While Tesla captures more headlines, German residential storage company Sonnen currently leads in global product deployments.

Today, Sonnen has more than 15,000 battery installations around the world, the vast majority of which are located Germany. But the company also has a growing U.S.-based business, with monthly unit sales now in the three digits — just one year after the company’s U.S. market launch.

GTM sat down with CEO Christopher Ostermann and Blake Richetta, vice president of North American sales, to discuss Sonnen’s competitive advantages in the home battery arena and how the company plans to grow in the months ahead. Watch below via Facebook Live.

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Federal regulators continue to explore how electric storage can participate in wholesale markets, and have directed the Midcontinent ISO to file tariff changes. The commission denied IPL’s petition on two of three points, also declining to find the grid operator’s tariff unjust and unreasonable with respect to the current dispatch protocols for regulation service.

But FERC did say the tariff “unnecessarily restricts competition” by preventing storage from providing all the services that they are technically capable of providing. The order calls in the grid operator to explore the participation of all forms of storage, “regardless of the technology, in all MISO markets that they are technically capable of participating in, taking into account their unique physical and operational characteristics.”

IPL filed its complaint in October, complaining the MISO tariff was unjust in how it treated storage, in particular
the utility’s grid-scale lithium ion Harding Street Station Battery Energy Storage System. The 20 MW, 20 MWh project went into service in May, but the company has complained that while the batteries are valuable, there is no regulatory path for IPL to get paid.

You can read more of Utility Dive’s coverage about the project, and how IPL is seeking to revise storage tariffs, here. The utility knew the grid rules were not favorable for battery storage back in 2009 when it began developing plans for the project, but it was hopeful that those issues would be addressed.

“We thought we would be able to tweak the regulations, but that didn’t happen,” Lin Franks, senior strategist for RTO, FERC and compliance Initiatives at IPL, told Utility Dive at the time. 

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There are many reasons batteries are appearing across the electrical grid—their price is falling, they may save utilities more than they cost, and they can support solar and wind by capturing peaks in production and saving it for troughs.

But their progress has been slowed by a web of regulations at every level, two grid experts said in Chicago last week.

“We have examples in New York where there are projects ready to go and they can’t get a permit from the Fire Department,” said Richard Kauffman, New York state’s energy czar. “Or there are building-permit related issues. It really raises the cost, the soft cost, a lot.”

In other places, there’s no incentive to store energy when it’s cheap, and sell it when it’s expensive, because it costs the same amount all the time. “There’s not time-of-use pricing in many places, so there’s no financial incentive to shift load,” he said.

Battery manufacturers like Tesla Motors, Panasonic, AES and LG report steady growth. Tesla, AES and Altagas cut the ribbons this week on massive new projects in California. But these companies see far more potential than they have realized. The market, as Tesla’s Elon Musk said, is “staggeringly gigantic.”

It shouldn’t come as a surprise that disruptive technologies like storage get stuck in a legacy system, said Susan Tierney, a former assistant secretary of energy.

“We think of what we’re talking about as energy policy,” Tierney said. “It’s tax policy, it’s land-use policy, it’s fire code—all of these things shape the way that things can be changed. You actually have to solve the inertia in the system on all those engineering, legal, political, financial (levels). All of those things have to fit to make the kind of changes we have.”

The Energy Policy Institute at Chicago invited Tierney and Kauffman to discuss opportunities and obstacles facing cities as they strive for their own clean energy goals, regardless of federal support.

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The impact Elon Musk and Tesla (NASDAQ:TSLA) will have on the energy industry may be larger in the power storage segment than anywhere else. Sure, his company is a leader in electric vehicles and residential solar, but in the worlds of automakers and solar energy more broadly, Tesla is a very small player. 

Energy storage is another matter: Tesla has been more aggressive in that space, and could take a leadership position very quickly. And its product could very well upend the electricity market as we know it.

Energy storage saves natural gas from itself

The future of energy can be seen in the emergency energy storage system built in Southern California after the Aliso Canyon natural gas storage field’s massive leak late in 2015. Because of that blowout, which released close to 100,000 metric tons of methane into the atmosphere, operations at the facility were curtailed, and there was a chance the region wouldn’t have enough natural gas to meet its energy needs at peak times in the summer, leading to brownouts or blackouts. 

Most of the time, the issues at the facility weren’t a big deal relative to California’s power supply, because there was still enough energy overall to meet demand. But there was the potential for a disparity during evening hours, when people get home and turn on their lights, that demand could exceed supply. And that was a concern for the grid operators. 

Their solution was to install a large array of batteries that could store energy when it was abundant and easily deploy it to the grid when needed. Sempra Energy‘s (NYSE:SRE) San Diego Gas & Electric contracted with Tesla, Greensmith Energy, and AES Energy Storage to build 70 MW of energy storage with 280 MWh of capacity to offset the Aliso Canyon outage. Just six months after the request for proposal went out, the projects were complete. 

Energy storage added an incredible amount of value to Southern California’s grid, and it did so in very little time. And proving out these capabilities will allow more energy storage growth in the future. 

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If only I were a battery, I could be hanging out in Hawaii right now.

The islands have seen a fair number of batteries deployed in recent years, to help solar households self-consume and to smooth large amounts of solar generation on the grid. What they haven’t seen is a thriving commercial storage market like the one California has seen emerge. That hasn’t changed yet, but Californian commercial storage specialist Stem has deployed a pilot network of 29 business-sited battery systems to show how this model might work with Hawaiian utilities.

“What we’re really trying to do with this first set of customers is help to pave the way for the coming industry, which will include multiple players,” said Tad Glauthier, Stem vice president of Hawaii operations, in an interview at the DistribuTech conference in San Diego. “It’s significant in that this is [Hawaii’s] first aggregation of energy storage systems across diverse commercial sites for the utility, that they can see and use in the management of the grid.”

Stem uses its software to operate batteries on behalf of commercial customers, giving them savings on demand charges, while also aggregating across the network to provide grid services like demand response. In Hawaii, that made for a double challenge: educating customers about why they would want a battery, and convincing Hawaiian Electric Company that the batteries can reliably deliver 1 megawatt of capacity to the grid when called upon.

Some of the participants in the pilot are local branches of chains Stem has worked with, like Whole Foods and Albertsons. For some of the locally based customers, including an auto body shop, a sheet metal company and a florist, Stem had to start from scratch pitching why storage would be useful.

Hawaii has the nation’s highest electricity rates, so saving money on electricity is top of mind for consumers there. Most of the companies that participated already had rooftop solar or were in the process of acquiring it. Often, though, “They don’t think about the peak; they think about using less,” said Tad Glauthier, Stem’s vice president of Hawaii operations. 

The business case for commercial demand management isn’t as strong in Hawaii as it is in a place like California, because the demand charge there is smaller — $11.69 per kilowatt for small commercial customers in Honolulu. The revenue stream for business-sited batteries providing grid services didn’t exist either, because HECO didn’t have a model for it.

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While Brexit looms, bringing uncertainty into the country’s economy and international relationships, the role energy storage will play in a decentralised, low(er) carbon and more flexible energy system at least seems a little more assured than it did before.

Even Prime Minister Theresa May has namechecked energy storage and claimed a mooted research institute overseen by the government’s chief scientific advisor, Mark Walport, could make the UK a leader in battery and energy storage R&D as part of its industrial strategy reforms. It will have some catching up to do to meet advances in regions like California’s Silicon Valley and New York, but the announcement provided some rare optimism in Britain’s gloomy Brexit winter.  

Also at government level, the Department of Business, Energy and Industrial Strategy (BEIS) successor to the Department of Energy and Climate Change (DECC), is apparently currently “wading through” the many responses it received to a so-called Call For Evidence. This quasi-consultative solicitation of stakeholder responses to issues pertaining to reform of the energy sector, which was welcomed by the industry, closed in mid-January.

BEIS official David Capper, who is its Deputy Director and Head of Future Electricity Networks, told trade association the Electricity Storage Network’s annual symposium event last week that key themes emerging were the need to foster markets for flexibility services and allow developers to ‘stack’ revenues. Priority number one, he said was to remove the policy and regulatory barriers storage faces, including providing much-needed regulatory clarity. BEIS recognises that storage is important for “reducing the UK’s emissions going forward,” Capper said.  

Tendered agenda

Over the past few months readers of Energy-Storage.News have seen that a 200MW tender for enhanced frequency response (EFR), grid-balancing that responds within one second of registering a frequency deviation, was completely filled by battery projects. Those contracts are just for four years, but quickly following that tender was the T-4 capacity market auction, guaranteeing capacity to ‘keep the lights on’ between 2020 and 2035. Of 3.2GW capacity secured, 500MW of storage won out in that process, with both tenders held under the auspices of the transmission operator, National Grid.

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Zen Ecosystems is leveraging its smart thermostat to extend the range of residential batteries for home energy savings.

The nearly four-year-old company sells its signature thermostat individually for homes, as well as in enterprise-wide commercial packages. It saves money by shifting a building’s heating and cooling load to optimize for time-based electricity tariffs or demand response events.

Another trendy technology advertises load-shifting and demand response: energy storage. Customers interested in those functions could pick one or the other, but Zen decided to try pitching both. The company’s smart thermostat will be bundled with batteries from Swell Energy, an L.A.-based storage marketplace turned vendor, in what appears to be the first partnership of its kind. 

“We’re very aware that storage is hot in the market right now, and our ambition is to be a part of that,” said Zen Ecosystems CEO James McPhail, in an interview on the floor of the DistribuTech conference in San Diego. “Having such a fast ROI, we’re able to partner with companies that don’t have that same luxury to help them expedite their ROI and become an even more attractive solution to their customers.”

The pitch goes something like this: Storage and smart temperature controls enable a customer to exert greater control over energy consumption. Storage is more expensive and has a longer payback time; a customer with a limited budget could simply choose a thermostat and start saving in a matter of months. If a battery already pencils out, however, the inclusion of a Zen thermostat will open up deeper savings for a negligible additional cost.

“With the same amount of storage and the same number of customers, a smart thermostat lets us aggregate a larger grid resource,” the folks at Swell tell GTM. “So the synergy is both customer-facing and grid-facing.”

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A proving grounds for energy storage is in Southern California, where a large project is underway to compensate for the Aliso Canyon natural gas storage facility, which has not been allowed to accept new gas since methane leaks caused serious problems in 2015.

This week, Southern California Edison (SoCal) and Tesla Motors took the wraps off what the Los Angeles Times calls one of the largest energy storage facilities in the world. The 1.5 acre site, at the Mira Loma substation, harnesses almost 400 Tesla PowerPack lithium-ion batteries. The batteries, the story says, can power 2,500 homes for a day or 15,000 homes for four hours.

The overall initiative is much broader:

In addition to the Tesla-Edison project, storage facilities of similar size are being rolled out by San Diego Gas & Electric with AES Energy Storage and by Greensmith Energy Partners with AltaGas. In all, the projects are adding 77.5 megawatts of energy storage to the state’s electricity grid.

Storage technology is a key to enabling the state to meet its mandate of producing half of its electricity from clean sources by 2030 and to reduce greenhouse gas emissions to 80 percent below 1990 levels by 2050.

The overall project is controversial.

In a commentary in The Whittier Daily News state senator Henry Stern — a Democrat representing Calabasas — says that the Aliso Canyon is set to reopen. The decision, the story says, is being driven by the threat of blackouts. Stern objects. The crisis was met by innovation in storage and renewables, he writes. That is making the quick reopening – before, he says, the reason for the blowouts have been determined – unnecessary.

The general outlines of what Stern is advocating are described at The Signal, a news site in the Santa Clarita Valley. The details have not been determined, but Stern wants to established 120 MW of clean energy storage projects involving Santa Clarita-run and investor-owned projects during the next year. Talks are underway with the California Energy Storage Alliance, SoCal and San Diego Gas and Electric, the story says.

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