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Xcel Energy considers battery storage part of plan to reach zero-carbon system

Battery energy storage is just one technology that will help Xcel Energy reach its clean energy transition goals, said Xcel Energy-Colorado President Alice Jackson earlier this week.

The power provider currently is on track to reduce carbon emissions by more than 80 percent by 2030 from 2005 levels, with a goal to provide customers with 100 percent carbon-free electric energy by 2050, Jackson said. 

“But there continues to be a gap between hitting that 80 percent carbon reduction and getting into a full zero-carbon system on behalf of our customers,” Jackson said during the July 19 general session of the National Association of Regulatory Utility Commissioners (NARUC) Summer Policy Summit. “So clearly, there are technological advancements that we all have to be looking at to figure out what’s going to help close that gap.

“And battery storage is absolutely a piece of that puzzle,” she added. “We need to be looking at battery storage whether it’s going to be on the distribution system, the lower level for our customers and they own it, or it’s all the way up to the largest parts of the system for the duration that’s needed to meet the different gaps that we still have in order to get to that zero-carbon system.”

Katherine Peretick, a commissioner for the Michigan Public Service Commission, pointed out during Monday’s NARUC session, entitled “Connecting the Dots: Riding Above the Commercialization Valley of Death,” that the commercialization market cap is a really huge problem for developing new technology, which is vital during the current energy transition.

Battery energy storage systems enable renewable energy like solar and wind to be stored and then released when customer demand is high. There has been an increase over the last decade in lithium-ion battery production that has led to an 85 percent decline in prices, making energy storage and electric vehicles commercially viable for the first time in history.

And while there have been federal loans, grants and various assistance programs to shepherd such technology to commercialization, “other than the lithium-ion battery, can we confidently say that other storage technology has made it through that valley?” said Peretick, who moderated the discussion on how to decode a successful pathway through the commercialization valley of death.

Xcel Energy-Colorado also has been using battery storage for quite some time, Jackson said, adding that the company’s pumped hydro project in Cabin Creek has been a valuable resource since the 1950s. “For the past five years, we’ve also been focusing on the development of lithium ion-based battery storage — both small and large scale — on our system,” she said. 

“Battery storage continues to present opportunities — as well as challenges — and we are committed to exploring the opportunities in order to achieve the clean energy future,” Jackson wrote Daily Energy Insider Friday in an email.

And through Colorado’s Innovative Clean Technology process, Xcel has invested in grid-level storage on the distribution system, investigating the ability to integrate more distributed energy resources, as well as partnering with Panasonic to install commercial customer battery storage solutions, according to Jackson. 

“We also have several projects, currently under construction, that will pair approximately 275 megawatts of battery storage with large-scale solar farms. These projects are expected to be online in 2023,” Jackson wrote. “The key to bringing these projects onto the system is not only the technology itself, but the contracting, utilization, visibility and mindset of the teams.” 

Specifically, the Innovative Clean Technology process in Colorado allows small scale new technologies to be developed and integrated. Battery storage or other technologies have the possibility to come through this process and be used by power providers, according to Jackson.

“Some technologies move naturally through the improvement process and make their way on the utility systems,” she wrote in her email. “However, other technologies need a boost or pathway, a step change.”

Xcel Energy also takes part in such changes by participating in organizations such as Energy Impact Partners, where Jackson said power providers invest in new and innovative technology companies.

“This investment, from shareholder dollars, provides funding and a pathway for research and development companies to bring their concepts and products to a group of power providers and receive input and feedback,” wrote Jackson. “They also have the potential to land contracts with these power providers.”

During the NARUC session, Jackson pointed out that while Xcel Energy has been investing in new technologies for a long time, the company continues to look at: “What are the additional needs that we have as we’re solving this puzzle year after year as we’re advancing the technology and where do we need to have longer-duration battery storage, which is different technology types.”

The customer side is absolutely going to be part of this, she added. “It’s not just how does the utility solve the problem to get to a zero-carbon system, but it’s also how do customers come to the table? But we can’t have those communications about the pieces of the puzzle unless we close the technology gap.”

At the end of the day, Jackson said, not all power providers are going to have the same gaps in solving the clean energy transition puzzle going forward. 

“We’re going to need many technological innovations, from smaller scale on the distribution system to the largest scale,” she said. “We look forward to working toward solving the puzzle and providing our customers a safe, reliable and cost effective zero carbon system.”

Kim Riley

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