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Efforts to use EV batteries and home storage systems to manage load are proliferating globally

image credit: © Tesla
Peter Key's picture
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I've been a business journalist since 1985 when I received an MBA from Penn State. I covered energy, technology, and venture capital for The Philadelphia Business Journal from 1998 through 2013....

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Decarbonizing the grid will require integrating large amounts of renewable generation. Among the problems that presents is that the intermittent nature of renewables means grid operators can’t count on being able to call on them to handle peak loads.

One way to deal with that is to continue to rely on peaker plants. But even though they’re only utilized during periods of very high demand, such as late summer afternoons during heat waves, there’s a growing movement against them. That’s because they’re often located in non-white, poor neighborhoods and are major polluters for their size, as they burn either natural gas or oil, usually very inefficiently.

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Another possibility is large-scale, dispatchable energy storage, which the Energy Information Administration’s Annual Energy Outlook 2021 shows is poised to take off, even if the technological breakthrough promised by Form Energy’s iron-air battery fails to materialize.

A third possibility, however, is aggregating large numbers of small, distributed energy resources (DERs), such as electric vehicle batteries and residential energy storage systems, which typically are charged by rooftop solar generation units, and using their collective power to provide peak load management and other services to grid operators.

While such distributed energy resource management is simple in concept, it is technologically challenging to accomplish. Nonetheless, that hasn’t stopped a growing number of organizations, including grid operators, electric utilities, tech companies of all sizes, and makers of EVs and EV chargers from trying to accomplish it.

To say their efforts are in the early phase would be an understatement. The furthest along typically are only pilot programs, others have been announced but not yet rolled out, and others exist only in regulatory filings by the companies that plan to offer them.

Despite that, they are proliferating. At least six have been the subject of filings and announcements in Canada, the U.S., U.K., and Australia in the past two months.

Of the filings, the one that could have the most impact was made by Tesla Energy Ventures, a newly created subsidiary of the EV, rooftop solar generation and energy storage system manufacturer headed by controversial billionaire Elon Musk.

In mid-August, according to a Texas Monthly report, Tesla Energy Ventures applied to the Public Utility Commission of Texas to be allowed to sell electricity on the state’s retail market. In its filing, the newly formed Tesla subsidiary said it plans to try to make customers of people who already own Tesla products. Those include Tesla’s Powerwall home energy storage systems, which, along with the batteries in Tesla EVs, could be aggregated by Tesla Energy Ventures into virtual power plants that could be used to meet peak demand and provide grid services.

Another filing, by Arizona Public Service Company (APS), resulted in the Arizona Corporation Commission last month approving the utility’s amended demand side management program, which provides incentives to residential APS customers who add battery storage to their rooftop solar systems and agree to allow APS to tap their batteries to provide grid services.

A Canadian utility, the municipally owned Alectra Utilities, recently announced that it has launched a pilot program that allows 21 Ontario households with such DERs as solar panels, battery storage systems and EVs to use its GridExchange transactive energy platform to participate in various clean energy transactions for cash and rewards redeemable at local merchants. GridExchange was funded by Natural Resources Canada, which is part of the Canadian government. Also involved in it were Savage Data Systems, an information technology company serving Canadian utilities; EV charging company FLO; and Sunverge, which operates a DVR management and aggregation platform and makes energy storage systems.

Sunverge also announced last week that it, Nissan Australia, Australian natural gas and utility retailer Simply Energy, and smart charger maker Wallbox have formed a partnership to expand the capabilities of Sunverge’s platform to include the management of EV charging and EV batteries. That expansion, Sunverge said, will allow utilities to use vehicle-to-home (V2H) technology to further enhance their control over DERs and the ability to provide real-time, dynamic, flexible load management.

Nissan, meanwhile, was included in an announcement by U.K. power generator and electricity and gas distributor EDF about the launch of a commercial charging service that uses vehicle-to-grid (V2G) technology developed by DREEV, a joint venture between EDF and Nuuve, a California V2G platform operator. The technology allows EVs to be charged when power is cheapest and discharged to sell power back to the grid, producing a savings for fleet owners of Nissan’s LEAF and e-NV200 models that EDF said would amount to around £350 per charger annually.

Finally, back in the U.S., Nuuve and school bus manufacturer Blue Bird earlier this month announced a plan to allow school districts to lease electric buses with V2G capability, charging equipment and energy management services. The leasing would be handled by Levo Mobiity, a joint venture between Nuuve and Stone Peak Partners that has a capital commitment of $750 million, which is enough to electrify up to 3,500 school buses. The financing represents an expansion of the collaboration between Nuuve and Blue Bird to introduce V2G school buses that can be aggregated by Nuuve’s platform to form virtual power plants offering grid services that provide revenue to the buses’ owners.

 

 

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Todd Pistorese's picture
Todd Pistorese on Sep 1, 2021

Probably the largest US effort to involve residential customers in peak shaving with their behind-the-meter energy storage is underway on the island of Oahu in Hawaii.  They are asking for up to 5,000 residential customers to supply 50MW of dispatchable energy storage.  They offer $850/kW as an incentive to the first 15MW and a slight reduction in the one-time payment thereafter.  Search for "Hawaiian Electric’s new ‘Battery Bonus’ Program to offer O‘ahu customers cash incentive to add energy storage to rooftop solar system" to read about this program.

The problem with daily dispatch of residential energy storage remains, two fold. 

First, it cuts into the customers UPS capabilities in the off-chance of an outage prior to the energy storage recharge the following day during solar hours.  More than 80% of residential storage is for UPS purposes only.  Very few use the storage for Time-of-Use arbitrage. 

Second, is the impact on Lithium Battery Warranty.  Tesla states a 38MWh throughput limit on the warranty.  That seems like a lot on the surface, but daily cycling of the Powerwall would end the otherwise 10-year warranty in about 4.5 years.  Hawaiian Electric is not offering Net Metering to new DERs any longer.  Their payment for energy sent to the grid is a fraction of the retail electric rate. The cash incentives to participate, plus any energy export payment, like those of Hawaiian Electric, are insufficient to replace an exhausted battery out of warranty. 

DER participation is a significant value if it can be seen as a positive ROI for the customer.  Utilities, are not quite aligned with this thought yet, and I believe their preference will continue to be utility-scale solar + storage solutions they can put into ratebase.  Until utility rate structures change, their desire to engage with customers will be minimal.

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