AMS CEO: Energy storage can reach scale without subsidies

on November 30, 2016

energy storage utility driveIt is often said that an energy storage project needs more than one stream of revenue to succeed and often regulatory barriers are seen as the biggest impediment to reaching that goal.

Indianapolis Power & Light’s 20 MW, 20 MWh Harding Street storage facility that entered service in May is one example. It provides grid services for IPL, but market rules in the Midcontinent ISO are not conducive to battery storage plants, so IPL has petitioned the Federal Energy Regulatory Commission to find that MISO’s rules are discriminatory and need to be revised.

However, some storage companies have built a dual revenue stream into their business model. They see the market for energy storage not as a flow of services from on one side of the meter to the other, but as more of a two-way street serving customers on both sides of the meter.

A big part of Advanced Microgrid Solutions’ business, for instance, involves installing behind-the-meter energy storage systems, but as CEO Susan Kennedy said, “We are a utility-facing company.”

That was evident in the company’s July 2015 announcement of a deal to deliver 50 MW of energy storage for Southern California Edison. Under the deal, SCE will purchase capacity from the storage systems under a 10-year contract, and expects to use the electricity stored in AMS’ hybrid-electric buildings to offset the power once produced by the decommissioned San Onofre nuclear power plant and other soon-to-be retired gas-fired plants.

But the storage system to provide the utility those services will reside on the customer side of the meter in what AMS calls hybrid electric buildings. There, a combination of energy storage technology and analytical software will enable the building owners to improve energy efficiency, lower energy bills and reduce greenhouse gas emissions.

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Utility DiveAMS CEO: Energy storage can reach scale without subsidies