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Battery Storage in the Northeast - Reoccurring themes 2019 and beyond

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Dale Desmarais's picture
Director of Sales & Marketing Your Power To Save

In his current role, Mr. Desmarais focuses on customer outreach and education, utilizing both traditional and digital marketing strategies that tout the cost and conservation benefits of both...

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  • Jan 24, 2019 12:14 am GMT
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This item is part of the Special Issue - 2019-01 - Predictions & Trends, click here for more

Battery storage has been around for a while now but if you are in any part of the energy industry you have seen and heard this topic  come front and center with all eyes and ears wide open to it, specifically in the last 6 months or so.

Many conferences and events that were primarily focused on one or two specific areas of the energy market (solar, wind, CHP, etc) have started including battery storage topics and sessions in their content.

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This leads to the clear thought that battery storage, also commonly referred to as energy storage, is on everyone's mind as the next big thing. Many individuals that are coming from energy-related fields outside of solar and storage are finding themselves behind the 8-ball. As players in the sector are trying to get up to speed by attending events that are specifically focused on energy storage, one would expect to connect with many experts. However, it can become clear very quickly that although there are some individuals that stand out as extremely in tune with this topic, most of the attendees are trying to wrap their head around what is happening and how they should best position themselves. The characteristics of experts relate to their in-depth knowledge about market and tariff structure, efficiency program details by region and a solid understanding of the proven technology leading the charge in this sector.

As an observation, most people don't necessarily know a lot about battery storage and the factors that go into to making it successful, but they have a very good sense that it will dominate the future of energy for years to come. The one piece that everyone seems to agree about, is the need and desire to find projects that are "bank-able". This term "bank-able", keeps coming up over and over as repeated theme as you dig deeper into what key factors are necessary to make projects succeed.

As the discussion around energy storage evolves, there are two main recurring themes that I have observed. One is a focus that was less on the specific manufacturer or storage technology and more on the software that helps the technology fully and actively interact with the grid. Specifically, the increased value of taking into consideration every individual opportunity for cost savings and value stacking. (Ex: Coincident Peak Demand, Non-Coincident Peak Demand, Peak Shaving, Demand Response Programs, etc.) In a conversation with Malcolm Smith at Sustaine (a group that provides energy asset optimization and planning software to campus environments), Malcolm explained that the need for more predictive and active software is evident. "Some groups are chasing the peaks and they are saving a fair amount, but there is a lot of juice left to squeeze." He explained that this A.I. enabled software is providing actionable plans that are helping clients realize more savings than ever before. It seems that others in the industry agree and that the need for the integration software is critical, and everyone is looking for more than just production output or B.M.S. data. What is needed is true predictive energy asset optimization and load management, software that integrates real time data like weather patterns, utility tariff and rate structures, asset readiness, etc.

The second piece that really stands out is that everything that is happening in this sector, and all the actions taken by those that are deeply involved and knowledgeable about this industry, seem to have the end goal of increasing consumer confidence. To elaborate, the reason that there is still so much unclarity surrounding battery storage is because everyone is waiting for systems to prove themselves. New technology and software is being introduced on a regular basis that is potentially much better for the industry but developers tend to favor the tried and true tech and systems that have the longest tenure and largest installed base. Senior utility officials, top decision makers at C&I facilities (including small and large end-user customers) and even some developers and installers are still hesitant because they need to see more data that shows specific successes in real projects, before they aggressively move forward with some of the newer options. 

That being said, there are clearly leading indicators that are being developed on the policy & program side that would show that there is enough support for this newer emerging tech, including a financial push from the regulators, to support advancing these technologies and strategies. (Ex. $250 million of funding for battery storage industry in NY.)

Many experts from the northeast feel that because battery storage is relatively new to the region, there remains a lot of unclear information. Lucy Fan at Peak Power (a group that is working on driving expansion of storage solutions) made a comment at a recent energy storage panel discussion that "cycling costs were really high and that because the market has allowed low cycling for so long, this has stalled the progression of battery technology".  She went on to clarify this statement and said "current battery costs are still high and cycle schedules are low, creating high marginal cycle costs, which limit the value streams it makes sense to pursue; there is still much room for improvement." Several of the panelists in this conversation suggested that having the regulatory market firmly in place would go a long way to stabilize customer and financier confidence. There is also a challenge in the industry where it is difficult (but extremely important) to isolate revenue streams from different energy assets at a facility. Depending on the size of the facility or campus of buildings, there are usually multiple energy generating assets and it is hard to allocate the financial benefits appropriately.

From a regional perspective, many of the development groups that have seen success in California have already, or are starting to migrate here to the northeast, an area that is ripe for the picking. Many groups are specifically focusing on Massachusetts and New York because of the specific economic climate in both States. ISO New England is being recognized as an extremely cooperative group, as everyone is searching for non-wired alternatives to manage the grid loads. There also seems to be strong opportunities in PGM territory based on their rate structures and incentive offerings.

With all of this information and hype, the end result is that we seem to have as many questions as we have answers. From utility interconnection restrictions, to scrutiny of new tech that could propel the industry forward, to what regulatory pieces need to be in place to bring clarity, to all of that is needed to make a storage project "bankable" there is still a lot in energy storage that needs clarity. That being said, there will be a lot more players actively engaged as the story unfolds and it seems like we are only in the first chapter.

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Thank Dale for the Post!
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John Benson's picture
John Benson on Feb 8, 2019

Hi Dale:

Good post. Perhaps some additional information below.

I've posted several educational papers to Energy Central on storage, also storage plus PV and wind. I've pasted some links below.

https://www.energycentral.com/c/iu/energy-storage-survey

Posted over a year ago. It covers most forms of storage, but focuses on LiIon battery energy storage systems (BESS).

https://www.energycentral.com/c/cp/large-battery-energy-storage-systems

Focuses on large BESS, major Vendors and Projects.

https://www.energycentral.com/c/cp/advances-battery-energy-storage

Focuses on flow battery BESS - the alternative to LiIon for high-energy projects, which is finally showing some signs of life.

Finally, I will post a paper on PV plus storage projects in less than two weeks. This is starting to explode, including on the East Coast.

-John

 

Dale Desmarais's picture
Dale Desmarais on Feb 9, 2019

John,

I would love to connect to get more clarity.

Dale

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