Behind-the-meter energy storage
Traditional utility thinking would have it all congregated in a single location: a warehouse full of batteries ready to send power to and from the grid in a centralized fashion. A decentralized approach, however, adds more value because energy storage systems can be placed at or near the load, solving both local and systemic problems. Even more valuable would be to place the devices just outside the grid, within the end user location, on the customer side of the meter — i.e., “behind the meter.” However, doing so requires significantly more communications, remote control and computing power. It also increases the cost of individual systems because the associated equipment, such as inverters, control equipment, transformers, etc, can’t be shared across a lot of batteries.
Throughout the world, behind-the-meter energy storage systems are starting to take off. This is primarily due to regulatory incentives that see such systems as an ideal way to allow for increased penetration of renewables, particularly solar PV, on the grid.
Regulators throughout the world have begun to favor behind-the-meter energy storage over more centralized systems, thanks to a desire to empower the ratepayers and citizens whom the regulators represent. The combination of regulatory subsidies and PV-integration are creating a modern renaissance in residential and commercial building energy storage systems.
Here are some examples of regions where the movement is in full bloom:
California is by far the most active state in terms of behind-the-meter storage system installations. That’s primarily due to the Self Generation Incentivization Program or SGIP. The decade-old program pools ratepayer funds in order to help fund distributed generation projects throughout California.
|There is a situation, though, in which customer-sited energy storage enables a big cost reduction: when the energy storage system shares equipment with photovoltaics. That makes both the battery system and the PV system cheaper to operate while increasing the value of both.|
In 2011, the SGIP included energy storage projects for the first time. Since then, several hundred behind-the-meter projects have been installed. Most of them have been at commercial building sites which can take full advantage of the 30 kW upper limit of system sizes. This has been led by demand-charge-reduction systems that utilize a relatively small amount of energy storage capacity and get a relatively quick payback by reducing a facility’s peak demand.
One such example combines a lithium ion battery pack with a traditional PV system. The integrated system is automated and the controls are set to reduce peak demand usage, especially during hours of high power loads, such as summer afternoons. This allows the facility to dramatically reduce its demand charges. The system contains what is very similar to a Model S battery pack.
In response to the dramatic cutback of power generation in the aftermath of the East Asian Tsunami and the Fukushima nuclear accident, Japan has been searching for ways to spur the quick build-out of renewable generation. In addition to subsidies for homeowners to add PV panels, the government is also heavily subsidizing residential battery systems. Individual homeowners can get as much as 50 percent of the system paid for with government grants. This has led to a mini-boom of residential energy storage systems, most of them powered by lithium ion batteries. Although there are no official statistics on energy storage system sales, Navigant Research estimates that more than $140 million worth of such systems were sold in 2013, representing somewhere between 30 and 50 MWh of battery systems. Navigant predicts that number to grow even faster in 2014.
The government of South Korea has publicly proclaimed that it plans to launch a similar one sometime in 2014. That should lead to sales of more residential energy storage system batteries in these two countries than have been sold in the entire world for the last 10 years.
Since the first renewable energy law was passed in 2000 in Germany, more than 35 GW of PV have been installed in that notoriously overcast country. That has led to some significant grid management problems for the country, especially because — even as wind and PV have been booming — the government wants most of the country’s coal-fired power plants to be shuttered over the next decade. Clearly, a renewables system linked with large amounts of energy storage is a feasible solution for Germany’s energy problems.
|The combination of regulatory subsidies and PV-integration are creating a modern renaissance in residential and commercial building energy storage systems.|
In 2013, the government instituted a new set of energy storage subsidies meant to promote the installation of residential behind-the-meter battery systems linked to PV systems. Unfortunately, those subsidies were not strong enough to encourage a flood of new storage systems. The government has publicly stated that it will adjust the subsidies to market demand and expects to raise them incrementally to create a surge of demand for new energy storage systems.