According to GTM Research, the US deployed just over 60MW of energy storage in 2014, mostly at grid scale. One firm, Greensmith, which produces software control platforms for storage as well as delivering turnkey systems for customers including large power producers and utilities, claims that having worked on 23MW of projects last year, the company was involved in the installation of around one-third of the total deployed.
This week the company launched StorageView and StorageModel, software that assists in the design and modelling of energy storage systems.
At a basic technical level software determines how well the hardware installed interacts with the battery and other components. It can manage the battery for optimum lifespan and closely monitor energy use. At the larger, more expensive scales of energy storage, software can actually alter the value proposition of a storage system significantly.
Along with other commentators, an analyst at another research firm, IHS, recently spoke of how critically important software is, where “in almost every case, the business model for storage relies on the technology being extremely accurate, intelligent and responsive”.
PV Tech Storage took the opportunity to speak with the company’s chief executive officer John Jung. Jung explained why he feels ‘battery agnostic’ and ‘technology agnostic’ – increasingly popular buzz phrases in the energy storage industry – legitimately apply to Greensmith and why involvement in the energy storage industry, even at larger scales, doesn’t have to be as capital intensive as might be assumed.
With regards to batteries, what makes Greensmith genuinely “technology agnostic” and why is that so important?
When we started out in 2008 there were a lot of industry claims that whoever came up with the better or best batteries would solve all the issues associated with energy storage. Our view has always been that it’s a system-type problem and an opportunity, and while batteries are important, that’s just simply a ticket to the ball game. It’s really about understanding the nature of the grid congestion problems that you want to solve and devising a complete system inclusive of bleeding edge software that allows you to do that meaningfully. We also thought that it was horses for courses of how you utilise battery technology. In that there is no single battery that’s going to be appropriate for all different applications.
When was the decision made that this would be the right strategy to pursue?
When we decided to go with the [battery agnostic] strategy in 2008 and 2009, I think it was counterintuitive to a lot of people. Again there was this quest for a ‘killer app’. That’s a term we use in Silicon Valley, where you’re going for a piece of intellectual property that’s really gonna define everything, like a transistor, or something. We never believed that there was a ‘killer app’ in this space, that battery innovations would not end anytime soon, that you’d have different chemistries that are discovered and are eventually able to commercialise and become much more production pervasive. But the thinking really originates from our view that software was really the most important aspect of delivering reliable, effective, successful energy storage systems.
A lot of your customers are large power producers and utilities in the US. I assumed, perhaps wrongly, that delivering systems on a turnkey basis would be an expensive venture. Was that assumption fair?
Greensmith is not a capital intensive business. The companies that we work with – the utilities, the power developers – they’re in the business of owning assets and they’re very good at it. So our business, unlike some of our competitors who are forced to raise a lot of money in order to finance the equipment, we don’t need to do that. We can simply deliver our technology and our equipment to the would-be owners and operators of energy storage assets. We obviously do a lot of hand-holding, education, we actually do economic modelling pretty much 24/7 these days because a lot of companies come in and realise energy storage is very important and strategic for their future but a lot of them don’t have a lot of experience with the technology, or how to capture different value streams or the fact you can have algorithms that allow you to capture multiple value streams.
Then the question becomes: how do you design a system has at least five different layers of applications, some of them simultaneously, others ‘linearly’? I would say these are the sort of higher order problems that we solve using our software and experience for some of the largest power companies in the world who are again the would-be owners and operators of the energy storage technologies and systems that we deliver.
How would you sell the idea of energy storage to regions that perhaps don’t have the same acute grid congestion or grid stability problems that you’ve more commonly addressed in established base in the US and certain partnerships in other regions such as Australia?
Our technology is very modular and scalable. Those are words that a lot of people throw around but the first set of systems we ever designed and delivered were 21kWh, so they were approximately three hour [duration] systems and they were really reflective as a demonstration of our technology. However even if you look at a 20MW [system] for frequency regulation, it’s actually built up by individual building blocks and the reason why we designed our architecture that way, aside from economic benefits and economies of scale that you get, is that you can scale up or down incrementally.
We expect a significant push of Greensmith into the UK, into Germany, into western Europe, Asia as well. Over the next 24 months we see a lot of markets. One of the grid-scale value drivers that a lot of our pipeline is predicated on is a sort of a mixed, application-type strategy that looks at going after such things as capacity payments, they call it resource adequacy, that’s a big driver. You can also participate as frequency regulation markets become more ready. That combined with backup, black start, renewable or intermittency smoothing, ramp rate control and other applications, are just some of the applications that are not only being utilised on a multi-application basis, but ready out of the box with our GEMS IV technology platform as well.
The so-called developing country micro-grid market, defined as large swathes of distributed generation that are going into continents like Africa and other regions that are geographically right for large amounts of distributed solar, can actually mitigate the amount of distribution network they have to build and spend money on by co-locating a lot of energy storage to, in some cases, gigawatts worth of distributed solar.