Appalachian Power Scraps Southwest Virginia Battery Storage Project Amid Cost Hikes and Storm Damage
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Appalachian Power has canceled its planned $57.3 million battery energy storage system in Southwest Virginia, citing increased commodity prices and construction challenges exacerbated by Hurricane Helene.
The project aimed to enhance grid reliability for 2,790 customers on the remote Glade-Whitetop circuit, which experiences frequent and prolonged outages due to mountainous terrain.
Instead, the utility will focus on power line relocation and deploying advanced grid technology to automatically pinpoint outages and reroute electricity.
The decision follows earlier skepticism from state regulators and a U.S. Representative who questioned the battery system's long-term efficacy compared to a substation.
Appalachian Power has announced the cancellation of its planned $57.3 million battery energy storage system (BESS) in Southwest Virginia, citing a confluence of factors including increased commodity prices, unanticipated construction challenges, and lingering impacts from Hurricane Helene. The decision halts a project that was intended to be the utility's first step toward meeting Virginia's state-mandated requirement for battery energy storage.
The proposed system, with a capacity of 7.5 megawatts (MW) and 30 megawatt-hours (MWh), was designed to serve approximately 2,790 customers on the Glade-Whitetop circuit across Grayson and Smyth counties. This circuit, spanning over 260 miles of mountainous terrain, is notoriously difficult to access for repairs and accounts for 1.3% of Appalachian Power's system outages despite serving only 0.5% of its 540,000 Virginia customers, making it one of the company’s least reliable.
Appalachian Power spokesperson Ashley Workman stated on Friday that the utility remains committed to improving service reliability but will shift its focus. Instead of the BESS, the company plans to relocate power lines in the Skulls Gap and Chilhowie areas of Smyth County and implement advanced grid technology capable of automatically pinpointing outage locations and rerouting electricity in the Glade-Whitetop and Independence areas.
The cancellation comes despite initial excitement from local officials. Smyth County Administrator Shawn Utt expressed disappointment, noting that power outages are not uncommon in the area and residents had anticipated the battery system's benefits. The proposed site in Smyth County, a solid waste convenience station, is expected to revert to its previous use, pending discussions with Washington County, which owns and operates the site.
The BESS project had faced scrutiny during its regulatory approval process. Staff of the State Corporation Commission (SCC), Virginia's utility regulator, had recommended an alternative: building a new electric substation. While a substation would cost approximately $5 million more, SCC staff argued it would benefit a larger customer base, offer a longer lifespan of 30 years compared to the BESS's 20 years, and provide continuous power rather than the limited duration of battery storage. U.S. Rep. Morgan Griffith (R-Salem) also voiced concerns to the SCC, suggesting the battery system would only offer a “band-aid” solution for outages that can last for days in the region.