RICHMOND — Dominion Energy Virginia announced Tuesday it is planning to spend around $33 million to build four electric power battery storage projects at three sites in central Virginia.
The pilot projects, totaling 16 megawatts, would be the utility's first use of battery storage technology. Dominion executives said in an interview ahead of the formal announcement that the projects will test different applications for battery storage, which is increasingly seen as a way to improve the resiliency of the electrical grid and better integrate renewables such as wind and solar.
The pilot projects are required under a 2018 overhaul of the state's electric utility regulation. Dominion submitted an application with state regulators Friday.
If approved, the projects are expected to be operational in December 2020 and then would be evaluated over five years.
The largest project is a two-battery system totaling 12 megawatts that will be installed at a solar facility in Powhatan County. It's intended to both optimize the power produced at the facility and store energy.
"For instance, during the middle of the day when solar generation is reasonably high we could store it at that point, and we could release it, say, late in day when our peak load is occurring," said Mark Mitchell, vice president of generation construction. "You're kind of shifting the energy around."
The other projects are a two-megawatt battery at a substation in Ashland and a two-megawatt battery at a substation in New Kent County. In part, they will test how batteries could help reduce wear and tear on equipment and save money.
Walton Shepherd, Virginia policy director for the environmental group Natural Resources Defense Council, said battery storage offers a "slew of benefits" compared with fossil fuel generation resources, like natural gas plants.
"This is the type of more customer-friendly, cost-effective and more innovative resource that Dominion is right to shift their attention to," he said.
Dominion says it expects storage to be an important facet of expanding the amount of energy it generates from renewable sources. The company has committed to having 3,000 megawatts of solar and wind in operation or under development in Virginia by 2022.
Dominion agreed to boost that figure as part of the 2018 utility overhaul bill. That legislation also gave the company new flexibility in accounting for costs that virtually guarantee its rates can't go down, even if regulators find that it's earning excessive profits.
Nationwide, the number of large-scale battery storage projects have increased substantially in recent years.
A July report from the U.S. Energy Information Administration found operating utility-scale battery storage power capacity had more than quadrupled from 214 megawatts at the end of 2014 to 899 megawatts in March of this year.
Capacity could exceed 2,500 megawatts by 2023, the EIA estimated.
Dr. Venkat Srinivasan, with the Joint Center for Energy Storage Research, said there's been a dramatic reduction in cost for battery technologies in the past five to seven years, as well as a growing sense that cost-effective energy storage will be crucial for the future of the electrical grid.
Utilities often start with battery pilot projects and realize as the projects mature that they make financial sense, said Srinivasan, who is deputy director for research at the center, a partnership of national laboratories, universities and companies funded by the U.S. Department of Energy.