Energy Storage

The concept of energy storage is not new, but the need for reliable, affordable storage solutions has never been more critical. We are exploring new ways of using energy storage to manage demand and support the interoperability of the grid, including investing in companies, such as Greensmith, to accelerate development and deployment. Today, as the energy landscape transitions to more distributed and intermittent resources, we need the ability to store energy from all of them.

Distributed Energy Storage Applications

  • Reliability improvements - Batteries can provide back-up power in case of an outage. For example, a total of three 2-MW NaS (sodium sulfur) batteries were deployed in Appalachian Power, Ohio Power and Indiana Michigan Power in 2008. Each battery is capable of providing islanding (backup power) for more than seven hours when loss of power from the substation occurs.
  • Frequency regulation - Batteries have the ability to rapidly respond to frequency regulation signals on the grid. Regional transmission organizations are recognizing the need for greater amounts of frequency regulation due to the integration of distributed resources.
  • Firming of renewables - Wind and solar often do not generate energy when and where it is needed most. Deploying batteries to combine with wind and/orsolar energy can allow for better use and management of variable renewable energy sources.
  • Peak shaving - Batteries can provide power during peak demand times to lower customer demand and alleviate strain on the power grid.
  • Power quality - Batteries are capable of conditioning the flow of power so it can be used by sensitive electronic equipment.

Finally, batteries are a relatively modular solution that can be mobilized and relocated if they are needed elsewhere on the system.

AEP is an industry leader in deployment of batteries to support the power grid

Year DeployedProjectBenefits to Grid Achieved
2002First U.S. demonstration of sodium sulfur (NaS) battery in the United States at AEP Tested the combined power quality and peak shaving capabilities of the NaS battery
2009Three 2 MW/14.4 MWh NaS batteries Provided peak load shaving and demonstrated increased reliability by providing backup power in Milton, W.Va., Churubusco, Ind., and Bluffton, Ohio.
20104 MW/ 24 MWh NaS battery Transmission capital deferral while providing back-up power to the town of Presidio, Texas

Battery Solutions

Energy storage can sometimes be the most cost-effective, efficient solution to a reliability issue. In 2016, AEP Texas proposed installing a lithium-ion battery in two locations in the state to increase the reliability of the distribution system. As battery technology becomes more mature and cost-effective for a number of applications, it can displace other solutions that may be more costly. In this case, the proposed battery installations would address a regional reliability issue and be more cost-effective than building a new transmission line and substation that would otherwise be required. This is an example of an antiquated, legal definition that limits the technology capabilities of energy storage today, and thus limits the benefits that could be recognized by our customers. A decision is pending before the Public Utilities Commission of Texas.

Energy storage can sometimes be the most cost-effective, efficient solution to a reliability issue.

AEP has experience with battery deployment, and we want to begin incorporating battery technology into our distribution planning process to maintain our goal of providing safe and reliable service to our customers in the most cost-effective way. In this case, a utility-scale battery could be installed for significantly less than the cost of a new transmission line and substation and would remove the need for additional major reliability upgrades for the foreseeable future. This is the type of win-win that technology can deliver for our customers and for AEP.

One of our strategic objectives is to form partnerships for pursuing technology development and transmission growth and for meeting customers’ expectations. These relationships help technology developers test their new technology at scale on our power grid and give us the advantage of being an early adopter of innovative solutions.

For example, Greensmith Energy Management Systems, one of the largest providers of energy storage software and integration services, is a strategic partner with AEP to advance battery storage technology. In addition to investing $5 million in the company, AEP partnered with Greensmith in 2016 on a 2 megawatt/14 megawatt-hour energy storage system in West Virginia. For the past five years, the NaS battery system has been used as a backup to Appalachian Power Company’s (APCo) distribution network in the region. The existing battery has helped to extend the life of the distribution equipment in that area.

By adding Greensmith’s software, we upgraded the system, gaining flexibility and the ability to expand usage of the existing energy storage system as a revenue generating asset for frequency regulation within the PJM Interconnection market.

As more intermittent generation resources connect to the power grid, fast-responding energy storage is becoming critical to maintaining grid reliability. PJM offers higher payments for fast-responding assets to stabilize the grid, such as batteries and other quick-acting load control systems, compared to fossil fuel power plants that need time to ramp up and ramp down. Batteries can ramp up to full power in seconds, but they cannot last as long as a power plant to meet peak demand. PJM’s frequency regulation market is robust, and APCo is poised to seize the opportunity in part due to the Greensmith technology.

Our investment in Greensmith will help us advance energy storage technologies and innovative energy infrastructure solutions to benefit our customers, as well as the grid. In addition to continued power grid system deployments, AEP is exploring the use of energy storage to meet specific customer needs.

“We are excited to partner with a progressive company like AEP to deliver this project as well as future systems.”
– John Jung, president and CEO, Greensmith Energy