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Stem’s distributed storage targets Hawaii’s renewables integration and grid issues

The US state, driven by its island geography and high penetration of PV, has quickly become one of the most talked-about global regions for energy storage. Image: Image: Flickr user: tdlucas5000.
US commercial energy storage provider Stem Inc has deployed its first system in Hawaii, for a pilot project that could help the state’s main utility reach renewable energy goals “better, and at lower cost”.

Stem and Hawaiian Electric are conducting the US$2.1 million pilot which will include the installation of a 36kW energy storage system at the premises of a flower company, Watanabe Floral, on the island of O’ahu.

The commercial storage system will provide demand charge reduction for Watanabe Floral and is part of a 1MW pilot programme Stem is undertaking on the island. It has been launched through Energy Excelerator, which aims to provide targeted support to innovative companies and technologies. An initiative of the Pacific International Center for High Technology Research (PICHTR), Energy Excelerator helps startups and other companies with a working prototype and more than two members of staff to develop new energy products and services. US$1 million of the project’s funding came from Energy Excelerator.

Following Watanabe Floral, other buildings including the Honolulu Museum of Art will get storage systems installed too. While the storage will respond to spikes in energy use and allow the businesses to make savings on energy bills, the systems will also be used to help integrate renewables and provide grid balancing services to the utility.  

As the state with the most solar PV capacity installed per capita and the highest oil prices in the US due to its ‘islanded’ energy situation, Hawaii has looked to energy storage at various scales to help integrate the variable generation from renewables and to firm up its grid. The recent closure of a state-wide PV net metering programme for new customers was partly justified on the basis of investment by the Hawaii Electric Companies (HECO) group into smart technologies, including energy storage, instead.

Other recent measures to enable flexibility to add more PV include the installation of a 52MWh battery on another of the islands, Kauai, which will ‘time shift’ stored solar energy for use in meeting evening peak electricity demand.

Business models with stacked benefits

Stem has been putting its storage systems into US offices and factories, providing an economic benefit to the user in allowing them to dramatically reduce time-of-use based charges. Most of the US has in place peak demand pricing for businesses, which can constitute as much as 50% of an enterprise’s electricity bills based on the short periods of highest energy consumption in a month.

Much of the early market movement in the US in energy storage has been on this basis. A recent report from credit advisory firm Moody’s highlighted commercial and industrial (C&I) peak shaving as the “most promising” application for energy storage in economic terms. Other providers including SolarCity are already also playing into this market.

However, Stem has also been evangelical about the potential for using customer-sited (‘behind-the-meter’) storage to provide critical services such as frequency regulation of the grid, responding quickly to signals to match supply and demand of power. The company is thought to be among the first to do so from aggregating storage systems into ‘virtual power plants’ – combining the capabilities of a number of interconnected behind-the-meter devices, controlled centrally by an operator. To this end, the company was contracted by utility Southern California Edison last year to provide 85MW of aggregated behind-the-meter energy storage.

In the O’ahu trial, Stem’s data analytics software will collect weather forecasting, past usage and other data to predict the peaks in energy demand and consumption, drawing on the battery when demand peaks to reduce or eliminate drawing from the grid.

In addition to this system-level benefit, the grid operator will be able to use some of the stored energy in the Stem system to add stability to the grid when the solar output is variable and when the network reaches peak demand. This multiple-use application of energy storage capabilities has gained traction as a concept recently. Commentators including energy experts, sustainability groups such as Rocky Mountain Institute and others have recently talked about how “benefits stacking” i.e. conferring multiple benefits to both system owner and grid network simultaneously from storage devices, is the best way to capture the technical and economic value of the technologies.

In a recent PV Tech Storage commentary piece, Younicos spokesman Phil Hiersemenzel strongly criticised a report which seemed to demonstrate that energy storage is still too costly to benefit the grid in France. Hiersemenzel said the trial, which only seemed to look at single use applications for storage i.e. storing and shifting solar or balancing the grid, was flawed.

Stem's latest project in Hawaii will seek to benefit both the customer whose premises the storage is deployed at, as well as the wider network. Image: Stem Inc.

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