety of energy storage technologies, as well as cost-benefit analysis of those applications. While several storage C&I applications are currently cost effective, the research determined residential battery storage paired with rooftop solar doesn’t pencil out with the state’s electricity rates.
• The study was mandated by a 2017 law, the Competitive Energy Solutions Plan (HB 589), which boosted solar development in the state, but put a moratorium on wind power development.

Renewables have grown sharply in North Carolina: solar electricity production grew from 7 GWh in 2008 to 5,783 GWh in 2017.

The prospects of continued renewable penetration are one of the driving factors behind the legislatively-mandated report on energy storage published by the two universities.

Energy storage in North Carolina is starting at a similarly low level to solar power a decade ago. The state currently has 1 MW of battery storage, about 185 MW of pumped hydroelectric storage owned by the Tennessee Valley Authority and about 80 ice thermal storage projects.

But there are several projects in the works, including a 12 MWh battery-plus-solar project for Brunswick Electric Membership and a 500 kW battery facility paired with a 1 MW solar project for Fayetteville Public Works Commission. And, in October 2018, Duke said it planned to invest $500 million in battery storage projects over the next 15 years.

The report sees a large potential for energy storage in North Carolina, and offers insights into specific use cases. In moderate-size energy storage projects, like those proposed by Duke, “storage could offset the construction of a gas power plant,” Jeremiah Johnson, a member of the energy storage team and an associate professor at NC State, said in a statement.

If storage reached the 1 GW scale the report identifies, Johnson says the technology could offset the need for multiple power plants and provide the infrastructure needed to expand renewable power sources.

Right now, lithium-ion (li-ion) battery storage is cost effective to reduce C&I coincident peak and time-of-use charges for some customers, with 2-hour duration batteries yielding the highest benefits. Ice storage is also currently cost-effective for the same uses for C&I customers. However, residential battery storage coupled with distributed solar is not.

Pumped hydro and compressed air storage are also currently cost effective for bulk energy time shifting and peak shaving in North Carolina, but are very site specific. While the use of li-ion batteries for time shifting and peak shaving in the state are not cost effective at 2019 costs, projected cost declines are likely to make the battery chemistry cost effective in 2030 and could grow into a 5 GW market.

Likewise, batteries at current prices are not cost effective for solar clipping, except if a project includes “significant value from renewable energy credits” because North Carolina’s relatively flat marginal electricity costs do not provide significant arbitrage opportunities for batteries, the report found.

Among all the examined uses for storage, the report found frequency regulation provided the highest benefits and a “key near-term opportunity.” The authors suggested that, similar to what the PJM Interconnection has done, frequency regulation in North Carolina could be met cost effectively by separating the regulation signal into fast changing components that could be supplied by energy storage and the slow moving components that could be supplied by conventional generators.