Who is East Point Energy?
East Point Energy is a development firm focused on the origination, construction, and operation of energy storage projects. Our team is developing gigawatts of energy storage projects throughout the country, helping to transform the grid into a renewable, resilient, and affordable system for generations to come.
Our team is comprised of hard-working, strategic problem solvers who are passionate about sustainability. Success for us is measured by delivering affordable energy storage solutions that benefit the grid, communities, and our environment.
What is the difference between standalone energy storage vs. generation paired with energy storage?
Operational flexibility and siting considerations are the two primary differences between standalone energy storage and hybrid models – generation paired with storage.
First, standalone energy storage has more operational flexibility relative to a hybrid resource, since it does not have to interact and operate in parallel with a collocated energy generation source.
Second, standalone energy storage systems have significant energy density (i.e. the amount of power or MW within a given footprint). Stand alone storage can be sited in areas with high electrical load (typically urban) without needing large tracts of land. These high load areas are often the locations on the grid that benefit the most from the energy storage, by providing grid support and avoiding the need to build new generation and transmission facilities.
Additionally, these projects benefit the grid because energy storage facilitates the integration of low-cost renewables.
How is the footprint of standalone storage different from the footprint of other generation sources? In other words, what can you do with storage that you can’t do with a new generation plant?
Energy storage has the capacity to do everything a new generation plant can do. It does not produce any emissions or byproducts, which sets it apart from fossil fuel burning power plants. Another benefit is that standalone energy storage projects can be sited in populated areas with minimal impact to the surrounding communities.
Additionally, unlike other generators, energy storage can store energy at times when demand is low and supply is high and vice versa – providing energy to the grid when demand is high, and supply is low. Energy storage can react near-instantaneously to provide necessary ancillary services to the grid, ensuring the moment-to-moment stability of the electric system is maintained (i.e. maintaining frequency to avoid outages).
When deployed effectively, these attributes of an energy storage system can yield lower energy costs and strengthen grid reliability.
How can standalone storage affect reliability and grid resiliency?
Standalone energy storage improves overall grid reliability in several ways:
- Maintains grid stability by responding to grid needs almost instantly.
- Maximizes intermittent, renewable generation by reducing renewable curtailed energy (i.e. energy that would otherwise be wasted).
- Provides peaking capacity during periods of high grid demand that would otherwise require use of lower-efficiency, higher cost generation resources.
- Replaces retired (or soon to be retired) generating capacity.
- Increases the flexibility of the current transmission and/or distribution system, potentially deferring the need for new utility facilities (e.g. substations, power lines).
The items that contribute to energy reliability also improve resiliency by helping prevent outages. Additionally, energy storage can be designed to serve as backup power for a potential grid outage, increasing the overall system resilience.
For example, standalone energy storage can be used to support and maintain the ongoing operation of critical local infrastructure (e.g. hospitals, emergency shelters, etc.) during an outage following extreme weather events.
Why is it important to have third party ownership in addition to utility ownership?
Currently, third-party ownership of grid-scale energy storage assets is not allowed in North Carolina.
In a market like the Carolinas, third-party ownership of power plants and energy storage assets by independent power producers, like East Point Energy, would provide the following benefits:
- Reduced cost to utility customers (i.e. ratepayers)
- Utility-owned assets are rate-based, ensuring utilities earn a guaranteed rate of return on invested capital. Conversely, utilities may not earn a rate of return on costs associated with a long-term revenue contract with a third-party.
- In pursuit of a long-term revenue contract, third parties would participate in a competitive solicitation, ensuring that ratepayers are receiving the benefits at the lowest possible cost.
- Respond quickly to a change in market and/or grid conditions that requires new generation.
- As opposed to third party independent power producers, utilities might not be best positioned to move quickly due to other competing priorities.
- Capitalize on development, construction, and operational experience from other markets.
- Third parties can leverage experience from other markets and states to deploy cost competitive solutions in a timely manner.
What would make the Carolinas a more attractive marketplace for investment in standalone energy storage capital?
I would expect that with the right market signals, the Carolinas could see significant standalone energy storage activity and subsequently, significant capital investment in both states.
That heightened level of market activity starts with a sizable and enduring procurement target for standalone energy storage and the allowance of third-party ownership via long-term revenue contracts. The industry continues to see this play out in other states, including Virginia, Illinois, Connecticut, New York and California.
The Carolinas would draw significant interest from companies like East Point Energy if the states decided to move to a wholesale energy market. We expect that this shift would yield the largest impact in terms of attracting new investment in the state for energy storage projects.
As previous studies on this topic have indicated, entrance into a wholesale energy market could yield significant savings to consumers while providing clear market signals to third-party generators for when and where additional generation is needed.
East Point Energy sees the Carolinas as a region with significant market potential for standalone energy storage. We look forward to working with regulators and others to open the market for third-party energy storage providers.
The Carolinas Clean Energy Business Association (CCEBA) thanks Tyler Cline, East Point VP of Project Development, for doing this interview with us.
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