An Industry First, Distributed Energy Storage System Dispatches Electricity to California Grid

Marking a US power industry first, a “smart” network of distributed energy storage systems installed on-site on utility-customer premises successfully bid into and supplied electricity to California’s power grid via the California Independent System Operator (CAISO) real-time, day-to-day wholesale power market.

Aggregated by pioneering smart grid technology developers Stem and Olivine, the distributed energy storage network functions as one large, utility-scale energy storage asset. Smart battery storage systems are installed at six Pacific Gas and Electric (PG&E) commercial customer sites.

“Stem’s participation in CAISO proves out the theory that customer-sited energy storage can be used to provide multiple services from a single asset,” Ted Ko, director of policy for Stem, said. “Stem leverages our proprietary predictive analytics at the customer level to forecast demand management needs, then uses the forecast excess to bid into day-ahead and real-time markets, protecting customer needs while further optimizing the system.”

Transforming Energy from a Cost to a Profit Center

The 18 customer-sited intelligent battery storage systems that make up Stem and Olivine’s smart energy storage platform have been installed under the umbrella of PG&E’s groundbreaking Supply-Side Pilot (SSP) program. The investor-owned utility launched the SSP program in response to the California state government’s enactment of a mandate that requires California’s investor-owned utilities to acquire 1.325 GW of power storage capacity by 2020.

Stem and Olivine’s distributed smart battery storage network not only enhances the efficiency, overall performance and resilience of the power grid, it converts customers’ energy usage from a cost center into an asset that generates revenue and profits upon installation and for many years, even decades, thereafter, Stem CEO John Carrington said in a company statement. “The ability to leverage customer-sited storage for multiple applications is the foundation for unlocking the full potential of energy storage for both customers and the grid.”

Once in place, those capabilities are highly replicable across other markets in the U.S. and around the world, he added.

A Distributed Energy Storage First

Olivine manages the distributed smart battery storage management network platform. An SSP participant, Stem supplied the network’s real-time predictive analytics, which monitors and forecasts grid market and on-site conditions to optimize storage and dispatch of electricity to reduce utility customers’ electricity bills and generate revenue by selling power into CAISO’s real-time market on a daily basis.

Two grid-connected meters are up and running at Adobe’s Silicon Valley headquarters. Others are operational at the InterContinental Mark Hopkins, the InterContinental San Francisco, Rhoda Goldman Plaza senior living facility, and the San Francisco Civic Center Holiday Inn.

This is the first time in US power industry history that energy storage technology has been used to participate in a grid operator’s real-time power market, the companies said. Stem has been building up to this point for some time, collecting data extensively across six customer sites for more than one year, however.

“Stem has been working with Olivine to bid our aggregated storage fleet in the day-ahead market for over a year, successfully meeting 100 percent of bid capacity on time,” Ko said. “We’ve submitted bids hundreds of times, and our bid was accepted in the day-ahead market over 40 times. With this experience, we’ve refined our algorithms and built in system automation, enabling us to move from day-ahead to real-time markets.”

Power Industry, Regulatory Push Me-Pull You

Utility adoption of smart battery storage technology is rising fast. Longstanding power market and industry policies and regulations across the 50 US states is constraining growth, however.

Operating within the bounds of strictly and predominantly state-regulated market environments since the early 20th century has left utilities ill-equipped and loathe to invest in new technologies and adapt to rapidly changing market structures and mechanisms, or to compete or collaborate with an expanding variety of younger, smaller and nimbler tech-driven market entrants.

Joining with the utilities, power industry regulators, state governors and legislatures in most US states have either been opposing or have been much slower than California and a minority of other states to institute integrated policy frameworks and associated reforms. That’s true not only for distributed energy storage, but for renewable energy, such as distributed solar and wind power.

Stem and other smart energy storage proponents are far from dissuaded.

“When considering prices in other energy markets and from a long-term perspective, we see our ability to automate real-time dispatch into our revenue streams as a tremendous value to Stem and to our customers,” Ko said. “As we look beyond California at markets across the country, we hope that the automatic integration of fast-response customer-sited energy storage can serve a capacity need while at the same time helping to reduce volatility in energy prices.”

Lead image credit: Stem.

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Andrew reports on renewable energy, clean technology and other issues and topics from posts abroad and here in the US.

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