Climate Denial Crock of the Week

Utility Dive:

Ask people how they segment the energy storage industry, and you’ll often hear them divide it between customer-sited or behind-the-meter storage and “utility-“or “grid-scale storage.” But if you then ask them what they mean by “utility-scale,” you can’t get a clear answer. Is it 5 MW, 10 MW, more than 20 MW? Do they mean “front-of-meter”? Or connected to the bulk transmission system?

And whatever “scale” threshold they use rarely relates to the “utility” part of “utility-scale.” What about the size of the storage installation makes it relevant to a utility or the grid?

The reality is that energy storage of all sizes can provide useful services to utilities or grid operators. And it is past time for regulators and market operators to update their policies and programs to realize the full potential grid value from storage that hasn’t been considered “utility-scale” before.

No, we’re not calling for the end of the large-scale storage industry. We’re saying that distributed, smaller-scale storage can provide all the same value to the grid that large-scale storage can and should be explicitly encouraged to compete on playing fields that policymakers have leveled everywhere.

From non-wires solutions in New York (Brooklyn Queens Demand Management or BQDM) and local capacity in Los Angeles (Southern California Edison Local Capacity contracts), to resource adequacy (RA) and Reliability Must Run (RMR) replacement at the California ISO and forward capacity in ISO New England (SunRun’s 20 MW residential aggregation contract), distributed storage developers and operators are proving that the technology works and can be cost competitive. Where markets have been opened to allow distributed energy storage to compete, ratepayers benefit with lower energy costs.

Recognizing this, FERC first issued Order 841, requiring the wholesale markets to open up to individual storage installations as small as 100 KW, regardless of interconnection point (transmission, distribution or behind-the-meter). This immediately nullified anyone’s previous threshold for “grid-scale” storage, making the term itself meaningless. The next step for FERC will be an Order on DER aggregation, which presumably will require the ISO/RTOs to allow distributed storage aggregations to compete head-to-head with larger scale, single-site storage installations and all other wholesale market resources.

Storage aggregations, popularly known as Virtual Power Plants (VPPs), should be a tool in every policymaker’s toolbox for achieving a reliable, resilient, cost-effective electrical system. A recent report by Station A shows how much potential RA value California could be leaving on the table if it doesn’t fix the RA rules for solar+storage VPPs. Because the Public Utilities Commission’s RA counting rules and the CAISO participation models are slow to adapt, gigawatts of system and local capacity value are being squandered.

This is not theoretical. One example is Stem’s commercially operated VPPs participating in wholesale markets and utility programs.

Yet, research reports, industry conferences, consultants and all manner of stakeholders continue to use the terms “utility-scale” and “grid-scale” as separate from VPPs, perpetuating the fallacy that energy storage technology and projects need to be large or long-duration to provide meaningful services to grid operators. This wouldn’t be a serious problem if this misperception didn’t keep cropping up in legislation and the design of regulations and programs.

At least three bills introduced in Congress this spring referenced “grid-scale” storage, locking out smaller storage from the research or deployment funds intended to make the grid more reliable or resilient. Also, arbitrary size thresholds abound in incentive programs and procurement solicitations around the country. This whole issue may sound like nitpicking, but in this line of work, bad terminology creates bad policy.

So, next time you hear someone use the term “grid-scale” or “utility-scale” for storage, ask them what they really mean. If they give you a threshold number, find out the reasoning behind the number. If they really mean “front-of-meter” or “transmission interconnected,” push them to use those terms. Once you get into a conversation about the grid services they care about and how any size storage can provide those services with VPPs, they’ll hopefully want to retire the terms “utility-scale” and “grid-scale” faster than a storage VPP helps retire dirty peaker plants.

for example:

Green Mountain Power:

It was oppressive and super-hot outside, a few days into the July heatwave, when Mike Wheeler looked at an app on his phone. It showed him that the two Tesla Powerwalls – essentially big batteries – in his basement were draining power. It might seem like a bad thing, but he was smiling. This is exactly what was supposed to happen.

“It was so cool! I thought, ‘it’s going to grid right now,’“ Wheeler said.

Wheeler got those Powerwall batteries through a partnership with Green Mountain Power. They provide backup power for his home, like a generator would during an outage. But, instead of using oil or gas, Powerwalls get their charge by storing energy from either the electrical grid, or from a customer’s solar panels.

Hundreds of GMP customers, just like Wheeler, now have this kind of clean, cutting edge back up power in their homes. And, all those Powerwalls played a big role in cutting carbon and costs for all customers during the heatwave. What Mike Wheeler was seeing on his app, was GMP sharing access and leveraging the stored energy in those Powerwalls to put back on the grid during those high use heatwave days. GMP also used energy from larger batteries at its solar facilities in Rutland in Panton to try to “beat the peak” – all of that power deploying at one time to reduce demand and cut costs directly for customers.

The result? The equivalent of taking 5,000 homes off the grid – and that created savings for all GMP customers that could reach $500,000.

“This is a game changer. We’re thrilled that our work to be on the edge of innovation and deploy these new technologies in partnership with customers and communities is really paying off for all of the customers we serve,” said Mary Powell, GMP’s president and CEO.  “During the heat wave, we were able to leverage these innovations to think differently about managing the energy system affordably, allow our customers to use their cooling systems to stay safe and comfortable, all while lowering the peak, ensuring the stability and safety of the grid, and driving down costs.”

Along with GMP’s solar-storage facilities in Rutland and Panton and about 500 Tesla Powerwalls, GMP also has partnerships with thousands of customers to tap into stored energy in their water heaters or reduce electricity flow through their EV chargers when power demand is high, increasing savings for all customers. During the hours of peak demand, this helped GMP offset approximately 17,600 pounds of carbon, the equivalent of not using about 910 gallons of gasoline. GMP’s everyday power sources are 90 percent carbon free.