Sunverge said that it and Maryland-based Delmarva Power kicked off the 0.55 MW / 2.2 MWh capacity Elk Neck Battery Storage Pilot Program.
The utility selected Sunverge for the project in a competitive bid process in 2020. The project received regulatory approvals from the Maryland Public Service Commission last year, but not before parties questioned the project’s cost effectiveness.
Sunverge will now begin acquiring customers to take part in the program, which is expected to be fully operational by the first quarter of 2022.
The project is expected to help demonstrate the value of multi-service virtual power plants and aggregated residential battery systems, both to benefit consumers and the grid. As designed, the project will provide backup power to residents of Elk Neck, Maryland, on Chesapeake Bay. It also will provide multiple grid services to increase overall grid reliability, system integration of distributed energy resources, and participate in the PJM wholesale electricity market for ancillary services.
The project is part of an Energy Storage Pilot Program that state regulators launched in 2019. In early 2020, Baltimore Gas and Electric, Potomac Electric Power Company, and Delmarva Power & Light (all operating units of Exelon Corp.), and Potomac Edison filed pilot program applications.
The commission in early November approved six projects proposed by the Exelon companies, including the Elk Neck project, the only virtual power plant to be proposed.
As described in regulatory documents, Sunverge would buy behind-the-meter energy storage systems to be installed in 110 homes in Elk Neck. Those systems would be networked together to allow them to operate as a virtual power plant. Participating homeowners would take over equipment ownership after a 10-year contract period.
Delmarva forecast that the project would have a $3.5 million cost in present value over 10 years, and would provide benefits of $1.2 million in present value over a 15-year term. The commission said that equated to a benefit-to-cost ratio of around 0.3, not including the value of unquantified benefits.
Public Service Commission staff said that the Elk Neck project had the worst cost-benefit return of all of the proposed projects that the regulatory body considered. Staff said the project should only be approved “in the interest of studying” the virtual power plant model.
The staff also recommended that the commission approve the Elk Neck project only if Delmarva secured an agreement with grid operator PJM to allow the project to participate in PJM markets. Staff said it was concerned that around half of the benefits projected for the Elk Neck project would come from PJM revenues, even though PJM at the time did not generally allow virtual power plants to bid into its markets.
In announcing that the project was getting underway, Sunverge said that Elk Neck would be allowed to provide ancillary services in the PJM market.
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