- More efficient source for upstream wholesale or market energy as compared to less efficient peaker plants
- More cost-effective management of grid operations resulting from increased intelligence installed at the edges of the grid
- Resource to provide ancillary services to address market shortfalls
- Ability to offer voltage regulation and power quality enhancement
- Increased grid efficiency inherent with distributed storage resources as compared to central generation with its T&D losses
The Platform for Success
The path to success in energy storage markets is a parallel one involving two separate but equally important components. The first centerpiece is an operational technology which is a scalable, flexible and “utility-grade” solar + storage platform capable of operational protocols that optimize the storage charge and discharge functions while supporting higher penetration of local renewables with beneficial impacts on the grid. The second but equally important component is a business model that serves as the mechanism for ensuring value can be harmonized and shared across the energy supply chain. Left unaddressed, as the number of distributed energy resources operating on the grid in an unstructured manner continues to grow so does the potential to cause the grid more harm than good. Platforms that enable utilities to aggregate localized intelligent storage assets and orchestrate them as a fleet of units are critical to cost-effectively optimizing operations and addressing both system and localized needs. This virtual power plant (VPP) approach also achieves the business model objective of unlocking value and harmonizing the benefits across homeowners, system owners/operators, and utilities. Access to the coordinated value streams ensures all participants are positioned to maximize their benefits from home to network. Once in place, an integrated energy storage platform also serves as an effective “grid citizen” working in concert with other prevalent smart technologies (e.g., metering, thermostats, EV chargers) and advanced analytical tools to proactively identify and address grid hot spots. A reliable utility-scale resource, VPPs are flexible and dynamic and can be reconfigured on the fly and deployed where resources are needed most. This capability can have multiplicative effect on the value of deploying integrated energy storage platforms—by 2-3 times—making the whole greater than the sum of the parts.The Rules
As demand-disruptive technologies force utilities to evolve their business models from centralized generation to something more granular which effectively integrates distributed resources, the policies and regulations influencing technology adoption are as complex as the grid management technologies needed to manage them are sophisticated. These policies and regulations must and will evolve, enabling new service models and resources that will lower electricity costs and expand the adoption of renewables along the way. New policy regulations and mindsets are being developed to support the efficient operation of markets and adoption (and fair sharing) of benefits among all participants including the following:- Residential time-of-use tariffs
- New DER interconnection rules and requirements for smart-inverters
- Smart metering and more granular usage data for residential customers
- More sophisticated resource planning models that zoom-in on local distribution network constraints to discretely value capacity and operational needs
- A focus on customer-centric reliability and grid resiliency
- Opening up wholesale markets to aggregated pools of resource that can now be sited at residential properties