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Aggregation, Shared Access And The Future Of Solar-Plus-Storage

Aggregation, Shared Access And The Future Of Solar-Plus-Storage

Posted by K Kaufmann 
· September 6, 2017 

The New York Times got it wrong.
  In a recent story about how Green Mountain Power (GMP) is rolling out solar-plus-storage systems in Vermont, the paper suggested the effort is noteworthy because it lets customers power their homes “entirely disconnected from the grid.”

Which is true, kind of. The 5 kW Tesla Powerwall units the utility is making available to its customers allow them to operate off-grid for several hours in times of emergency or if needed to balance supply and demand on the grid.

However, the real game-changer in the GMP program is that it requires customers to agree to shared access – that is, letting the utility monitor and, at times, control the storage units, which are installed behind their meters. GMP can then aggregate power stored in the batteries and use it, for example, to lower its need to buy electricity during times of peak demand, which in turn provides savings that can benefit all of its customers.

The program is still in its early stages, says Kristin Carlson, GMP’s vice president of strategic and external affairs, but 900 customers have already called in to express interest.

“This is the energy future we see, where every [new customer] gets a meter, and they get a battery,” she says.

Shared access has long been a sensitive issue in the utility industry – another point the Times article missed. Customers have tended to balk at allowing utility control of any device in their homes – hence the difficulty some utilities have had in getting residential customers to sign up for summertime air conditioning cycling programs.

Making shared access the default option – as GMP has done, with apparently little customer pushback – signals a paradigm shift with potentially far-reaching impacts.

  Grid defection is no longer the main narrative on residential solar-plus-storage. Rather, utilities, customers and technology developers are recognizing that the way to unlock the cost savings, energy reliability and resilience that solar-plus-storage can provide is through aggregation and collaboration. “Energy independence” is still an industry buzz term, but its meaning has shifted toward a focus on customer control and choice.

“People want to control their own destiny, whether 100 percent off grid or still connected but with more control,” says Bryan Christiansen, chief operating officer at Vivint Solar, a national installer now rolling out a residential storage offering in partnership with Mercedes-Benz. “[You can bring] more distributed energy resources into the marketplace and coordinate resources with utilities.”

“I think that is absolutely the smartest solution,” agrees Leia Guccione, a principal at the nonprofit Rocky Mountain Institute (RMI), which has published a number of reports on the role of storage as a tool for energy sector transformation.

“That creates the opportunity for customers and some third parties to be part of aggregated resources that will create a positive dynamic,” she says. “Solar, smart inverters, batteries [and] smarter appliances can be part of a virtual power plant. That is where the industry should be going; that will move the market fastest and help us reform the grid for everyone’s benefit.”

This holistic view of the market also turns up in discussions on whether utilities or third parties should be the actual aggregators, owning and accessing behind-the-meter equipment and data. Guccione sees it as an open question, with arguments to be made for both sides.

“I don’t think, at this point in time, one is better than the other,” she says. “Both are a change from what we have today. We think it is important to innovate around these ideas to get more information on what we should incentivize.”

Pacific Gas and Electric (PG&E) led the nation in new residential storage installations last year, according to the Smart Electric Power Alliance’s (SEPA) 2017 Utility Market Survey. The Northern California utility is now rolling out a pilot project – in partnership with Tesla Energy – to test the grid-support services that aggregated behind-the-meter storage can provide.

In this case, Tesla is being the third-party aggregator for the solar and storage systems it is installing on 30 homes in San Jose, says Alex Portilla, PG&E’s principal project manager for distributed energy management systems. But the utility is looking at other options, he says.

“There will be some cases where we have a more active role,” Portilla says. “We’re working out where it makes sense for us. Who is in the best position to create value or transactions in the wholesale market or use [storage] assets for distribution? Where do you need control, and who controls? Who is the conductor?”

A fundamentally different conversation

Creating value – and multiple revenue streams – is what the developing solar-plus-storage market is all about, across the residential, commercial and utility-scale segments.

Simply put, the pairing of solar and storage offers a range of cost-saving and grid-support benefits for customers, utilities and the grid. Consequently, for all their wariness and resistance to solar, utilities appear to be on a much faster learning and acceptance curve with storage, according to Matt Roberts, vice president of the Energy Storage Association.

“The conversation we’re having on energy storage is fundamentally different [from solar],” says Roberts. “This is a new era of the grid. Storage is a lot more similar to what the utility has always done. It helps you move energy across time. There are so many possibilities to extract the full value; it’s going to take customers and utilities working together to make it successful.”

The residential sector has, thus far, been the smallest and slowest part of the storage market, but some industry watchers see a number of factors that could accelerate growth.

SEPA’s 2017 Utility Market Survey found that 33 utilities put a total of 557 residential storage units on the grid last year, bringing the national total to 1,762 residential interconnections.

“When we looked at the raw data from the energy storage survey, it reminded us of our first solar market survey in 2007, when only a handful of utilities had any deployment to report,” says Nick Esch, the SEPA researcher who led the survey. “More than 40 percent of the 97 utilities who responded to this year’s survey didn’t have any energy storage online at the end of 2016.”

Even PG&E, the industry leader in SEPA’s findings on the residential sector, is seeing only a trickle. The utility interconnects about 5,000 rooftop solar systems per month, Portilla says, but this past June, it had only 25 storage interconnections, and several of those were part of the San Jose pilot project.

What will change that trickle to a steadier stream is, of course, economics coupled with consumer demand. The growing electric vehicle market is expected to provide the economies of scale that will keep battery prices spiraling down.

Guccione notes that both storage and solar prices are falling faster than RMI projected in a 2014 study that estimated going off grid with solar-plus-storage would be economically feasible in a growing number of states in 10 to 30 years.

Rate increases or restructuring will also likely be a factor as residential rates go up or time-of-use rates or demand charges are rolled out, as some utilities are now proposing.

“We can say with pretty high confidence, if anything, the full [grid] defection and partial defection scenarios are going to be economically viable sooner than forecast,” Guccione says.

But, just because going off grid is economically feasible, it doesn’t mean utilities will face massive grid defections, she says. Echoing Vivint’s Christiansen, Olaf Lohr, director of business development for sonnen Inc., says that customers understand energy or utility “independence” as a measure of choice or control.

sonnen, a Germany-based storage company focused wholly on the residential market, has also partnered with GMP, providing the storage units paired with rooftop solar at a low-income mobile home park in Waltham, Vt.

 

Aggregation, Shared Access And The Future Of Solar-Plus-Storage

“You are trying to keep as much energy in the microcosm of your home, drawing as little from the grid, exporting as little to the grid,” he says, noting that sonnen’s customers can hit levels up to 70% or even 90% of their energy use. Customer demand is building, Christiansen says. Vivint made its decision to move ahead with storage based on market research showing that 52% of current residential solar customers are interested in battery storage, he says. Similarly, 51% of those looking to go solar within the next five years said they would be interested in including storage in any new installation.

Such figures are drawing utility interest, as well. SEPA’s utility storage market survey found that while only 9% of responding utilities currently offer a residential storage program, 72% are researching, planning or considering one.

“Storage may not yet be a mainstream utility resource, as solar is rapidly becoming, but clearly, many in the industry can see the point on the horizon where that starts happening,” says Tanuj Deora, SEPA’s executive vice president and chief content officer. “They understand storage will be deeply disruptive and transformative in the value it brings to the grid – even more so than solar – and they need to start preparing for those changes now.”

Visibility, cybersecurity and ease of use

The caveats in all of this are the technical and strategic issues that still need to be addressed, says Beth Chacon, utility Xcel Energy’s director of grid storage and emerging technologies.

“The market is new, and I think everyone is trying to figure it out,” she says. “What is it you want to accomplish with your batteries? We do need visibility; we do need cybersecurity; we have to work through all these things.”

Xcel is moving forward with a pilot program in Colorado that, like PG&E’s, will test the grid-support capabilities of storage, Chacon says. However, in this case, the storage will be installed both behind the meter and on distribution feeders. As at GMP, customer interest is high, she says.

But whether interest translates into technology adoption, program participation and, ultimately, market growth may depend on ease of use. Many of the solar-plus-storage systems now being launched have “set it and forget it” energy management systems that provide both the shared access utilities need for aggregation and the control and emergency backup power important to customers.

“We’re finding our customers don’t want to be told to do laundry at 2 a.m.,” says GMP’s Carlson. “They don’t want to be inconvenienced. What’s critical is to use these innovations to make people’s lives easier and make the pricing such that it makes sense for people.”

GMP’s storage program is set up so that customers pay $15 per month for the Powerwall units in their homes, she says. Guccione agrees financing must be simple, but she argues, value may also be a key factor in customer acceptance.

“Keep in mind, smartphones are a lot more complicated than landline phones because they have so much value,” she says. “Customers had very few barriers to learning how to use them. We need to take that kind of dynamic into consideration. If we provide enough value, complexity is not that big a barrier for customers.”

sonnen is going to put that concept to the test later this year when it brings its sonnenCommunity program to the U.S., Lohr says. Basically, the system is a community-level platform that allows residential customers with solar and storage to buy and sell power among themselves. In Germany, thousands have signed up to participate.

The U.S. version will be connected to the grid, he says, so it can also offer grid-support services, and participants will get credits on their bills for excess energy they make available to others on the platform, he says.

While Lohr would not divulge the location or other details on the rollout, he did say sonnen has partners and is investing its own resources to get the program off the ground in the U.S.

He believes getting residential storage into the energy mainstream will not be linked to absolute penetration levels, but to specific applications reaching a critical mass in different areas, based on the value and benefits they deliver. Rather like what’s happening at GMP.

“We are on the edge of this innovation and this technology that is happening in storage,” Carlson says. “There will be innovation that comes out next year; there will be something we can’t imagine. We want to be nimble enough for our customers to take advantage.”

Of course, the growth of residential solar-plus-storage with shared access is part of the much larger changes going on in the energy industry as more distributed energy resources, on both sides of the meter, come onto the grid. Keeping pace with technological change – and the unpredictability it brings – will require a commitment to cross-industry collaboration and finding solutions that optimize benefits for customers, technology providers, utilities and the grid.   


K Kaufmann is communications manager for the Smart Electric Power Alliance. She can be reached at kkaufmann@sepapower.org.

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Why Green Mountain Power Is Embracing Energy Storage

Posted by Josh Castonguay 
· April 24, 2017 

It’s simple, really: The energy industry needs to change. The bulk grid electricity system is antiquated, inefficient and costly to maintain. The current system has remained largely unchanged for the past 100 years, and it is no longer sustainable, given the threat of climate change that brings increasing severity of damage from storms. Imagine what the outcome would be for any other business that lost more than half of its product before it got to customers.

Josh Castonguay

Josh Castonguay

At Green Mountain Power (GMP), it became clear that we had to forge a new path with innovative grid solutions that would transform this delivery system as we know it today, and an integral part of a transition to a distributed energy system is energy storage. This can come in a few forms, including thermal energy storage, which has been around for decades in the form of controlled water heaters and electric thermal storage units, and battery energy storage, which has more recently become a viable option on the grid because battery pricing is significantly declining. We realized early on that we needed to learn as much as we could, as quickly as we could, about how to tap into the many value streams that storage can provide our customers in transitioning from the bulk grid to a more cost-effective energy system that puts homes, businesses and communities in the center.

Large-scale storage, large-scale benefits

Our first venture into grid-scale energy storage was our Stafford Hill Solar/Storage Park. This started as a 2.5 MW landfill solar project and evolved into a solar and storage facility. In late 2013, shortly after we began design on the landfill solar project, the Vermont Department of Public Service and the U.S. Department of Energy joined forces to offer a grant to a project that deployed energy storage. GMP quickly partnered with a Vermont company, Dynapower, to design an integrated storage solution that would be paired with the already planned PV system on the landfill. At that time, based on the value streams, it made sense to look at two types of battery systems: lithium-ion and advanced lead acid.

We had developed a few key use cases to be provided by the energy storage project, including peak shaving, solar smoothing, frequency regulation, power quality/voltage management, and grid resiliency/islanding of a nearby emergency shelter. With this in mind, we developed a system that consisted of four 500 kW Dynapower multiport inverters, with each inverter connected to 625 kW of solar PV, 600 kWh of advanced lead acid batteries and 250 kWh of lithium-ion batteries for a total of 2.5 MW of PV and 3.4 MWh of battery storage. This design allowed for fast ramping provided by the lithium-ion batteries, with the longer-duration energy provided by the advanced lead acid batteries. Today, we are able to achieve both the fast ramping and longer energy duration, all with lithium-ion technology.

A main value stream that was identified for the system was participation in the ISO New England frequency regulation market, which was recently updated in terms of allowing new technologies such as battery storage. The Stafford Hill facility was the first battery project in ISO New England territory that was accepted into the frequency regulation market, and it provided ISO New England with a solid baseline of how well a fast-acting battery could perform against a market signal.

In addition to the revenues received to directly lower costs for customers from the regulation market, the solar+storage system has been successfully deployed to mitigate our peaks. On Aug. 12, 2016, New England hit its summer peak during mid-afternoon. We dispatched our Stafford project against that peak, providing nearly 2 MW of peak-reducing value from a combination of the solar and the storage during the peak hour – saving GMP customers nearly $200,000. That amount of savings demonstrates the tremendous value of storage to lower costs for customers and forge a new energy future. 

In addition to grid-scale energy storage, behind-the-meter energy storage will play an increasingly important role in our grid transformation. Leveraging this type of energy storage creates an even more granular level of control and power quality management. With tight energy platform controls connected to distributed, behind-the-meter storage, we can optimize voltage on the grid and run the system much more efficiently, such as by using a technique called conservation voltage reduction.

Conservation voltage reduction, or CVR, is a practice whereby you lower the operating voltage of the distribution system and reduce the amount of energy consumed by certain types of loads. The trick is in how to ensure that your voltage will never drop below acceptable ranges as you move further down the distribution feeder. This is typically mitigated by setting voltage regulators to take into account the drop across the distribution system and results in an uneven voltage distribution down the line. With distributed storage resources, you can begin to tap into the reactive capabilities of the inverters and provide a much smoother voltage profile across the distribution network. The potential even exists to remove traditional voltage regulation equipment such as line regulators and capacitor banks. And, of course, behind-the-meter storage will provide the host customer with a clean, quite-maintenance-free backup power system that will automatically kick in during times of outage.

Just like grid-scale storage, these behind-the-meter systems can all be aggregated and utilized to reduce peak energy demand and reduce costs for all of our customers. If there is one word that I would use to summarize energy storage, it would be “flexible.” As sure as I write this today, there will be even more value streams down the road provided by having a fast and flexible energy resource distributed around the grid. The vast majority of grid issues are resolved with either load, generation, reactive power, voltage controls or a combination thereof – energy storage can provide it all!

Going off the grid

As we began to deploy our energy home transformation offering known as the “eHome,” which is a comprehensive energy makeover focused on reducing customers’ cost and carbon while improving their comfort, it only made sense that we evolved and started offering customers a package that included battery storage and, from there, the ability for customers to go off-grid.

We look at the off-grid option as serving two main purposes: First, if a customer simply wants to disconnect – or is building and does not want to connect to the grid in the first place – we make that possible. Second, we believe there will be strategic locations across our system where it will actually become more cost-effective to serve the customer via an off-grid solution, rather than with traditional poles and wires.

Although we believe that the vast majority of customers will benefit from being interconnected to each other and sharing energy resources on the power grid, there will be pockets where it becomes more costly to maintain long, rural poles and wires in our Vermont service territory than it would be to serve customers through an off-grid solution. An example of this for GMP came in the form of a Vermont state campground. The only electrical loads at this campground were a few bathroom facilities with lights and hot water, and the park is only open during the summer months. This small amount of electricity usage still required a long, single-phase distribution line to feed it. This line required routine maintenance, such as tree trimming, and had to be put back up anytime a storm rolled through and knocked it down. It became clear that serving this small load on a seasonal basis could be easily achieved with an off-grid system, thus not only improving reliability for the campground, but also reducing costs for all of our customers by eliminating the need to maintain the line.

All of this work shows a focus on transforming our energy future; how we produce, deliver and consume energy; how we leave the planet better than when we found it; and how we improve customers’ lives through reduced cost, improved comfort and greater reliability. The grid of the future will be one that relies on many interconnected, choreographed resources all working together to turn an energy-delivery model that is barely 50% efficient today into one that is more efficient and sustainable for homes, businesses and communities.   


Josh Castonguay is vice president of innovation at Vermont-based utility Green Mountain Power.

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