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US government contracts proving the case for batteries: Ameresco Federal Solutions


Helping businesses and community facilities in the US and in the UK to manage their energy use and save on energy costs using energy efficiency and renewable energy solutions, Ameresco has been going since the beginning of the 21st Century. The company assesses a customer’s energy needs, what energy resources are available to them, and then designs a solution to help them reduce energy use, use energy more efficiently, or increase generation available to them, often in the form of renewable energy.

Batteries are an increasingly important part of that equation. Ameresco has worked for a long time with US federal government agencies, installing new solutions or retrofitting and upgrading energy systems for the Department of Defense, Department of Energy, Environmental Protection Agency and many others. These can be among the more demanding projects technologically, due to their critical, must-run status and they must be amongst the most economically lean — under things like the Energy Savings Performance Contract (ESPC) programme, projects that can prove they will pay for themselves through energy costs saved can get funding, including through third-party financing.

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Or continue reading this article for free speaks with Ameresco executive VP and general manager, at its Federal Solutions division, Nicole Bulgarino, who tells us about why this type of project can play such a critical role in proving the case for smart energy solutions that include battery storage. Bulgarino has overseen more than US$2 billion worth of federal projects in her time at the company. We also hear about what sort of technologies and design can meet the demands of federal customers, from the value of resiliency to the ability to raise revenues and save costs.

It’s been really interesting to look at what companies like Ameresco have done for the Department of Defense, where projects can only get done if they provide a certain level of savings, and be economically efficient as well as energy efficient. Is that an accurate way to look at this type of project and what role does battery storage play in all of that?

The good news is, when you're looking at the Department of Defense, there is a strong desire and more budget being allocated to do projects that have a resiliency component to them, where the battery will be key to that in the microgrid — especially for a lot of these sites that have existing generation assets, such as a cogeneration system, or solar [or] wind. We're seeing a lot of projects get recommended for funding to go back and add that battery storage component.

Also, we are seeing in a lot of our larger projects — where we're doing these comprehensive projects [with criteria like] meeting a certain return, or cash flow — we’re seeing more ability by the [military] base to maybe count some of the maintenance savings, where there might be a different savings stream or savings value, where they might be able to retire diesel generators, and more openness and support to not only do energy efficiency, but also grow onsite generation in a way that provides that resiliency element or reliability. Being able to have a system that can be able to come online because their system is not as dependable with the grid. The best way to do that technology-wise, is with the battery.

We've come a long way in a short time from the overall perspective of the DoD and in their recent Defence Authorisation Act, there is language in there that also encourages using creative third-party financing streams and other incentives to help make sure that our bases are protected from a security standpoint.

What’s been the pathway towards making customers more aware of these solutions and then for them to choose to adopt them? Has it been a difficult thing to prove that carbon neutral solutions can be reliable and cost-effective?

You can relate it to something that they understand: a lot of our military bases understand diesel generation, switching to it and using that as a backup source.

We can say, “You're not necessarily getting rid of the diesel generator, but you're using this battery, the most advanced technology. The microgrid control [system] allows us to use the battery to be able to seamlessly do this. You as an end user would not know where your power is coming from. That gets their attention.

The other thing to point out, which is a great selling point, is there's many areas where the rate structure that these bases, and certainly campuses or even other commercial and industrial customers, they're paying very high time-of-use rates, or peak demand rates to their utility.

You can model this so nicely now and show them exactly what that battery can discharge and charge with their load versus what the utility rate is charging. And that's a pretty powerful tool to be able to show before you’ve even installed anything.

That gets a lot of traction and we've done a couple of projects that have been more for the benefit of demand shifting than anything else. That's great for the utilities too, because it helps lift a burden on them as well.

In terms of demand shifting, or peak shaving, we would typically have seen earlier commercial peak shaving projects with a fairly short duration of energy storage. What sort of direction is that heading in, do you see three or four-hour duration projects for those applications?

I think it really depends on how long the customer’s peak load is. When is that peak and how long is it? Really understanding the energy used for that site, and then of course, the rate structure.

We've done a couple of hours, we've seen three or four-hour discharge [projects]. Obviously it gets more expensive, so you want to make sure that you’re sizing as you really need to. There may be other things you can do and because we're an energy company, we're all about decreasing that peak load the best that we can through energy efficiency means because that would be the most sensible thing to do first.

Once we can do that, it's all about trying to make that small and short. We've been using studying flow batteries, which will give us that longer duration, which may help with longer discharge periods like that, it may also help in more remote sites as well, or where you're trying to cover for certain periods where the utility may not have full capacity either. For now, we're still kind of in that two-hour window, that's optimum from an economic standpoint.

Ground mounted solar at Parris Island US Marine Corps site, South Carolina. Image: Ameresco.

Battery storage ‘offers so much operational flexibility for facilities’

So with flow batteries, that remains a little bit more expensive than lithium-ion for commercial use?

Yes. We just did a study under the defence programme with (the DoD environmental tech demonstration and validation programme, Environmental Security Technology Certification Program) ESTCP, which was great. We modelled it. Now we're testing on a lab scale, the battery itself, the hardware itself, and then we'll get out to the field and deploy different projects.

The lithium-ion ones were still by far the better choice from perspectives including maintenance cost and efficiency, but they [flow batteries] had potential. Hopefully we’ll keep seeing progress on that. Because I think it's certainly warranted, we need something that has a longer duration solution to it. The more we can get real data on real use cases, that will help the market to develop too.

In terms of what you’d do on a site-by-site basis, what are the sort of technologies you’d bring in to a project? What sort of things do you provide in-house and what comes from equipment suppliers? You mentioned how important controls systems are in a microgrid-type project.

I’d classify us as an integrator. We would study what needs to be done and design the system as the architect, or maybe over-architect, of what we would recommend, and then bring in the battery components and micro grid control pieces.

For example, at our Parris Island project, we have a Tesla battery pack, 4MW / 8MWh system there and then we have a Schweitzer Engineering Labs (SEL) control, the microgrid pieces are all designed by them and their electronic parts. And then we have different solar panels. We combine all these pieces together to make the best fit for that particular Marine Corps Base in South Carolina.

Some of the other projects we've done, we may just use Tesla's controls, because it’s easier, if we weren't trying to shut the loads down in the buildings, if we're just trying to use the battery for peak shifting. I think our expertise comes in there. We're making the recommendation for the different manufacturers or the different tech that may be best for that customer.

Are there lessons that can be learned for more ‘civilian’ applications from federal projects  — whether we’re talking about cybersecurity or in proving the case for energy storage as a resiliency asset — that can then be applied in the non-federal, commercial projects

Yes, it may not be a matter of national security, but certainly just looking at something like a university where they have a central power plant or central heating plant, for that system to go down, it actually costs a lot of money, it's not easy to get it back up. Being able to have that resiliency even if it's just because they need to maintain heat in the dormitories.

When you start actually calculating how much cost it is when you do go down to get something back up. The lesson I would share is that there's value in this, let's continue to look and really understand how important energy is to you. If anything, look at your peak demand and see if it can help that way and you could get maybe some benefit from the resiliency as well as some savings economically to drive that.

Some national or global companies may have remote sites where they just don't have very good power. Being able to put in some solar power and charge a battery to have that remote capability, so they're not relying on the long power lines, or maybe they just need a temporary shut-off for some reason. The key of the battery is just flexibility. It offers so much operational flexibility for facilities.

In terms of economic value of resiliency, it’s difficult to put numbers on it but it's increasingly something that people are thinking about, isn’t it?

I think that's a really good statement. Even in my own personal life, we’re talking about how we should get our own battery system and generator, because I think people do see how vulnerable the world is. Living still in the pandemic and different things that come up, people just want to have security and we have to stay connected.

I think at least in the States, maybe not so much overseas, because I think there's more investment that’s been made in the transmission system, distribution system, whereas in the US we have aged, old, very worrisome infrastructure. Eventually things are going to have to be defined, whether its upgrades made, or it becomes more of a combination of these micro grids coexisting with the utilities, or as a resident, you may have to have your own power, because it's going to be so expensive to turn on power to be connected at certain times of the day, because they're reaching that capacity. I think you're seeing that in Hawaii, you're seeing that in England. There’ll be more ancillary revenue benefits as a battery, not maybe at the resident level, but for bigger loads.

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