MiEnergy Electric Cooperative, with territory in both Southeast Minnesota and Northeast Iowa, is a little over two years into a five-year pilot project studying residential battery storage systems. The cooperative has partnered with the Iowa Energy Center, the National Rural Electric Cooperative Association (NRECA), and National Rural Telecommunications Council (NRTC) to install six residential battery systems at member’s homes.
Battery storage fits in with co-op’s load management and renewable energy work
MiEnergy has been researching utility-scale battery installations for several years. Ted Kjos, VP of Marketing and External Relations, shared that “while the economics are not quite right yet,” to make such a project cost effective, "MiEnergy could add something like this to our portfolio in the not-to-distant future.” Especially at points in their distribution grid with large commercial and industrial customers, "utility-scale battery installations can add resiliency, provide voltage control, and improve power quality issues,” said Kjos.
When asked why the cooperative elected to do a residential pilot project, both Ted and Kent Whitcomb, VP of Member Services, talked about MiEnergy’s involvement over the last couple of decades with distributed energy resources. Ted pointed to the two community solar gardens launched by MiEnergy along with the 600-some members with on-site power generation, such as solar PV, small wind, or other generators. Kent said that by the fall, MiEnergy will have broken ground on four projects consisting of 9 MW of utility-scale solar as well, and that “as a result, storage fits in with the things we do.” Whitcomb continued, “we have been heavily involved with load management since the late 1970s,” and that is the main aspect of research in the pilot.
Testing technology to reduce electricity costs with batteries
Load management allows utilities to control end-use appliances and reduce electrical consumption during peak demand times. Peak power needs dictate the required generating capacity, but peaking power plants run only periodically, and thus have a high cost relative to electricity generated. Batteries contribute to load management when the utility discharges them during peaks. This reduces cost by eliminating the most expensive electricity needed on the grid. “Our highest cost is wholesale power, at 60 to 70 percent, so load management is important,” said Kjos. “Our greatest potential is with residential customers,” he continued, “thus this project is for residential batteries.”
Kent also relayed that some of the technologies needed to allow MiEnergy to control the batteries at the pilot sites require two-way communication, automation, and interoperability, which all lay the groundwork for other innovation. “Using my crystal ball as a distribution utility, I see that microgrids will come soon and we will want to enable our systems to have that interoperability,” Ted said. MiEnergy sees this as a chance to test technology that will be a “win-win” for their customers.
Members an invaluable partner in battery storage research
To locate member sites for the pilot installations, MiEnergy put a notice in their newsletter and talked about the pilot at their annual meeting. They were surprised at the high number of responses: “Our early-adopter members were very excited and wanted to be the first to test this technology,” said Kent. MiEnergy’s screening criteria included high-speed internet access, a service panel in a conditioned space, and room for batteries that allowed for ventilation and access. Next, the members had to give MiEnergy permission to install a sub-panel (essential load panel) and to control the charging and discharging of the batteries. MiEnergy paid the full cost of the system and there is a legal agreement with each member that covers insurance and liability.
Originally the project was to include four installations with 16 kWh of battery storage and an 8 kW inverter, but an additional grant added two more sites in Iowa with 10 kWh of storage and 7 kW inverters. The batteries are Lithium Iron Phosphate, which are less energy-dense than Lithium-ion but have a longer life with more charge and discharge cycles. Two of the sites had on-site solar, and one had a generator.
The cooperative-member agreement is for a five-year pilot, with a possible five-year extension. Four of the six installations were completed in the fall of 2018 and will soon provide the second full year of data, with the last two becoming operational in 2019. “There was a peak alert in February 2020,” said Kent “and then we used the controls to allow the batteries to discharge, so we are just getting into this important phase.”
What is the cooperative learning from the battery storage pilot?
When asked what they hoped to learn and what they are learning from the pilot, Whitcomb and Kjos had several items.
Exploring the business model for utility installation of residential battery systems
Ted shared that there is a history of innovation with electric cooperatives, leading MiEnergy to think about providing battery systems. “Now in Minnesota there are co-ops that own and install geothermal loops or are installing broadband, and 25 years ago TV satellite dishes were often leased from co-ops. Co-ops tend to provide products and services that aren’t readily available. If the retail sector enters the market and has better economies of scale, then co-ops will usually exit the business, but until then this is a way for them to provide services to their members.”
While leasing of battery systems might be available through MiEnergy in the future, the costs at the residential level do not pencil out yet. Using the models similar to other distributed energy systems like solar PV, these systems would take at least 43 years to pay for themselves, long past their lifespan. Thus, the project would not have been possible if not for support from grant funding. Still, Ted shared that the co-op is optimistic: “We have to think about where we want to be and then figure out how to get there. We will learn and not expect to arrive in one leap.”
MiEnergy Electric Cooperative | https://mienergy.coop/
Iowa Energy Center | https://http://www.iowaeconomicdevelopment.com/energycenter
NRECA | http://www.electric.coop