Duke Energy and the No Controversy Microgrid: Hot Springs

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Again Duke Energy has scored an easy microgrid win, this time for the Hot Springs Microgrid in Madison County, which won approval last week from the North Carolina Utilities Commission.

Hot Springs Microgrid

Hot Springs, North Carolina photo by upinthehillscasey/Shutterstock

In February, the commission canceled a scheduled evidentiary hearing on the microgrid due to lack of controversy. Similarly, in 2017, Duke’s 10-kW Mt. Sterling microgrid faced no opposition, so the commission moved forward on approval without a hearing.

The Hot Springs Microgrid design includes a 2 MW ground-mounted solar array, a 4 MW battery storage system, and a microgrid controller. In addition to providing energy for Duke’s grid, the microgrid will be capable of operating independently from the grid to improve reliability for customers connected to Duke’s Hot Springs 22.86 kV feeder. The feeder runs about 10 miles from the Marshall Substation along the French Broad River and through the Great Smoky Mountains.

Hot Springs is a remote town of about 600 people in the mountainous western side of North Carolina. The existing feeder had a history of incurring long duration outages, and Duke anticipated it would require high cost equipment upgrades beginning in 2020.

The microgrid’s batteries are sized to meet 100% of Hot Springs’ peak load and to provide power for the 90th percentile of load for approximately four hours without any contribution from the solar panels.

A non-wires alternative

Duke examined two alternatives to the Hot Springs Microgrid: build a second distribution feeder into the town or rebuild the existing feeder to modern hardening standards. Duke found the challenges presented by the first option made it infeasible and did not develop a detailed cost estimate. And the second alternative would have left Hot Springs with only a single feeder, susceptible to outages, and no ability to offer the kind of ancillary benefits available from a microgrid.

The microgrid is designed to provide the grid with such ancillary services as frequency, voltage, and ramping support, as well as capacity during system peaks.

Duke anticipates the microgrid could be commissioned by January 2020 and operate 25 years with anticipated replacement of the battery cells after year 10, depending on the degradation curves.

Approved as a pilot project

In the order, the commission said “it is not clear that the Hot Springs Microgrid is the most cost effective way to address reliability and service quality issues at Hot Springs,” but the public would be served by approving the facility as a pilot project. The cost of the Hot Springs project has not been made public.

The commission also noted that the system benefits of the microgrid project “are material but are difficult to quantify accurately without real world experience.” However, Duke can “gain valuable experience by operating the Hot Springs Microgrid, and this experience and data collection and analysis will be beneficial in future cost-benefit analyses” for energy storage in microgrids, the commission said.

Approval of the Certificate of Public Convenience and Necessity is subject to reporting requirements, a study of frequency regulation, and the imposition of a cap on capital costs, as well as other conditions.

Duke included the Hot Springs Microgrid in its 2018 integrated resource plan (IRP) under the headings of both Integrated Systems and Operations Planning and Battery Storage and its Western Carolinas Modernization Project. The IRP includes as much as 300 MW of battery storage, as well as 1,000 MW of solar installations.

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Hot Springs is the largest microgrid yet proposed by Duke. It is also one of two proposed battery projects representing a total investment of $30 million. The other is 9 MW battery at Duke’s Rock Hill substation in Asheville that is also expected to be online by early 2020.

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