The energy storage system will be installed by Beacon Power and operated in conjunction with Mill Creek Generating Station (MCGS), a gas-fired regulating reserve plant recently commissioned in Montana and owned by NorthWestern Energy.
The system is expected to be operational by the end of 2011.
The initial term of the lease will be 15 months, which, at NorthWestern Energy’s option, can be extended up to two additional 12-month terms.
NorthWestern Energy said it will pay Beacon $500,000 for the first 15-month term and $500,000 for each subsequent term should it choose to extend the lease to a second or third term, and at any point it can opt to purchase the 1MW system outright for approximately $4m.
Under the agreement, both the companies will jointly develop the flywheel system’s control signal algorithms to optimize the performance of the MCGS, and will evaluate the impact of the flywheel resource.
The companies will also seek to determine the optimum amount of flywheel regulation capacity for MCGS shall NorthWestern elect to expand the flywheel capacity.
Beacon Power designs, develops and is commercializing advanced products and services to support stable, reliable and efficient electricity grid operation.
