Grid Infrastructure Benefits

Executive Summary

Grid infrastructure applications and benefits involve energy storage used within the utility transmission and distribution (T&D) systems to:

  1. Improve the performance of existing T&D assets and thus increase their load carrying capacity and/or improve service reliability and quality,
  2. Manage T&D congestion,
  3. Defer or avoid the need for additional T&D equipment, and
  4. Increase the service life of existing T&D equipment.


Transmission Support

Transmission support is provided by well-located storage that improves T&D system performance by compensating for electrical anomalies and disturbances, such as voltage sag, unstable voltage and sub-synchronous resonance. The result is a more stable system with improved performance (throughput). Benefits from transmission support are highly situation-specific and site-specific.

Transmission Congestion Management

An increasing number of transmission systems are becoming congested during periods of peak demand because, as demand and deployment of renewable generation and distributed electric resources (DERs) grow, transmission capacity additions do not keep pace. One result is increasing use of transmission congestion charges: market-based time and/or location specific pricing for congested transmission capacity.

Storage use allows utilities and ultimately end-users to avoid those congestion-related charges. To reduce transmission congestion; storage is installed at one or more locations that are electrically downstream from the congested portion of the transmission system. Energy is stored when there is no transmission congestion (i.e., at night and/or on weekends). The stored energy is used/discharged during peak demand periods, which reduces the amount of demand that must be served by the transmission system on a real-time basis, during peak demand periods.

The transmission congestion management benefit accrues if storage use reduces congestion-related charges and/or defers the need for a transmission upgrade. It is possible, perhaps likely that storage used to reduce transmission congestion also leads to more total energy transmission (kWh per kVA of transmission capacity) on an annual basis (i.e., improved asset utilization) if significant amounts of energy are transmitted during off-peak times, to storage in or near load centers. Additionally, transmitting energy at night (versus transmission during the day) reduces T&D energy losses by a few or even several percentage points (net).

Transmission and Distribution Upgrade Deferral

Transmission and distribution upgrade deferral involves small amounts of storage to delay – and in some cases, avoid entirely – utility investments in transmission and/or distribution system upgrades.

Consider an example shown in Figure 1. For a specific portion of a utility’s T&D system whose rated load carrying capacity (capacity, or design rating) is 12 MW, shown by the red line. The end-user peak demand served by the T&D equipment has surpassed the T&D equipment’s’ load carrying capacity (labeled as overload in the figure).

In such a circumstance; the typical electric utility response is to increase the load carrying capacity of the T&D equipment one or two years before the overload is expected to occur.

It is important to note that it is not practical to add a small amount of extra capacity. Rather capacity is added in “lumps.” Consider that it is not possible to add a small amount of capacity to a wire or to a transformer. Instead, the utility must either remove the equipment whose capacity is to low and replace it with equipment whose capacity is higher or add more equipment to augment the existing equipment. Typically capacity is increased by 33% to 50.

An increasingly viable alternative is for the utility to install a small amount of energy storage – located electrically downstream from the overloaded T&D equipment – to reduce the peak demand that must be served by the T&D equipment. As a result, the equipment upgrade can be deferred or avoided. The benefit can be as high as a few hundred dollars per kW of storage for one year of deferral.

Transmission and Distribution Equipment Life Extension

Similar to T&D upgrade deferrals, small amounts of storage can be used to extend the life of T&D equipment if storage use reduces loading – and thus excessive heating of and wear on – existing equipment that is nearing its expected life. The result is an extension of the useful life of the existing equipment. Perhaps the most compelling example is the large and rapidly aging fleet of electric utilities‘ underground electric distribution cables. Life extension is accomplished by reducing peak loading of those cables which, in turn:

  1. Reduces degradation of the cable’s insulation, and
  2. Reduces the number of or the possibility of ground faults which have a dramatic effect on cable life.

Another important example is use of small amounts of storage to reduce peak loading on older transformers that are approaching the end of their useful life.

Life extension is especially compelling where underground cables and transformers are located in highly developed and/or densely populated urban areas where replacement cost is high, disruption would be significant during a construction, and where permits can be expensive or challenging to acquire.

Upgrade Deferral and Life Extension Benefit

The benefit per kW of storage used for deferral or life extension is quite attractive because a small amount of storage provides enough incremental load carrying capacity such that a large and expensive ‘lump’ investment in new T&D equipment is deferred or avoided. Such a deferral is attractive if doing so:

  1. Reduces the overall cost to the utility’s ratepayers,
  2. Improves utility asset utilization (see section),
  3. Allows use of the capital for other projects, and
  4. Reduces the financial risk associated with lump investments.

Importantly; at most nodes within a T&D system the highest loads occur during just a few days per year and for just a few hours per year. An important implication is that storage used for T&D deferral or life extension can provide a significant benefit with limited or no need to discharge (i.e., if peak demand is lower than expected/forecast).

One other facet of the upgrade deferral is that it can be a way to avoid T&D equipment investment risk. That benefit is attractive when there is uncertainty about the magnitude and timing of increased demand. For example, a commercial or residential developer may have plans to build a commercial building or numerous homes. Furthermore, the development would increase demand and thus an upgrade to the existing T&D equipment is needed to accommodate the added demand. If there is uncertainty about how much demand will increase and/or when the increase will happen then the utility could use storage to delay the upgrade until matters are more certain.

Readers are encouraged to see the Sandia National Laboratories report entitled Electric Utility Transmission and Distribution Upgrade Deferral Benefits from Modular Electricity Storagefor more details.

Substation On-site Power

Electric utilities are among the biggest owners/users of electrochemical battery systems. Most of the systems owned and operated by utilities are used to provide on-site back-up power at utility substations. Storage is needed at substations – when power from the grid is not available – to provide power to substation communication and control equipment. There are at least 100,000 such battery storage systems at utility substations in the U.S. The vast majority of these systems use lead-acid batteries, mostly the vented type.

Conclusions and Observations

Given the flexibility that energy storage provides, its inherent modularity and its operational characteristics storage can and probably will play a significant role as an important element of utility electrical transmission and distribution systems of the future. Storage can improve the performance of existing T&D facilities, storage can be used in lieu of added T&D capacity and storage can be used to extend the life of existing T&D equipment. What is needed are:

  1. The mindset by utility power engineers,
  2. Regulatory “permission” to use storage,
  3. Evaluation tools and frameworks that accommodate storage, and
  4. More evidence about the performance of and benefits from storage.