Three Virginia electric utilities will add battery energy storage systems to their electricity distribution networks this year, a move that’s intended to increase the reliability of electric service and is anticipated to lower the utilities’ costs by tens of millions of dollars over the next two decades.
Battery energy storage systems store electricity when demand is low and release it when demand is high. By drawing power from batteries instead of the grid during the highest-demand periods — the hottest summer days and the coldest winter nights — utilities can reduce their transmission costs and their capacity costs, which are based on how much electricity they get from the grid during those times.
Nelson County-based Central Virginia Electric Cooperative will get three battery energy storage systems, while the Craig-Botetourt Electric Cooperative and the Salem Electric Department each will get one, according to a news release from Lightshift Energy, the battery systems’ developer.
Lightshift Energy said that the 5-megawatt systems give the utilities more flexibility to deliver power during those peak times as the demand for electricity grows across the multistate electric grid, including from large customers such as data centers.
“As Virginia continues to increase its appetite for energy storage, electric cooperatives and municipal utilities are uniquely positioned to lead on innovative applications that directly benefit their members,” Mike Herbert, co-founder and managing partner of Lightshift Energy, said in the release.
Lightshift Energy will deploy the systems in partnership with the Blue Ridge Power Agency, a nonprofit association of municipal and cooperative electric utilities that uses its members’ collective purchasing power to seek low wholesale electricity prices.
“Rising transmission and capacity costs have been a source of concern for some time, and these new battery projects will begin to control these costs,” Alice Wolfe, general manager of BRPA, said in the release.
The five battery systems are expected to come online this year. Lightshift Energy, which will own and operate them, says they will save the three utilities $100 million altogether over 20 years.
The Salem Electric Department serves approximately 13,300 customers. Its interim director, Kevin Divers, said in an email that capacity and transmission expenses are the department’s two biggest cost drivers.
Salem’s battery system, which will be installed at its Electric Road substation, will be built through a service agreement with Lightshift, which means the city won’t pay upfront capital expenses or maintenance obligations, Divers said.
“The [battery energy storage system] will improve reliability by providing a faster response to our distribution system during peak load. Additionally, it will allow Salem to reduce its overall peak demand charges, which helps support long-term rate stability for our customers,” he said.
Salem’s battery energy storage system is expected to save the department $8.5 million over 20 years. The savings could help mitigate future cost increases compared to what the municipal department would pay to provide power without the battery energy storage system, said city spokesperson Clark Ruhland.
Danville Utilities, the municipal electric utility for the city of Danville, previously signed on to two battery energy storage systems from Lightshift Energy. A 10.5-megawatt system began operating in 2022, and an 11-megawatt system is under construction.
Lovingston-based Central Virginia Electric Cooperative has about 40,000 members in 14 Virginia counties, from Appomattox and Prince Edward in the south to Greene and Orange in the north.
New Castle-based Craig-Botetourt Electric Cooperative serves 7,400 customers in six counties in Virginia and one county in West Virginia.
