Battery-based energy storage could provide up to 13 different services to the US electricity grid, while the usefulness of the technology increases the more ‘distributed’ it is along the system, according to a new report.
Sustainability group Rocky Mountain Institute, which in 2014 merged with Carbon War Room, the climate change combating non-profit group founded by billionaire entrepreneur Richard Branson, issued “The economics of battery energy storage”, last week.
The report examines what services batteries can provide to the grid, where batteries need to be on the grid to deliver each of these services, how much value batteries can generate when performing multiple tasks at high utilisation (known in the industry as ‘benefit stacking’) and finally what barriers exist from allowing batteries to provide those services.
The report is essentially a high-level repurposing or re-reporting of conclusions commonly reported as held by a number of experts within the energy storage industry. At the beginning of this year the largest regulated electric delivery business in Texas, Oncor Electric Delivery, proposed that it should be allowed to install 5,000MW of mostly customer-sited energy storage. Based on a report it commissioned from consultancy The Brattle Group, Oncor said wholesale markets and transmission and distribution (T&D) systems alike could benefit from the use of storage but that the economics of doing so are prohibiting deployment.
At the time, one energy expert, Melissa C Lott, said the regional electricity transmission and distribution operator’s plan to install energy storage batteries could enable ‘benefit stacking’as a way of overcoming “crippling challenges” faced by energy storage.
Similarly, a small municipal utility in Ohio recently decided to build a 7MW storage facility connected to a 4.2MW solar plant, playing into the fast-acting grid frequency regulation market while also smoothing and shifting the output of the solar farm.
In order to examine the issues, RMI identified four distinct case studies in different regions of the US and discussed the value of the multiple battery uses appropriate to each. Energy storage is used at commercial scale in the US to manage demand charges, and the first example in the RMI report looked at adding frequency regulation, resource adequacy and energy arbitrage to a battery installed in San Francisco to provide commercial demand charge management.
In New York, sources including trade and technology group NY BEST have previously told PV Tech Storage that spending could be saved in infrastructure and network upgrades through using energy storage instead, due to New York’s unwieldy and ageing grid having been built up through the years in a densely packed urban environment. RMI said a battery in New York, installed for this reason could also provide services to the ISOs and RTOs, while ensuring resource adequacy.
The final two examples looked at a residential customer installing a battery system to manage their utility bills in Phoenix, Arizona, who would be able to mitigate their own demand charges and optimised their rooftop PV for time-of-use, while providing similar network services to the New York case study; and a similar example in San Francisco, where a customer’s primary aim for the storage was to maximise solar self-consumption, again while providing the same sort of services as the previous two examples.
New business models should be 'high priority'
Crucially, in terms of the barriers to this sort of deployment, RMI looked at measures to enable “aggregation” – connecting together the capabilities of a large number of small-scale, behind-the-customer storage devices to collectively carry out network tasks and services. This is sometimes known as the “virtual power plant”, a concept transmuted over from demand side management. Again, this concept has been trialled on a pilot basis in several global regions, including German battery system maker Sonnenbatterie’s trials for “100% renewable utility” Lichtblick. Under one of those trials, householders are provided with a payment from the utility in return for making the battery available to the network operator as needed – while the devices continue to enable the homeowner to self-consume PV power.
It should be a “high priority” for grid operators, regulators and utilities to create business models that “take advantage” of the way in which battery storage could be used to provide a number of network services, alongside a primary service such as household bill management, the report stated.
Without this stacking, RMI argued, “energy storage systems deployed for a single customer-facing benefit do not always produce a net economic benefit”. Furthermore, the report’s authors argued, utilities and ISO/TRO organisations should seize opportunities presented by the fact that customers are likely to start adopting storage for bill management anyway.
Finally, the report noted that of the three positions on the network where storage can be deployed - behind-the-meter, at the distribution level and at the transmission level. While stating that the value of services varies greatly from example to example, behind-the-meter storage can, “technically provide the largest number of services to the electricity grid at large”, RMI said.
Rocky Mountain Institute found that distributed energy resources including behind-the-meter batteries have developed more quickly than the regulations around them, as well as the corresponding electricity rates and utility business models. “Many barriers” still prevent battery storage from achieving maximum value and benefit, the Insitute said, and gave recommendation to remove these barriers for regulators, utilities, the research community and for the developers of battery storage and other distributed energy resources.