First in intermountain West — and possibly the nation. But why does this matter?
by Allen Best
In November 2018 United Power began deploying a a 4.5-megawatt-hour Tesla lithium-ion battery at the cooperative’s office along I-25 between Firestone and Longmont.
It was the biggest battery in Colorado and it remained so until late 2022 when first Holy Cross Energy and then Xcel Energy came on line with their own batteries.
Now, United Power is at the front of a somewhat different line. It has eight new batteries located adjacent to electrical substations. They could, if necessary, deliver 13% of power needed by United’s members for four hours. United has 112,000 members in its service area from the oil-and-gas fields of Weld County to homes in the foothills west of Arvada.
This type of distributed outlay of batteries is unequaled in the intermountain West with the possible exception of Arizona, according to Geri Kantor, who is director of distributed energy resource project development for Ameresco, a global operator in the cleantech world that worked with United in creating the battery system.
United goes even further. Not only is it the largest distributed battery energy storage system in Colorado, says Trista Fugate, the chief marketing officer at United, “and we’re fairly certain across the U.S.”
The batteries spread out at eight different sites can be drained as needed to meet peak demands, such as on hot summer afternoons, then replenished when cheap renewable energy is abundant.
Mark Gabriel, the chief executive of United Power, says this is a big piece of United’s hyper-localization strategy.
United, and almost every other utility, will continue to depend upon electricity from distant sources, be they wind farms or even gas plants, in some cases. They can buy electricity to meet peak demands, but that comes at a higher price. And, importing power means paying the cost of using transmission lines. Plus, high-voltage transmission lines suffer losses of typically 4.2% for a 345-kV line across 100 miles.
With its original battery installed in 2018, United has gleaned insights that can apply to this greater deployment. “We gained a lot of experience in charging/discharging the batteries to understand how they work — the best time to charge, etc.,” Gabriel explained in an e-mail message.
The batteries also tie to local production of electricity. United Power has a very high rate of rooftop solar.
Declining costs of lithium-ion batteries coupled with federal tax policies have made batteries an easier choice for United and other utilities.
“They have gone down dramatically,” said Gabriel of lithium-ion battery costs. “In effect, it makes them competitive with other generation. This is especially valuable since there is a surplus of energy and a lack of capacity.” Batteries provide the capacity.
The Inflation Reduction Act of 2022 made the investment tax credit available for stand-alone battery storage. Before, the credit was only available when the batteries were paired directly with a renewable energy resource.
“That is a substantial change,” says Ameresco’s Kantor.
If still rare in the intermountain West, the distributed storage strategy being deployed by United Power is more common in California and the East, says Kantor. Regional transmission organizations, or RTOs, operate in those areas, delivering revenue opportunities for operators of storage.
United Power intends to join the Southwest Power Pool, an RTO, in April 2026. By state law, Colorado’s investor-owned utilities must become RTO members by 2030. In addition to SPP, the California Independent System Operator, or CAISO, is the second major candidate.
On May 1, United Power became independent of Tri-State Generation and Transmission, its former wholesale supplier. “I think it’s fair to say that distribution coops are watching what United Power is doing very closely because of their exit from Tri-State,” said Kantor.
Top photo: United Power’s original battery storage was installed in 2018 near its office between Longmont and Firestone.
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It’s “interesting” that United went out and built these right after they bought “surplus” renewable power from Xcel. Clearly if United can afford to buy batteries and store the power and keep their rates reasonable, they are getting it a rockin’ low $/kWh from Xcel.
As an Xcel customer, I’m thinking maybe United got too good a deal, and perhaps Xcel (and the PUC) should have figured out how to get that power to its own customers.
In any case, batteries at substations seems like one of many good concepts, and if this means that statewide we’re curtailing wind and solar a bit less, that’s a good thing.
Going forward, I looked at the most recent EIA table 6_05 and Colorado was 44th of all states in planned battery capacity additions in the next few years. And planned additions of PV were higher in each of the other three Four Corners states. Maybe our utilities and developers are waiting on IRP finalization to list in that database? Has our PR outrun our actual action?