This document provides an overview of energy storage deployment for utilities and outlines a cross-functional framework. It discusses the rise of energy storage technologies and drivers such as declining costs. It then describes a utility's energy storage deployment life-cycle which includes phases such as needs assessment, use case identification, planning and procurement, deployment, and optimization. Key considerations and impacts for four functional groups - finance and regulatory, system planning and operations, advanced technology and IT, and customer operations - are outlined.
Presentation from the EPRI-Sandia Symposium on Secure and Resilient Microgrids: From Resiliency to Solvency: Building a Business Case for Public Purpose Microgirds, presented by Kenneth Horne, Navigant, Baltimore, MD, August 29-31, 2016.
Presentation from the EPRI-Sandia Symposium on Secure and Resilient Microgrids: Integrated Design and Financial Model, presented by Stephen Knapp, Power Analytics Corp, Baltimore, MD, August 29-31, 2016.
ScottMadden has developed the following document, which provides an overview of DERs, a description of why they are causing so much upheaval in the industry, a summary of the NARUC reports, and an outline of the key questions utilities must address in relation to DERs.
Presentation from the EPRI-Sandia Symposium on Secure and Resilient Microgrids: Microgrid Market Operations with Distribution System Operators, presented by Mohammad Shahidehpour, Baltimore, MD, August 29-31, 2016.
Presentation from the EPRI-Sandia Symposium on Secure and Resilient Microgrids: U.S. Building Council, presented by Ryan Franks, Baltimore, MD, August 29-31, 2016.
Presentation from the EPRI-Sandia Symposium on Secure and Resilient Microgrids: Adapting the Integrated Grid Economic Framework to Microgrids, presented by Jeffrey Roark, EPRI, Baltimore, MD, August 29-31, 2016.
ScottMadden's Energy Industry Update for the 2019 Utility Supply Chain Confer...ScottMadden, Inc.
As economic growth continues, and policies are increasingly driven by state and regional issues, utilities are placing bets, with large investments, on various growth strategies. They continue to face opposition and challenges from various stakeholders with disparate interests. Energy and utility companies will try to thread the needle of developing and upgrading much needed infrastructure, while satisfying those interests.
During the 2019 Utility Supply Chain Conference, Cristin Lyons reviewed the latest Energy Industry Update and shared key highlights for topics including:
- Electrification: A summary of increased electrification activities (ie: transportation/space heating) being promoted by electric industry stakeholders, and electrification’s pros and cons
- Wholesale energy infrastructure development: A discussion of proposed gas and power transmission projects, potential regulatory changes, and surrounding issues/implications
- Grid modernization: Noteworthy efforts around the nation, including both the programs and the common themes.
Learn more at www.scottmadden.com.
Presentation from the EPRI-Sandia Symposium on Secure and Resilient Microgrids: From Resiliency to Solvency: Building a Business Case for Public Purpose Microgirds, presented by Kenneth Horne, Navigant, Baltimore, MD, August 29-31, 2016.
Presentation from the EPRI-Sandia Symposium on Secure and Resilient Microgrids: Integrated Design and Financial Model, presented by Stephen Knapp, Power Analytics Corp, Baltimore, MD, August 29-31, 2016.
ScottMadden has developed the following document, which provides an overview of DERs, a description of why they are causing so much upheaval in the industry, a summary of the NARUC reports, and an outline of the key questions utilities must address in relation to DERs.
Presentation from the EPRI-Sandia Symposium on Secure and Resilient Microgrids: Microgrid Market Operations with Distribution System Operators, presented by Mohammad Shahidehpour, Baltimore, MD, August 29-31, 2016.
Presentation from the EPRI-Sandia Symposium on Secure and Resilient Microgrids: U.S. Building Council, presented by Ryan Franks, Baltimore, MD, August 29-31, 2016.
Presentation from the EPRI-Sandia Symposium on Secure and Resilient Microgrids: Adapting the Integrated Grid Economic Framework to Microgrids, presented by Jeffrey Roark, EPRI, Baltimore, MD, August 29-31, 2016.
ScottMadden's Energy Industry Update for the 2019 Utility Supply Chain Confer...ScottMadden, Inc.
As economic growth continues, and policies are increasingly driven by state and regional issues, utilities are placing bets, with large investments, on various growth strategies. They continue to face opposition and challenges from various stakeholders with disparate interests. Energy and utility companies will try to thread the needle of developing and upgrading much needed infrastructure, while satisfying those interests.
During the 2019 Utility Supply Chain Conference, Cristin Lyons reviewed the latest Energy Industry Update and shared key highlights for topics including:
- Electrification: A summary of increased electrification activities (ie: transportation/space heating) being promoted by electric industry stakeholders, and electrification’s pros and cons
- Wholesale energy infrastructure development: A discussion of proposed gas and power transmission projects, potential regulatory changes, and surrounding issues/implications
- Grid modernization: Noteworthy efforts around the nation, including both the programs and the common themes.
Learn more at www.scottmadden.com.
Evaluation of Utility Advanced Distribution Management System (ADMS) and Prot...Power System Operation
Practical and cost-effective communications solutions are needed to enable control of the growing number of integrated distributed energy resources (DERs) and grid-edge local aggregator devices such as home energy management systems. Each year, the total installed photovoltaic (PV) system capacity increases by an estimated 5 GW, over half of which is interconnected to the distribution system.1 PV’s increasing penetration—already accounting for the bulk of DER capacity—underscores the need to enable and manage its continued integration on the distribution system.2 Much previous work has shown that advanced distribution management systems (ADMS), which are effectively integration platforms for various grid control and visibility applications, can help enable the integration of higher levels of PV while also improving the overall performance and efficiency of the distribution circuit. Greater connectivity and controllability of utility- and customer-owned equipment increases the level of DER integration and overall circuit performance.3 The required performance of the enabling communications system, however, has been less thoroughly studied and is often greatly oversimplified in ADMS performance analysis. The availability of new technologies such as distributed sensors, two-way secure communications, advanced software for data management, and intelligent and autonomous controllers is driving the identification of communications standards and general requirements,4 but the link between the communications system and the expected performance of a utility-implemented control system such as an ADMS or other communications-reliant protective function requires further investigation.
Webinar recording available at
Power system flexibility relates to the ability of the power system to manage changes.
Solutions providing advances in flexibility are of utmost importance for the future power system. Development and deployment of innovative technologies, communication and monitoring possibilities, as well as increased interaction and information exchange, are enablers to provide holistic flexibility solutions. Furthermore, development of new methods for market design and analysis, as well as methods and procedures related to system planning and operation, will be required to utilise available flexibility to provide most value to society.
However, flexibility is not a unified term and is lacking a commonly accepted definition.
The flexibility term is used as an umbrella covering various needs and aspects in the power system. This situation makes it highly complex to discuss flexibility in the power system and craves for differentiation to enhance clarity. In this work, the solution has been to differentiate
the flexibility term on needs, and to categorise flexibility needs in four categories.
Here, flexibility needs are considered from over-all system perspectives (stability, frequency and energy supply) and from more local perspectives (transfer capacities, voltage and power quality). With flexibility support considered for both operation and planning of the power system, it is required in a timescale from fractions of a second (e.g. stability and frequency support) to minutes and hours (e.g. thermal loadings and generation dispatch) to months and years (e.g. planning for seasonal adequacy and planning of new investments).
Virtual Power Plants: Decentralized and Efficient Power DistributionShafkat Chowdhury
The paper discusses the emerging technology that is Virtual Power Plants (VPPs) as a means for smart Power Management solutions. It discusses the features and functionalities of VPPs and the current projects being implemented.
Presentation from the EPRI-Sandia Symposium on Secure and Resilient Microgrids: Helping Customers Make the Most of their Energy, presented by Phillip Barton, Schneider Electric, Baltimore, MD, August 29-31, 2016.
Presentation from the EPRI-Sandia Symposium on Secure and Resilient Microgrids: Microgrids Lessons Learned-So Far, presented by Merrill Smith and Microgrid Exchange Group, DOE, Baltimore, MD, August 29-31, 2016.
The Role of Energy Storage in the Future Electricity SystemLorenzo Kristov
Energy storage at various scales can be the key to integrating large amounts of renewable generating resources into the electric power system. Growth of storage is advanced by a combination of policies and economics. Presentation for the Portuguese National Committee of CIGRE, 2017.
Presented by Pete Scarpelli, Schneider Electric, Demand Response Resource Center, France at the IEA DSM Programme workshop in Vienna, Austria on 1 April 2009.
Using human-centred design to improve energy efficiency programsLeonardo ENERGY
Human-centred design is being used to make the NSW energy savings scheme more effective. We started with research that identified six key insights for improved scheme operation. It found that the scheme is complex and its fragmented tools and systems create unnecessary barriers to entry. We then used workshops to develop six corresponding opportunities for improved service delivery. To scale up we need streamlined manual processes, more collaboration and improved digital systems. This is especially relevant given recent announcements that the scheme is being extended to 2050.
This talk will present the research, and will place it in the context of changes announced as part of the NSW Energy Strategy. It will explore small, medium and long term changes to scheme delivery identified through the HCD process and our proposed next steps.
The NSW Energy Savings Scheme started in 2009. It has so far delivered projects that will save 27,000 gigawatt hours of energy and $5.6 billion in bill savings over their lifetimes.
Transactive Energy article in Metering International magazine Fall 2013. Provides practical explanation of transactive energy in an evolutionary context.
Peer-to-peer energy trading using blockchainsLeonardo ENERGY
Rapid penetration of distributed generation technologies, combined with grid constraints, and disillusionment with non-consumer centric business models, is leading many to explore radically different configurations of the energy system. One such model, ‘transactive energy’, focuses on peer-to-peer energy trading with the role of the energy company replaced with a trustless transaction layer based on distributed ledger (blockchain) technologies. The proponents of transactive energy argue that it provides social, environmental, economic, and energy systems benefits. This lecture will provide a broad introduction to the field, before discussing the opportunities and limitations of this approach within the energy transition.
Presentation from the New Mexico Regional Energy Storage and Grid Integration Workshop: Virtual Power Plants and Large Scale Renewable Integration, presented by Jay Johnson, Sandia National Laboratories, August 24, 2016.
Presentation from the EPRI-Sandia Symposium on Secure and Resilient Microgrids: Securing Microgrids, Substations, and Distributed Autonomous Systems, presented by David Lawrence, Duke Energy Emerging Technology Office, Baltimore, MD, August 29-31, 2016.
If you buy or sell domestic and commercial buildings in United Kingdom then, you must have Energy Performance Certificate for your property. Easy EPC are the best EPC (Energy Performance Certificate) providers for domestic and commercial property in United Kingdom.
Evaluation of Utility Advanced Distribution Management System (ADMS) and Prot...Power System Operation
Practical and cost-effective communications solutions are needed to enable control of the growing number of integrated distributed energy resources (DERs) and grid-edge local aggregator devices such as home energy management systems. Each year, the total installed photovoltaic (PV) system capacity increases by an estimated 5 GW, over half of which is interconnected to the distribution system.1 PV’s increasing penetration—already accounting for the bulk of DER capacity—underscores the need to enable and manage its continued integration on the distribution system.2 Much previous work has shown that advanced distribution management systems (ADMS), which are effectively integration platforms for various grid control and visibility applications, can help enable the integration of higher levels of PV while also improving the overall performance and efficiency of the distribution circuit. Greater connectivity and controllability of utility- and customer-owned equipment increases the level of DER integration and overall circuit performance.3 The required performance of the enabling communications system, however, has been less thoroughly studied and is often greatly oversimplified in ADMS performance analysis. The availability of new technologies such as distributed sensors, two-way secure communications, advanced software for data management, and intelligent and autonomous controllers is driving the identification of communications standards and general requirements,4 but the link between the communications system and the expected performance of a utility-implemented control system such as an ADMS or other communications-reliant protective function requires further investigation.
Webinar recording available at
Power system flexibility relates to the ability of the power system to manage changes.
Solutions providing advances in flexibility are of utmost importance for the future power system. Development and deployment of innovative technologies, communication and monitoring possibilities, as well as increased interaction and information exchange, are enablers to provide holistic flexibility solutions. Furthermore, development of new methods for market design and analysis, as well as methods and procedures related to system planning and operation, will be required to utilise available flexibility to provide most value to society.
However, flexibility is not a unified term and is lacking a commonly accepted definition.
The flexibility term is used as an umbrella covering various needs and aspects in the power system. This situation makes it highly complex to discuss flexibility in the power system and craves for differentiation to enhance clarity. In this work, the solution has been to differentiate
the flexibility term on needs, and to categorise flexibility needs in four categories.
Here, flexibility needs are considered from over-all system perspectives (stability, frequency and energy supply) and from more local perspectives (transfer capacities, voltage and power quality). With flexibility support considered for both operation and planning of the power system, it is required in a timescale from fractions of a second (e.g. stability and frequency support) to minutes and hours (e.g. thermal loadings and generation dispatch) to months and years (e.g. planning for seasonal adequacy and planning of new investments).
Virtual Power Plants: Decentralized and Efficient Power DistributionShafkat Chowdhury
The paper discusses the emerging technology that is Virtual Power Plants (VPPs) as a means for smart Power Management solutions. It discusses the features and functionalities of VPPs and the current projects being implemented.
Presentation from the EPRI-Sandia Symposium on Secure and Resilient Microgrids: Helping Customers Make the Most of their Energy, presented by Phillip Barton, Schneider Electric, Baltimore, MD, August 29-31, 2016.
Presentation from the EPRI-Sandia Symposium on Secure and Resilient Microgrids: Microgrids Lessons Learned-So Far, presented by Merrill Smith and Microgrid Exchange Group, DOE, Baltimore, MD, August 29-31, 2016.
The Role of Energy Storage in the Future Electricity SystemLorenzo Kristov
Energy storage at various scales can be the key to integrating large amounts of renewable generating resources into the electric power system. Growth of storage is advanced by a combination of policies and economics. Presentation for the Portuguese National Committee of CIGRE, 2017.
Presented by Pete Scarpelli, Schneider Electric, Demand Response Resource Center, France at the IEA DSM Programme workshop in Vienna, Austria on 1 April 2009.
Using human-centred design to improve energy efficiency programsLeonardo ENERGY
Human-centred design is being used to make the NSW energy savings scheme more effective. We started with research that identified six key insights for improved scheme operation. It found that the scheme is complex and its fragmented tools and systems create unnecessary barriers to entry. We then used workshops to develop six corresponding opportunities for improved service delivery. To scale up we need streamlined manual processes, more collaboration and improved digital systems. This is especially relevant given recent announcements that the scheme is being extended to 2050.
This talk will present the research, and will place it in the context of changes announced as part of the NSW Energy Strategy. It will explore small, medium and long term changes to scheme delivery identified through the HCD process and our proposed next steps.
The NSW Energy Savings Scheme started in 2009. It has so far delivered projects that will save 27,000 gigawatt hours of energy and $5.6 billion in bill savings over their lifetimes.
Transactive Energy article in Metering International magazine Fall 2013. Provides practical explanation of transactive energy in an evolutionary context.
Peer-to-peer energy trading using blockchainsLeonardo ENERGY
Rapid penetration of distributed generation technologies, combined with grid constraints, and disillusionment with non-consumer centric business models, is leading many to explore radically different configurations of the energy system. One such model, ‘transactive energy’, focuses on peer-to-peer energy trading with the role of the energy company replaced with a trustless transaction layer based on distributed ledger (blockchain) technologies. The proponents of transactive energy argue that it provides social, environmental, economic, and energy systems benefits. This lecture will provide a broad introduction to the field, before discussing the opportunities and limitations of this approach within the energy transition.
Presentation from the New Mexico Regional Energy Storage and Grid Integration Workshop: Virtual Power Plants and Large Scale Renewable Integration, presented by Jay Johnson, Sandia National Laboratories, August 24, 2016.
Presentation from the EPRI-Sandia Symposium on Secure and Resilient Microgrids: Securing Microgrids, Substations, and Distributed Autonomous Systems, presented by David Lawrence, Duke Energy Emerging Technology Office, Baltimore, MD, August 29-31, 2016.
If you buy or sell domestic and commercial buildings in United Kingdom then, you must have Energy Performance Certificate for your property. Easy EPC are the best EPC (Energy Performance Certificate) providers for domestic and commercial property in United Kingdom.
EPC Solutions LLP, which is into Large Scale Infra Projects (Metro, Airports, Stadiums & Other Mega Projects), Energy Solutions (EPC Solutions for Transmission & Distributed System upto 765kV, Contour & Route Survey, Soil Investigating etc.), Solar (EPC), Structure Supply - For Infra, Energy T&D & Solar Segment, MEP Services, SEZ & Other Consultancy Services, BIM Services (Upto LOD 500) & Geographical Information System, IT Services (Web Development, Software Solutions & Manpower Solutions).
Tracxn Research - Energy Storage Landscape, August 2016Tracxn
There have been six acquisitions in this space in 2016 - the largest disclosed deal among them was in May, when Saft Batteries was acquired by Total for $1.1B.
Provides electricity grid basics, why energy storage is needed, describes the behind-the-meter application, and highlights solution for commercial and industrial,
Energy storage has been in use in our society and daily life for decades. Although energy storage has not grown to be a significant part of the electric energy system, recent advancement of energy storage technologies and growing needs for energy storage in both power and transportation sectors make it possible and imperative to accelerate energy storage development, deployment, and adoption. Power systems have to balance electricity generation and consumption in real-time, gasoline and diesel fuel are still the primary sources of energy for transportation, and we generally do not have good ways to conveniently and cost-effectively store a large amount of electrical energy and use it in an on-demand manner. While we need to continue decarbonizing electric power generation through increases in renewable generation, we also need to address transportation as the main source of carbon emissions. Energy storage is an important solution to address both electrification of transportation and other industries and the variability in renewable energy such as wind and solar generation.
Bulk of the existing grid energy storage capacity is provided by pumped hydro energy storage plants that were built to support large baseload power plants such as nuclear generating stations. Battery energy systems are beginning to be deployed at a rapid pace. The requirements of energy storage in the electric grid are still evolving and may differ from those of electrical transportation. Needs for research and development to enhance energy storage performance and knowledge is summarized in the following areas:
1) Energy storage engineering and integration: Effective system integration is a challenging problem for energy storage due to the great diversity of potential applications ranging from behind-the-meter storage to large grid-connected energy storage plants. Each of these applications has its own set of constraints and performance requirements. Over the next decade, the diversity of energy storage installations will expand in the range of applications, in size and scale, and in system complexity. Effective integration is also important to achieve desired cost reduction needed to support large scale deployment. Research gaps in this area include: energy storage installations with higher power capacities and higher working voltages; streamlining engineering to hybridize and co-optimize energy storage with the rest of the system; more effective controls, sensors, and energy management systems; designing modular power converter architecture to minimize system complexity, improve reliability, and reduce integration costs; and industry standards for secure communication and interoperability.
Concentrated Solar Thermal Power can be coupled with Thermal Energy Storage using Molten Salts. This presentations offers a compelling argument why this technology will remain competitive despite future improvements in other storage technologies
How the Energy Efficiency sector can embrace Exponential Leadership principles to spark meaningful change for the environment. Oct 2019 Keynote presentation at The Power of Collaboration conference hosted by ESG / Direct Technology.
Key Drivers for Energy Storage
Technological advancements and decrease in costs
Evolution of utility needs (rise of variable renewable generation)
Increasing customer choice and engagement
Policy and regulatory shifts
Commercialising Grid-Scale Energy Storage Congress 2015 - Programme BrochureAurore Colella
After months of research with utilities across Europe involved in Energy Storage applications, a few things are clear-cut. Stakeholders want to:
- Cut through the technology hype
- Objectively assess the specific applications of grid-scale energy storage across the electricity supply chain
- And very importantly, hear commercial, business case-driven case studies to adopt and implement rather than reinvent the wheel.
For this reason, the Commercialising Grid-Scale Energy Storage Global Congress 2015, taking place in London on 25-26 November, has partnered up with leading European utilities, grid operators, the European Commission and other stakeholder groups to demonstrate and deliver actual results from pilot studies and the future road for commercialising energy storage applications across power generation, distribution and transmission.
The carefully selected case studies will benchmark progress, shape future plans and establish ROI from grid-scale energy storage applied to the entire electricity supply chain.
Decarbonizing the Grid: Pathways to Sustainable Energy StorageChristo Ananth
Christo Ananth, Rajini K R Karduri, "Decarbonizing the Grid: Pathways to Sustainable Energy Storage", International Journal of Advanced Research in Basic Engineering Sciences and Technology (IJARBEST), Volume 6,Issue 2,February 2020,pp:41-50
Tips for Utilities and Regulators on Distribution Planning and Distributed En...Smart Grid Northwest
What are regulators and utilities facing related to planning and operating distribution systems (<34.5kV) with Distributed Energy Resources. Ken Nichols and Frances Cleveland present finding and recommendations from paper written for Western Interstate Energy Board, April 2015.
Similar to DSP02110-2 Next Gen Energy Storage White Paper_INTER V1 (20)
2. INTRODUCTION 3
THE RISE OF ENERGY STORAGE 4
PA’S ENERGY STORAGE DEPLOYMENT LIFE-CYCLE 5
PA’S ENERGY STORAGE CROSS-FUNCTIONAL FRAMEWORK 6
FINANCE AND REGULATORY 7
SYSTEM PLANNING AND OPERATIONS 8
ADVANCED TECHNOLOGY AND IT 9
CUSTOMER OPERATIONS 10
NEXT GENERATION UTILITY 11
GET IN TOUCH 12
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3. INTRODUCTION
Storage and the next generation utility—a strategy guide for the future
Throughout the world, energy storage technologies are at a turning
point. They are becoming more flexible, efficient and capable of reliably
delivering energy to consumers, as needed. They are also playing a
pivotal role in the growth of renewable energy and distributed energy
resources. As technology costs decline and efficiency improves, we
expect to see this market expand rapidly over a short period of time.
For example, GTM Research expects the US Energy Storage annual
market of deployments to rise fourfold from approximately 220 MW
in 2015 to 858 MW in 2019.
If power utilities are to take advantage of this trend, they will require
a cross-functional and well-defined enterprise strategy. Accordingly,
PA Consulting Group (PA) has developed a cross-functional framework
expressly designed to help utilities navigate the considerable uncertainties
of adopting new technologies and gain real advantage in the industry.
This guide examines all the major aspects of a utility’s storage
deployment lifecycle. It highlights critical future impacts and suggested
strategies across four functional utility groups:
›› Finance & Regulatory
›› System Planning & Operations
›› Advanced Technology & IT
›› Customer Operations
CALIFORNIA
As SDG&E’s
Independent Evaluator
(IE), PA has helped
the utility evaluate the
technology, economics
and terms of contracts
of energy storage
offers, including
those to comply
with California’s AB
2514 energy storage
procurement mandate,
presenting the analysis
and recommendations
as reports to SDG&E
and the CPUC.
HAWAII
Hawaiian Electric’s 5kW
battery energy storage
system from Greensmith
allows it to integrate a solar
PV array with an Electric
Vehicle charging station.
NETHERLANDS
The Netherlands
AdvancionTM Energy
StorageEnergy
Storage Array
(10MW) was
announced for
supply/demand
balancing and
transmission grid
support.
GERMANY
The 5 MW WEMAG Younicos
Battery Park, Europe’s first
commercial battery park,
provides grid stabilization.
OHIO
Duke Energy is
expanding its 2 MW
of storage at a retired
coal facility to 4 MW,
which will provide fast
frequency regulation
services in PJM.
TEXAS
South Austin Recreational
Center Distributed Energy
Storage Pilot delivers 15 kW
of ice thermal storage.
UNITED KINGDOM
PA has managed learning
dissemination of UKPN’s innovative
low carbon network projects,
including Smarter Network Storage
(SNS). This initiative has included
deploying two energy storage
systems, one of which, Leighton
Buzzard, was the largest battery
deployment in Europe in 2014.
CHINA
The State Grid Corporation
of China developed the
Zhangbei National Wind and
Solar Energy Storage and
Transmission Demonstration
Project, a hybrid renewable
energy system reinforced with
battery storage. The project
has 16 MW of battery storage
already deployed, and is
expected to expand to 110 MW.
JAPAN
The Tohoku Electric Power
Company announced a
40 MW/40 MWh battery
storage system for its
Minami-Soma Substation,
with operations expected
to begin in early 2016.
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4. Emerging Business Models
It is becoming clear that an evolution in the electric utility business model is
in the making. The traditional cost-of-service utility business model, primarily
based upon the sales of kilowatt-hours to pay for investments in the grid,
is being challenged by a number of emerging trends. These include: flat
or declining load growth, the proliferation of distributed energy resources,
increasingly ambitious state renewable and energy efficiency goals and a
rising appreciation for cleaner generation.
In addition, groundbreaking business model challenges such as New York
State’s Reforming Energy Vision, E.ON’s split of its generation and distribution
business and NRG’s spin-off into a dedicated “GreenCo” business, are causing
electric utilities, competitive generation owners, system providers, regulators
and legislators to question how the traditional utility model should evolve.
Declining Costs and Technology Commercialization
Driven by a combination of increasing demand and economies-of-scale
from adjacent industries (e.g. electric vehicles), the cost of energy
storage—battery storage in particular—has declined precipitously over
the past several years.
The cost of lithium-ion batteries dropped from 1400 $/kWh in 2010 to
500 $/kWh in 2014, or by 64%. The total installed cost of a commercial 2
to 4 hour lithium-ion energy storage system dropped from 3400 $/kWh
in 2010 to 1600 $/kWh in 2014. Furthermore, strategic partnerships and
an influx of corporate venture capital from companies such as NRG, RWE
and GE are helping to commercialize emerging technologies.
Source: GTM Research
A Changing Regulatory Environment
Regulation emerging in jurisdictions and markets across the United States,
Germany and Australia require utilities to examine or, in some cases, mandate
the adoption of storage.
Recent initiatives such as Reforming the Energy Vision (NY), AB 2514 (CA)
and the Final Proposal on Distributed Energy Resource Providers (California
Independent System Operators) have all proposed changes which would allow
utilities to unlock and be compensated for adopting energy storage, partly
overcoming the difficulties in quantifying and realizing its benefits.
Distributed Energy Resources + Storage
The meteoric growth of distributed energy resources (DER)—
photovoltaics (PV) in particular—presents distribution utilities with both
challenges and opportunities. From a planning perspective, capacity and
reliability contributions are typically heavily discounted compared to
dispatch resources. Storage has the potential to transform intermittent
resources like solar PV into one of many assets in the utility’s portfolio to
meet and improve reliability.
In October 2015, NextEra Energy CEO Jim Robo said he expects energy
storage to begin to replace gas-peaking plants after 2020.
Intelligent Grid Infrastructure
The pervasive adoption and use of intelligent electronic devices and
sensors is generating massive volumes of data which has allowed utilities
to operate the grid more cost-effectively and reliably. Energy storage is
no exception to this trend.
Intelligent software solutions enable greater flexibility in determining the
most cost-effective and beneficial times to discharge the storage device.
At the end of 2007, seven million smart meters had been installed in
the USA. By mid-2014, installations reached 50 million, accounting for
approximately 43% of all US homes.
Source: Edison Foundation
THE RISE OF
ENERGY STORAGE
Driving forces
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5. • Integrated resource planning
• Power system production cost modeling
• Base case and sensitivity analysis
• Use case identification
• Organizational capability assessment
for storage-impacted groups
• Energy storage cost/benefit analysis
• Rate impact and revenue
requirement analysis
• Regulatory accounting and
cost allocation
• Regulatory filing development
• ESS hardware and software
system design, development,
and deployment
• Site Selection/Civil Engineering
• Permitting
• Project and vendor management
• Safety/environmental
• RFP development
• Bid evaluation and vendor selection
• External stakeholder engagement
• Strategic sourcing
• Go-to market strategy for new CI and
residential storage services
• Organizational impact
analysis and change
management
• Customer care
and proactive
communication
• Stakeholder
outreach
• Transition
to operations
• Analytics system
performance
optimization
• Business intelligence
and process improvement
Operational
Needs
Assessment
Use Case and
Technology
Pairing
Business
Case
Planning and
Procurement
Design and
Installation
Business
Integration
Optimization
OPERATIONS
DUE DILIGENCE AND PRE-IM
P
LEMENTATION
DEPLOYMENT
MARKET, TECHNOLOGY AND POLICY SCAN
Evaluation of current storage
penetration in service territory
Energy storage systems (ESS)
technology evaluation
Vendor eco-system research
and comparative analysis
Identification of strategic
partnership opportunities
PA’s FutureWorlds
Scenario Planning
PA’S ENERGY STORAGE DEPLOYMENT LIFE-CYCLE
• Use case and “best fit” technology matching across
value chain and possible applications
• Feasibility analysis
• Translation of use cases to business
requirements
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6. ENERGY STORAGE CROSS-FUNCTIONAL FRAMEWORK
Strategic considerations across utility functions
IMPACT:
Deployment life-cycle
Market,
policy and
technology
scan
Operational
needs
assessment
DUE DILIGENCE AND PRE-IMPLEMENTATION DEPLOYMENT OPERATION
Use case and
technology
pairing
Business case
and cost
allocation
Planning and
procurement
Design
and installation
Business
integration Optimization
Summary of cross-functional framework
Finance
Regulatory
• Monitor all asset financing methods
• Monitor positive/negative impact on financing
elicited by new market rules regulations
• Evaluate economic feasibility of proposed
solutions, and potential cost-sharing with
third-party/customers
• Obtain regulatory approval
• Ensure full economic benefits capture
for regulatory reporting purposes and
fair benefit-cost allocation between all
parties involved
• Hedge against market/regulatory risk
during operation
• Create tools mechanisms to track
new OM for storage
System Planning
Operations
• Monitor need for peak shaving
• Monitor system need for more regulation services
due to generation profile change intermittency
• Evaluate interconnection challenges
• Assess operational life of storage
devices and impact on OM costs
• Understand deferred system costs to
support expected value streams
• Ensure data-driven storage operation
and dispatch decisions
• Capture interconnection and
operational benefits and lessons
Advanced
Technology
and IT
• Monitor all vendor/third-party storage hardware
software innovation in the marketplace that
enhance specific solutions
• Be ready to integrate agreed storage
solution with existing SCADA / IT
control systems
• Be ready to integrate with behind-the-
meter systems
• Ensure robust data analytics and
management to support more
real-time operations
• Enable data sharing and
verification with customer
and regulators
Customer
Operations
• Monitor customer behind-meter storage adoption
and risks to system
• Monitor behind-meter aggregated storage
possibilities to address system needs, especially
commercial industrial (CI)
• Manage any impacts to existing
customer rates/ business model
• Develop new contractual partnerships
in solution integration and deployment
with customer
• Deploy storage management solutions
to enhance transaction between grid
and customer needs
• Enhance customer services to
maximize benefits of utility-customer
storage partnership
HIGH
MEDIUM
LOW
HIGH
HIGHHIGH
HIGH
MEDIUM
MEDIUM
MEDIUM MEDIUM
MEDIUMMEDIUM
LOW
LOW
01 02 03 04 05 06 07
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7. Key trends
• Evolving energy markets and
regulations are challenging traditional
methods of valuing storage assets
• Increased deployment of storage
assets is affecting the value of legacy
investments and existing infrastructure
• Adoption of storage assets is adding
complexity to the accurate projection
of asset reliability and lifespan
FINANCE AND REGULATORY
• Ensure all asset financing options are identified
• Conduct due diligence on market reforms,
incentives, tax credits or other legislation
• Check and compare vendor offers
• Consult comparable organizations on best
practice and lessons learned
• Quantify the value of storage to customers and
to shareholders based on the expected benefits
from storage
• Evaluate the cost-benefit allocations between
the utility and customer for customer-sited/
behind-the-meter storage
• Obtain regulatory approval
• Capture relevant data for value
analysis and regulatory reporting
• Design new methods for calculating
operational costs and benefits for
each storage use alternative
• Design new methods of capturing
customer-specific benefits
• Evaluate cost trajectory as
installed components degrade and
vendor services evolve
• Track capacity and ramping tariffs
over assets’ lifetime to determine
payback
• Ensure risks are managed in
energy arbitrage applications, and
are properly hedged
Deployment life-cycle
Market,
policy and
technology
scan
Operational
needs
assessment
Use case and
technology
pairing
Business case
and cost
allocation
Planning and
procurement
Design
and installation
Business
integration Optimization
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DUE DILIGENCE AND PRE-IMPLEMENTATION DEPLOYMENT OPERATION
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8. SYSTEM PLANNING OPERATIONS
Key trends
• System designed to be efficient
throughout the year, rather than
to provide peak reliability
• Revamped operations to incorporate
the increasingly granular consumption
data and optimize the interconnection
and dispatch of distributed
energy resources
• Operational need for regulation
is increasing as more intermittent
resources replace larger,
emissions-constrained units.
Source: Adapted from EPRI, GTM Research
FIGURE 1: DIFFERENT STORAGE TECHNOLOGIES MEET
DIFFERENT NEEDS OF THE ELECTRICAL SYSTEM
Planning Operations groups have to work closer with each
other to determine the most valuable storage projects and
operating models.
Analysis will require support from the utility’s data management,
IT and OT teams.
SODIUM SULFUR
BATTERIES
PUMPED
HYDRO
Power (MW)
UPS/power quality Grid support Bulk storage
Energy (MWH)
SUPER
CAPACITORS
Optimal
for power
quality
Optimal for energy
management
Dischargetime(hours)
COMPRESSED AIR
LEAD ACID BATTERIES
LI-ION
BATTERIES
FLYWHEELS
ADVANCED LEAD ACID
FLOW BATTERIES
• Determine number of peak hours that can be
shaved by storage projects
• Update contingency scenarios to include sudden
loss of intermittent resources over a large area
• Evaluate interconnection and licensing criteria
• Assess impact on thermal, voltage, short circuit,
transient over voltage, frequency stability and
other system planning requirements.
• Determine and calculate the expected benefits
from storage, including metrics such as enhanced
reliability and clean energy.
• Determine the Equivalent Availability
Factor (EAF) calculation/assumption
• Determine the expected operational life
of the storage device
• Calculate the value of deferred
infrastructure and revised regulations
• Analyze how value streams will change
with additional storage
• Leverage increased market,
grid and asset data to optimize
dispatch decisions
• Update interconnection criteria
and threshold levels for deploying
standardized designs or solutions
• Verify and update assumptions
applied during planning phase
Deployment life-cycle
Market,
policy and
technology
scan
Operational
needs
assessment
Use case and
technology
pairing
Business case
and cost
allocation
Planning and
procurement
Design
and installation
Business
integration Optimization
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DUE DILIGENCE AND PRE-IMPLEMENTATION DEPLOYMENT OPERATION
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9. ADVANCED TECHNOLOGY IT
Key trends
• The convergence of information and
operational technology are facilitating
adoption of energy storage solutions
• New technologies are quickly
developing scalable modular
system design, integrating battery
management and legacy systems,
centralizing dispatch of distributed
resources and more
• The industry is working to
define new standards for
storage vendor components and
communications protocols
• Develop a firm understanding of existing
vendor alternatives
• Determine the technologies and solutions that
can be paired with the intended applications
• Analyze how storage assets and control
systems will integrate with the utility’s IT
architecture
• Develop proactive measures to prevent storage
asset from becoming “stranded”
• Create clear governance structure
across business units for storage/IT
decision-making
• Align storage alternatives and
operational criteria to business
requirements and system
specifications
• Ensure integration with behind-the-
meter IT/control systems
• Evaluate organizational and system
integration impacts on operations
(SCADA, OMS, ADMS, DERMS);
customer (CIS, CRM); and finance
• Assess and address change
management and training needs
• Incorporate advanced data
analytics into energy storage
operations
• Initiate measurement and
verification methodology and
technology to ensure operational
efficiency and regulatory
compliance
• Consider the implementation of
a distributed energy resource
management system
• Incorporate lessons learned in
future strategic planning activities
Deployment life-cycle
Market,
policy and
technology
scan
Operational
needs
assessment
Use case and
technology
pairing
Business case
and cost
allocation
Planning and
procurement
Design
and installation
Business
integration Optimization
01 02 03 04 05 06 07
DUE DILIGENCE AND PRE-IMPLEMENTATION DEPLOYMENT OPERATION
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10. CUSTOMER OPERATIONS
Key trends
• The importance of real understanding
and involvement of customers in
storage deployment is key
• Behind-the-meter storage is rapidly
becoming a high-value service
proposition for the sector
• Third-party storage solutions
such as Tesla’s PowerWall and
PowerPack are gaining ground in
mainstream sectors
• Utilities are creating new business
models and revenue streams
from customer-sited distributed
energy resources
• Assess market to determine current
penetration/interest in storage
• Identify where behind-the-meter storage could
have locational value
• Identify competitors and/or strategic partners
active in the market and understand the
technical and economic value they deliver
• Define capabilities and processes for
outreach, acquisition, contracting,
interconnection and installation
• Build business case for distributed
storage that considers customer rate
impacts
• Develop compelling customer
benefits message for regulatory
communications
• Complete segmentation for all
customer groups
• Enhance contact center processes,
roles and technology platforms to
support customer storage assets
and complex account data
• Apply customer analytics to
evaluate load profiles and the
value of distributed storage
• Perform analysis of customer
storage and demand response
programs for continuous
improvement and regulatory
reporting
Deployment life-cycle
Market,
policy and
technology
scan
Operational
needs
assessment
Use case and
technology
pairing
Business case
and cost
allocation
Planning and
procurement
Design
and installation
Business
integration Optimization
01 02 03 04 05 06 07
DUE DILIGENCE AND PRE-IMPLEMENTATION DEPLOYMENT OPERATION
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11. Choosing the right storage strategy for a Next Generation Utility requires a
cross-functional enterprise approach across the deployment life-cycle
Each stakeholder group will bring their unique competencies to the process of evaluating, deploying
and operating a chosen storage strategy. Utilities that are most effective in deploying storage solutions,
however, do so by bringing the most impacted and pivotal stakeholders together to integrate new and
existing technologies and distributed energy resources into core operations. Informed and integrated
enterprise approaches are the hallmark of a successful Next Generation Utility strategy.
The Next Generation Utility
Utilities have historically struggled to implement new
technologies at scale and in an accelerated manner.
Indeed, PA’s landmark Innovation survey and report
“Innovation as Unusual (2015)” found that nearly half
of the survey respondents from the energy industry
believe that they lack the skills necessary to make
innovation happen and roll out new technologies
across their business.
At PA, we consistently track emerging
energy business models, distributed energy
resource deployment strategies, technology
commercialization, intelligent grid infrastructure
deployments and the rapidly changing regulatory
environment. For each of these domains, in addition
to this paper’s four utility function areas as related
to storage, PA has assembled subject matter experts
to provide an end-to-end view of the impacts and
required strategies required to become a Next
Generation Utility.
We have worked with clients globally across the
energy storage deployment lifecycle, including
investor-owned utilities, public utilities, third-party
investors, independent system operators and DER
providers. We provide consulting services regularly
in the areas of strategic planning, independent
evaluation, vendor management and market advisory.
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