Utilities need to tackle energy storage as a system, not a project, says one expert, especially if they wish to recoup the full value and receive all of the benefits of this flexible technology.
The drive to reduce carbon and the remarkable cost reductions in solar PV and lithium-ion batteries is causing disruptive change to the electricity system.
Ever-growing levels of distributed energy resources (DERs), such as solar PV on the generation side and electric vehicles (EV) on the demand side, will push existing electricity networks to the limit of their current design. An early example of this occurred in the fall of 2013 when the Hawaiian Electric Company for distributed solar installations.
While DERs are essential to meeting carbon emissions reduction goals, they challenge the historically centralized paradigm for how to design, build and manage an electricity system.
Without the proper foundation of utility-integrated energy storage and software controls, renewable energy resources will face increasing technical headwinds, and valuable carbon-free electricity will be curtailed in the name of system stability and reliability.
Development of energy storage is crucial to managing this change. Why? Because it is a superset asset – no resource has more flexibility to serve as generation or load and to produce or absorb both real and reactive power. The coming wave of EVs and solar PV will increasingly depend on energy storage.
Over the past two decades we have seen two waves of front-of-the-meter energy storage growth: the pilot wave, followed by the grid-connected wave. But the third wave, and arguably the most important wave is the utility-integrated wave and this is just beginning.
More work needs to be done to accelerate this phase of energy storage development by both the industry delivering the technology and the utilities adopting it.
A Project Approach Leads to Dead-Ends
The single most important aspect when approaching energy storage is to look at its implementation as a system. Utilities are used to implementing new technology on a project by project basis. However, with energy storage this undervalues and slows down the progress of the technology at best and at worst can lead to complete dead-ends and expensive write-downs or reworks.
Rather than understanding in detail exactly what grid problems need to be solved and specifying a system that can solve those problems, a project-based approach is characterized by a narrower, more short-term mindset where the focus is on getting the system in the ground within budget. A project approach neglects to look ahead at how the second and third energy storage systems (ESSs) will be managed in concert with the first one. It does not value the flexibility to swap out components as technology improves or extend to new scenarios beyond the initial scope in the future.
A System Approach Begins with the End in Mind
A programmatic approach to designing, procuring, deploying, and operating an integrated energy storage fleet is crucial to unlocking the technology’s maximum value. Energy storage offers value across the traditional G, T, and D (generation, transmission, and distribution) grid “silos” and those stacked values are essential to realizing its full potential.
Utilities must consider these principles and use a program approach to design a scalable ESS that can be developed by a process that holistically considers all possible sources of value and can be intelligently managed across all of these silos.
The ESS program approach begins by identifying grid needs and value-creating applications using quantitative analysis to define performance requirements agnostic to project size, battery chemistry, or vendor. It starts with a custom, analytical study of the utility’s grid and how energy storage might be used to solve problems (current or anticipated) or create additional value on the grid. A system architecture is then defined around standards-based communication protocols to maximize flexibility in implementation. Design of fleet control algorithms then flows directly from the original value-creation analysis.
Bulk and local control software is selected to meet the specifications and standards, and ESS components (batteries, PCSs, etc.) are selected that meet the program specifications and integrate efficiently into the overall architecture in support of fleet performance requirements. Hardware components are installed and commissioned as supportive elements to an overall fleet approach rather than as isolated, individual elements. As the energy storage fleet is mobilized, performance can be refined and improved through flexible reconfiguration of fleet controls.
An open standards-based architecture enables fleet growth over time as grid needs change, and expensive components can be added incrementally as costs fall and technologies improve.
For utility-integrated energy storage to deliver its full value to an owner, the control software needs to orchestrate the fleet to perform the following multiple, simultaneous tasks:
- dispatch both real and reactive power;
- factor in local circuit conditions and bulk power system opportunities; and,
- coordinate with the SCADA and DMS software that controls the overall distribution system.
The utility-integrated software control platform must run on open standards to ensure the broadest interoperability with different suppliers and different technologies. The entire system requires intelligence at both the local and central-control level because the local level is where 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. Indeed, by building system intelligence so that applications can be quickly developed, precisely configured, and dynamically prioritized, utilities will end up with a software framework for rapid innovation that ensures storage resources will have their maximum positive impact.
Managing Risk and Cost with Open Standards and Diversity
An ESS program approach separates steps that are high risk and require more customization from those that are low risk and highly commoditized (see figure 2). Program risk is mitigated by tightly integrating the steps that are unique to the utility, such as the initial value creation analysis and controls design, with utility practices and procedures. An open standards-based approach enables “plug and play” of individual hardware units to help maximize competition between vendors for the most expensive components. Further, technology diversity provides commercial and technical risk mitigation. Reliable outcomes are achievable alongside program flexibility by strictly defining the architectural structure and enabling flexibility and scalability within it.
Energy storage has made important progress toward reaching a third major wave of growth driven by utility-integrated projects. In the industry’s first twenty years, the technology has been validated and has matured as demonstrated by the PJM and Aliso Canyon projects. However, substantial opportunity remains available through full integration of energy storage into distribution systems. These utility-integrated systems will prepare utilities to accommodate the coming wave of distributed solar generation, electric vehicles and other energy resources.
Rogers Weed is Vice President of Product Management at Doosan GridTech.