Significant seasonal demand spikes affect a number of areas around the country. Addressing them in a cost effective manner is a priority for those utilities that face large differentials between summer and winter loads.
One of those places, Nantucket, is both an isolated island and a wealthy summer colony whose population swells in the warmest months. It is a growing load area served by National Grid, and to meet that new demand, an expensive new transmission line could be required in the future. With the island's backup generation aging, it leaves residents and the tourism industry in a precarious spot, should anything go wrong.
In an increasingly prevalent move, the island is turning to energy storage for a solution that illustrates how scalable battery systems can be. But while National Grid plans to avoid a costly transmission upgrade, its storage-based solution won't be in place until 2019, leaving Nantucket's residents and businesses vulnerable to potential outages as demand rises this summer.
In some respects, Massachusetts' Nantucket Island is similar to North Carolina's Ocracoke — highly seasonal, powered by undersea transmission cables, with some backup generation in place.
Last summer, Ocracoke Island experienced a week-long partial outage when one of those undersea cables was cut. Tourists had to evacuate and island businesses lost a significant chunk of their seasonal revenues. A microgrid developed on the island managed to keep some power on for residents, but unfortunately its diesel backup generation failed as well.
Nantucket is looking to avoid a similar disaster, and has employed a larger, yet similar approach to resiliency. Each island is looking to diesel backup and energy storage from Tesla, along with demand management, to ensure they can meet summer peak demand.
Ocracoke Island has about 1,000 full-time residents, and so its system is much smaller, including a 3 MW diesel generator, 500 kW/1 MWh Tesla battery and 15 kW of solar.
"We're starting to see the economics [of energy storage] compete more and more with what I would call 'traditional solutions' many utilities are putting forward. ... As we look at how we plan and operate our system, energy storage is one of those solutions we constantly look for as a resource we could take forward."
Director of Network Strategy, National Grid
Nantucket hosts 10,000 year-round residents, but the summertime population spikes to 50,000. Its peak summer demand of 50 MW is double the off-months load.
The island is supplied by two undersea cables — one carrying 32 MW and one at 34 MW. So either would support the off-peak load, but neither could entirely supply the summer crowd.
"Nantucket is one of our fastest growing load areas," said Terron Hill, director of network strategy for National Grid's FERC-regulated businesses. "But we need both cables to serve the load."
Third cable alternative
Additionally, Nantucket's growth means a third cable was expected to be necessary in about a decade. But National Grid is using energy storage to stave off expensive grid enhancements.
National Grid held a request for information to examine the economics of different solutions, and followed up with a call for proposals. Hill can't say just how many bids they received, but the company was happy with the volume. "A good amount," he said. Ultimately, National Grid went with lithium-ion batteries and an upgrade to its existing diesel generation.
Hill calls it a "hybrid" solution. The utility did get a few flow battery solutions, but because of the space constraints at the site, in the footprint of National Grid’s existing diesel generators, "flow wasn't really a viable option," he said.
Instead, National Grid awarded an engineering, procurement and construction contract to Tesla, for development of a 6 MW, 48 MWh battery system. Along with that, the utility is upgrading its pair of 3 MW diesel generators to a 10 MW unit, with construction expected to be complete this summer. "It will allow us to continue serving load on the island if one of the cables fails during the summer months," Hill said. "And the battery storage is more economical than just using diesel generation."
Jackie Barry, director of strategic communications for National Grid, said the resource mix works in particular because of what the island has and needs.
"Nantucket has some unusual and unique needs,” she said. Peak demand doubling during the summer, along with the transmission line situation, create risks. "We really came up with a bespoke solution for the island."
"Diesel tends to be the most economical," Hill explained. There is no natural gas service on the island, and Nantucket also has access to diesel storage, making it the more reliable fuel, he said.
Other projects on Nantucket
The battery energy storage system (BESS) and new diesel generation is not the only energy project on the island. It's not even the only Tesla storage project.
Like other states, Massachusetts is taking a serious look at how energy storage can help modernize the grid. The state has a formal goal, as well — to procure 200 MWh of energy storage by 2020. In December, Massachusetts selected more than two dozen projects that will receive $20 million in funding as part of its Energy Storage Initiative.
Among the projects, Tesla's SolarCity was tapped to install its Powerwall batteries at 500 residences on Nantucket, which will be dispatched by the utility and will assist in delaying the third cable. And last summer, the state also selected Genbright and Ice Energy for a $1.5 million grant to utilize thermal energy storage at residential sites, also for peak demand reductions.
National Grid also has energy efficiency and demand management projects in the works on Nantucket, but Hill said that it is now standard for the utility to consider energy storage when it is addressing grid issues.
Reliability is always a key utility value, but it can have even more significance in isolated areas like islands.
On Ocracoke, North Carolina Electric Membership Corp. Senior Vice President Lee Ragsdale told Utility Dive last year that the total economic loss for an outage is tough to quantify because there are many effects. "But to the residents, the main one is that economic impact of losing a week of tourism. It's devastating to them," he said.
Nantucket's battery energy storage system will not be operational in time for this year's summer season. Testing and commissioning are expected late this year, with the BESS coming on near the start of 2019. So for this summer, National Grid will cross its fingers. But the 48 MWh battery will eventually help ensure reliability and lower costs. It's a solution the utility expects to return to.
This summer, National Grid will have the benefit of the larger diesel generator in place. And should one of the transmission lines fail, it's prepared to ship additional generators to the island. But according to the utility, since they were installed, the lines have provided "outstanding reliability." The long-term moves, including the addition of batteries, will boost resilience, however, in the unlikely event one fails.
“Energy storage is really becoming more and more a viable solution on the grid," Hill said. "We're starting to see the economics compete more and more with what I would call 'traditional solutions' many utilities are putting forward. ... As we look at how we plan and operate our system, energy storage is one of those solutions we constantly look for as a resource we could take forward."