United Power offsets peak loads with Tesla batteries

FIRESTONE — United Power Inc. wanted a way to store energy generated overnight when energy use is low and figured a battery storage system presented the best option — the technology is innovative and a potential for renewable regeneration.

United Power, a Touchstone Energy cooperative headquartered in Brighton, built a 7,000-square-foot commercial scale, energy-storage system at its Firestone location on Interstate 25, just south of Colorado Highway 119. The cooperative worked in collaboration with Chicago-based Engie Distributed Solar, formerly SoCore Energy, a solar photovoltaic and energy-storage developer that serves rural-electric cooperatives and agreed to do the build.

United Power selected Tesla Inc., to supply the 4 MW/16 MWh powerpack or high-performance, scalable battery storage system. Tesla, a Palo Alto, Calif.-based company, builds integrated battery systems for automobiles. A megawatt hour is a unit of measure of electric energy that is 1,000 kilowatt-hours.

“We think this is definitely going to be the biggest battery project in the state of Colorado,” said Jerry Marizza, new business director for United Power. “We really do feel this is truly the next step in renewable regeneration.”

United Power, which solely distributes electric power, is finalizing the commission process for the battery storage system with plans to have it fully operational in early December; construction began in early 2018. The system employs a Tesla lithium ion battery suite, consisting of several individual battery packs connected together and managed through a software system that act as one battery unit.

Each day, the battery suite will be charged from the grid likely at 2 a.m. when power is less expensive because it’s off-peak and more available. It will then be released from the battery system during daytime hours in order to shave off the high-demand peak loads.

“During those peak periods, energy becomes very, very expensive,” Marizza said.

Utilities have the option to purchase power on the market or turn on a generator, but that presents another expensive option, Marizza said.

Locally, the market’s three largest power generators are Tri-State Generation & Transmission, Xcel Energy and Black Hills Energy. United Power purchases its power from Tri-State, which supplies more than 40 cooperatives in Colorado, Wyoming, Nebraska and New Mexico. 

Instead of making the purchase at peak times, the utility can release the battery power to supply customers, Marizza said.

The battery at 4 MWh has the capability of providing output for 4 hours, Marizza said. This can offset about 1-2 percent of the peak demand, saving customers about $1 million a year. The utility serves nearly 90,000 meters, representing about 200,000 customers, he said.

“This is a big first step for us to move into the future of what the utility grid will look like and how it will be managed,” Marizza said.

United Power plans to install additional batteries if the initial system proves effective, but if the battery degrades or does not hold power over time, the utility will discontinue its use, Marizza said. The utility also will study how the system handles extreme heat and cold to determine its effectiveness, he said.

“We really want to know how this technology really works,” Marizza said.

If the utility expands battery use, it will need a smarter grid able to handle electricity moving in two directions on the distribution lines instead of from the utility to the customers’ homes and businesses, Marizza said. Batteries could be placed at strategic locations along the grid to absorb excess energy and deliver it back to the utility, he said.

“We just need a more sophisticated grid to incorporate all of this renewable regeneration,” Marizza said.

The battery could also be used in a renewable energy strategy, Marizza said. Power generated by solar, for example, could directly charge the battery by day when the sun is shining and be released at night when there is still demand. 

“If we don’t come up with an answer for that [storing solar power], it would limit renewable regeneration,” Marizza said. “We want to learn about it for other purposes to be able to develop further regeneration, so we can use it for all 24 hours.”

Renewable regeneration could occur in all-solar subdivisions, where homes have solar panels to generate electricity that the utility would then use, Marizza said.

Nationwide in the past 18 months, cooperatives are co-locating battery storage systems with solar panels, said Kevin Phelan, chief marketing officer of Engie Distributed Solar. The panels generate electricity from the sun, which is then sent into the distribution grid or the battery system, he said.

“Obviously, solar has become very cost-effective in the price of electricity. It’s become very competitive,” Phelan said.

A challenge of solar power is that it can only be produced during daylight hours, but batteries, which also are becoming more cost-effective, can extend that use into the evening, Phelan said.

“Instead of having to use more gas-fired electricity in the evening, you can use batteries to use up some of the solar power you stored,” Phelan said. “It helps balance the distribution of the grid. … The battery puts a lot of resiliency into the grid that makes the grid stronger and more reliable. … It’s generating power that’s clean and affordable.”

United Power will hold a ribbon cutting for the Tesla battery storage system at 2 p.m. Dec. 18 with dignitaries invited including Phelan.

“We see this as a way of benefitting the customers at the end of the day,” Marizza said. “We’re owned by the customers we serve and have a tight relationship with them. It’s our feeling as a cooperative … we have an obligation to investigate new technologies.”

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