Arizona Public Service is installing a 2 MW, 8 MWh battery storage system instead of rebuilding about 20 miles of transmission and distribution poles and wires.
It is the first time that APS, an investor-owned utility, has used energy storage as an alternative to traditional infrastructure, but it will not be the last, Scott Bordenkircher, director of transmission and distribution technology innovation and integration at APS, says.
Bordenkircher says the storage system, which is being installed as an alternative to upgrading a distribution line, will increase reliability in Punkin Center, Ariz., a growing community of 600 people in the Tonto National Forest about 90 minutes northeast of Phoenix.
APS has not made cost comparisons between the battery and distribution projects public because it involves details of a confidential contract, but Bordenkircher says the battery project costs less. The batteries will also be able to serve additional purposes and they can be scaled.
APS estimates the batteries will be called on for 20 or 30 peak demand days a year to serve the load that would have been served by the distribution upgrade. During the rest of the year, they will be available for voltage regulation, peak shaving and to provide capacity. That will provide a "second level of savings," Bordenkircher says, by deferring the capital cost of putting in new regulators for instance.
In addition, the capacity of the batteries can be scaled if the needs of Punkin Center continue to grow. So instead of planning and spending with a 20 or 30-year time horizon, "we can build in a modular way and cover three to five years of needs and add resources incrementally," Bordenkircher says.
The Punkin Center project will use Advancion batteries from AES Energy Storage, which is also building the project and will provide augmentation services over the 10-year life of the contract to ensure that the batteries perform as promised.
APS plans to begin construction of the pair of 4 MWh batteries in the fall and have them in operation early in 2018.
"The cards just stacked up" for the Punkin Center project, Bordenkircher says, and now "we have made energy storage part of our engineering process." Going forward, he says, APS will look at both traditional and non-traditional resources as part of its planning process.
Energy storage gives APS "another tool in its toolkit," says Bordenkircher, and there will be more storage projects in APS' future.
The utility's integrated resource plan calls for 500 MW of storage, but it will not all be for capital deferment. It could be used for capacity or for frequency regulation. Storage is a "multi-value tool," he says.