The key value propositions for commercial energy storage are based around “maximising economics subject to operating constraints”, according to Stem and other energy storage system integrators and operators.

Discussing the topic of operations and maintenance (O&M) of energy storage systems for a feature article in the just-published latest volume of downstream solar journal PV Tech Power, companies including US-based Stem, German-American storage integrators Younicos and UK companies UK Power Networks and Open Energi offered their views. While O&M in solar PV is a big industry in its own right, marked with a rapid growth in third-party O&M service providers in recent years, the strategies for energy storage tend to be tied more closely to the project’s originators, with system integrators and manufacturers sharing the operational and maintenance aspects of most large-scale and commercial installations.

Essentially, extracting maximum economic value from a battery system, or fleets of aggregated systems in Stem’s case, plays off against the limits of what the battery can achieve in terms of charge and discharge cycles before degradation of the battery begins to affect its efficacy.

Gabe Schwartz, Stem marketing director, said that “once the storage system is there, it’s basically just an empty battery that has the capability of storing a certain amount of energy.”

“What makes it valuable is the operation of it, pretty much second by second every day, for the entire life of the asset – a ‘smart brain’ if you will, telling it exactly when to charge and discharge in order to provide its intended value; you can call that the ‘O’ of the O&M but we think of it as the entire business that we’re in.”

While storage systems such as Stem’s can provide grid services to transmission and distribution network operators and utilities, as a commercial operator of behind-the-meter systems, its first priority is to the end customer or system host. Businesses contract Stem to install batteries that can help them lower their electricity costs, first and foremost by providing demand charge reduction.

Demand charges are levied onto commercial and industrial (C&I) electricity customers in many territories. In the US, where Stem has focused to date, these charges, calculated from a C&I customer’s most intensive periods of electricity use in any given month, can make up as much as 50% of a total electricity bill.

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Austin Energy, a publicly-owned electric utility in Texas, is delivering megawatt-scale storage systems as part of the US Department of Energy’s Sustainable and Holistic Integration of Energy Storage and Solar PV (SHINES) project.

The programme’s goal is to reduce the cost of electricity from combined solar and storage projects to below US$0.14/kWh.

By being proactive on energy storage under this DOE-funded initiative, Austin Energy will offer its commercial customers options to reduce energy costs while simultaneously providing a reliable energy storage resource for the grid.

“Integrating energy storage with solar is becoming essential as we achieve the City of Austin’s goal of 55% renewable energy by 2025,” said Jackie Sargent, Austin Energy general manager. “The Austin SHINES program is more than a technical pilot; it’s phase one of a larger rollout to maximize the value of distributed energy resources for our customers and the utility. Ultimately, it’s about testing innovative technologies that could have long-term benefits.”

The first project under the initiative is by intelligent energy storage provider Stem Inc., who is developing an aggregated fleet of customer-sited storage systems. The project will integrate both solar and energy storage to increase grid performance and reliability. Stem’s software-driven storage can enable businesses to reduce energy costs by reducing their peak demand. Where a business has on-site solar PV systems, Stem’s software and analytics tools will automatically manage those customers’ use of grid-supplied electricity against their solar production.

“Austin is a hub of sustainability and we are thrilled to be working with Austin Energy on this project,” said John Carrington, CEO of Stem. “We think all of Texas will be watching to see how aggregated energy storage can cost-effectively deliver multiple values to customers, utilities, and grid operators alike.”

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Nevadan legislators have passed a number of bills to incentivise energy storage in the state for approval from governor Brian Sandoval.

Earlier this week, the Assembly passed AB 145 in a 36-5 vote to embed incentives for residential energy storage in the state’s solar programme.  In addition, SB 204 was also passed, which requires the Public Utilities Commission (PUC) to investigate a path to establish energy storage procurement targets for certain electric utilities as part of grid modernisation plans. This was also passed in a majority vote of 39-2.

“The Commission shall require the utility to include in its plan a plan for modernisation of the grid. The plan for modernisation of the grid may evaluate, without limitation, the benefits and costs of new technologies, contracts, sources of energy, distributed resources, energy storage, means for reducing emissions and any other means for enhancing the reliability and 32 security of the grid,” SB 204 reads.

The bills signal the Silver State making a concerted effort to maintain its position as a leading clean energy state. Recently lawmakers passed bills to increase the state’s RPS to 80% by 2040 and revive its beleaguered rooftop solar industry.

Sponsor of SB 2014 Kevin Atkinson said the bills will go some way towards positive job creation and supporting local consumers.

“These are things we have to continue to work on and to be open about to make progress,” Atkinson said. “There is no doubt that these types of bills bring jobs. I think everyone on this committee will agree that creating jobs for our citizens is one of Nevada’s goals. But empowering our consumers is also essential. I hope we are able to work on this to give the (PUC) clear direction.”

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Arizona utility Tucson Electric Power (TEP) claims that the cost-effectiveness of a new large-scale solar-plus-storage facility under construction will allow it to provide “more solar energy to more customers for less money”.

TEP said that a 100MW solar PV array coupled with a 30MW/120MWh energy storage system will be completed and connected by the end of 2019. The utility said output from the solar farm would be purchased at a “historically low price”.  An affiliate of NextEra Energy, which only last month said it will build another 10MW lithium-ion battery energy storage system in Arizona for utility Salt River Project, will construct the system.  

According to TEP, the utility will be able to source renewable power for less than three cents per kilowatt-hour from the combined installation for a 20-year period. However, the utility said that the price, which was the only figure quoted in its announcement of the project, excluded the cost of the energy storage system. Nonetheless, TEP said that this was less than half the sum agreed under “similar contracts” in the past few years.

“This new local system combines cost-effective energy production with cutting edge energy storage, helping us provide sustainable, reliable and affordable service to all of our customers for decades to come,” TEP senior director for renewable energy and energy supply Carmine Tilghman said.    

While the project announcement appears to be exciting news for Arizona, following on the heels of news of three much smaller utility-scale energy storage systems by TEP, it has a slightly more, potentially, controversial side to it.

Currently there is a dispute over the cost of and compensation for rooftop solar power ongoing in the state. TEP itself has proposed a new rates structure for rooftop solar customers that would cut solar credits and instate time-of-use (ToU) rates earlier this month.

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Two Congressional representatives in the US have united across party political lines to form the Advanced Energy Storage Caucus, a group dedicated to educating Members of Congress on the benefits of the nascent technology.

Chris Collins, Representative for New York’s 27th Congressional District, who is a Republican, and Democrat Mark Takano, Representative for California’s 41st District, launched the Caucus last week. The group’s intention will be to “periodically” brief Members of Congress on the ways energy storage is changing the landscape of electricity generation, distribution and consumption, as well as how policy interventions could take away existing barriers to the technology’s use.

A press conference was held last week to launch the Caucus, with Collins and Takano flanked by members of the US Energy Storage Association, executives from energy storage system integrators/vendors AES Energy Storage, S&C Electric and Stem, as well as transmission system operator National Grid.

The Advanced Energy Storage Caucus’ published Mission Statement said the bipartisan group will advance understanding of how energy storage enables homeowners and businesses in the US to have better access to sustainable, reliable and affordable electric power.

“The members of this Caucus will work together and with stakeholders toward innovative and effective policy solutions that address challenges in our energy infrastructure and drive the adoption of storage technology,” the statement concludes.

Congressman Chris Collins said he was “proud” to act as co-chair of the Caucus alongside Rep. Takano.

“We need bipartisan solutions to help address our aging energy infrastructure. Energy storage technology will grow our economy and make sure American businesses can compete around the globe,” Collins said.

“Energy storage is transformative technology that can lead to a cleaner, safer, more reliable, and more affordable energy grid,” Takano said.

“The security and sustainability of our energy infrastructure affects every community across America. I look forward to working with Democrats and Republicans to create a policy environment where the promise of this technology can be fully realised.”  

In making supporting comments, S&C Electric’s director of grid solutions Troy Miller pointed out that his company employs 1,200 people in manufacturing jobs in the US and played up the competitive advantages on a national level of supporting the industry.

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