Begin with the end in mind: Used and useful utility-integrated energy storage starts with a program approach
Over the past twenty years, energy storage technology has been validated and has matured as demonstrated most recently by projects like those deployed in California to mitigate Aliso Canyon problems and most recently in South Australia to help bolster their electric grid. In addition, a new wave of energy storage opportunity is arriving that is much more tightly integrated with the distribution system. GreenTech Media Research recently identified over 5GW of storage opportunities surfacing across nearly 20 different US utilities’ Integrated Resource Plans. These utility-integrated systems will prepare utilities to accommodate the coming wave of distributed solar generation, electric vehicles and other energy resources. Both the energy storage industry and its utility customers have important roles to play in realizing this potential.
On the industry side, ESS suppliers need to focus on reducing costs and system complexity by engineering storage for adoption at scale. Innovation and standardization zones need to be delineated across the physical, electrical and software elements of the system. For a further description of this concept, see our Utility Dive - 12/11/2017 article on engineering ESS for scale.
On the utility side, storage project teams must engage energy storage in a program-based, rather than a project-based, fashion. This starts with a careful analysis of the most important system-wide opportunities and problems, since storage can potentially provide so many different services. Utilities should then think explicitly about a system software architecture that can scale up to managing fleets of storage, can adapt and get smarter as it operates in the field, and can accommodate new generations of technology in each system component area (batteries, PCS, site dispatch control). Selecting the right control software platform, including support for open standards communications, is perhaps the most crucial decision in enabling a successful utility-integrated energy storage program.
A PROGRAM APPROACH HAS FOUR KEY CONCEPTS
Concept 1: The lowest risk, highest reward outcomes happen when utilities take a “begin with the end in mind” approach. What are the specific grid problems or opportunities that are highest priority? Are those well understood at both an economic and engineering level? Does the end game involve a fleet of ESSs or just a single system? The more time a utility spends on upfront thinking about what the goals are for the proposed ESS program, the less likely a utility will be to find their expansion limited or be stuck with stranded assets down the road.
Concept 2: Think through the software architecture. Grid-connected ESSs are a straightforward software problem. The control software task is to respond to a charge/discharge signal often dictated by an ISO signal or AGC command. But when the endgame is an entire fleet of ESSs and includes systems from different suppliers and featuring different chemistries, the choice of software controls is substantially more important (see Figure 1)
The utility-integrated software control platform must run on open standards to ensure the broadest interoperability with different suppliers and different technologies. The system requires intelligence at both the local and central control levels because it is at the local level that response time can be guaranteed and adjustments quickly affected. However, it is at the control center level that fleet-wide considerations and bulk power system opportunities are best evaluated. When each level of intelligence is built so that applications can be quickly developed, precisely configured and dynamically prioritized a software framework exists for rapid innovation that ensures storage resources will have their maximum positive impact.
Concept 3: Be prepared to bust silos. One of energy storage’s biggest strengths is also a weakness. As a “superset asset”, energy storage systems can be used to address the full range of real and reactive power needs. The Rocky Mountain Institute translated this capability into the discrete grid services at the generation, transmission and distribution levels of the electricity system. The challenge of this flexibility and range comes in two areas: 1) determining the most valuable use of the ESS resource at each moment of each day; and 2) working through the organizational barriers to realize that optimal value for the ESS may require the coordination of groups that have historically operated independently.
Austin Energy understood this and quickly focused their energy storage work into a circuit-oriented distributed resources project with an overarching economic goal to achieve high penetrations of renewable power while maintaining power quality, reliability and affordability. Austin Energy then appointed a cross functional team to include three executive sponsors who could span across siloed organizational boundaries to achieve the project goals.
Concept 4: Managing cost and risk during implementation. Once the broad purpose of the ESS program is settled and the storage owner has explored the full breadth of available sources of value, they are ready to move into the procurement phase. Today, most storage systems are procured on an individual basis from a full-service supplier, often using a long-term power purchase agreement (PPA) which keeps the systems and their operations at arms-length. This is partially due to the perceived delivery risk associated with the system suppliers and comparable performance and safety risks with the technology. However, this PPA strategy leaves utilities exposed to other long-term risks: use-case obsolescence, interoperability issues, and potentially expensive training, operations and maintenance costs.
Finally, the ESS activities in the program approach shown in Figure 2 below are mapped according to their level of uniqueness to the utility and the risk that the activity presents to the overall success of the program. Taken to its logical conclusion, this analysis suggests that component selection, procurement and installation should be as simple as opening the catalog and buying parts. In the end, the procurement process in an ESS program approach should be deliberately examined with step-by-step methodology to best balance both risk and cost for the utility.
Stop by our booth (#1351) at Distributech 2018 to learn how we are applying these concepts with Snohomish County PUD and Austin Energy.
And for more in-depth analysis on how you can be ready to tackle the next wave in energy storage, read our whitepaper: Making Utility-Integrated Energy Storage a Used, Useful and Universal Resource.