What is the future grid going to look like? That is a question that has been driving a great deal of discussion and debate lately, but the answer is really a simple one. After all, the digital genie has been out of its bottle for a couple of decades and the technological building blocks have defined the future grid. Of course the hardware looks about the same as it always has, and some quasi-experts thinks that means old fashion, but looks can be deceiving. There is an old saying about judging a book by its cover.
Modern transmission devices can monitor themselves and produce data that is stored on the cloud. Through cloud-based computing linked with sophisticated software programs, it’s possible to spot trends, predict component health and avoid equipment failure. Despite all of these capabilities, there is one area that has been found to be needing attention.
Recently, ASCE’s (American Society of Civil Engineers) 2021 Infrastructure Report Card published its review on the infrastructure in the U.S. Of particular interest to our industry is the Energy report. The report said, “The distribution network accounts for 92% of all electric service Interruptions.” The report went on to say, “The “last mile” of the electric network grew 54% over the past two decades.”
From the Edge
There are a lot of reasons for the service interruptions, but whatever the cause there is no tolerance for any interruptions. As a result, the behind-the-meter (BTM) segment is leading the way with some powerful technologies coming from the edge of the grid. Customers are installing distributed energy resource (DER) technologies in unprecedented numbers, and much faster than anyone could have predicted.
A 2020 report from Wood Mackenzie bears this out reporting, “Cumulative DER investments in the U.S. will eclipse $110.4 billion or about 387 gigawatts between 2020 and 2025.” Supporters of BTM DER see the expansion of the technology as being the key player for reducing the distribution system’s 92% interruptions.
When benefits of DER are listed, improved robustness and resiliency are usually at the top of the listing. But this speedy growth from BTM has some groups concerned with the rising penetration of DER systems. Some are predicting hundreds of millions of DER installations in the not too distant future. Power experts are worried about how will grid operators be able to control and manage them without compromising the grid.
It’s fortunate that suppliers like Enbala Power Networks, EnergyHub, GE, Hitachi ABB Power Grids, Oracle, Siemens, Schneider Electric and others have developed sophisticated distributed energy resource management systems (DERMS) with artificial intelligence, cloud-based computing, and cutting-edge software to step in where humans would be at a loss, but that is getting off the subject.
The important question is, how are DER technologies going to achieve those levels? Well, it‘s already started with thousands of megawatts (MW) of photovoltaic (PV) rooftop solar sitting on buildings around the world. PV is the leading DER application, but BTM battery energy storage systems (BESS) are gaining ground especially when solar+storage is considered.
Removing Speedbumps
DER technologies are offering ancillary services with a value stream and that is spurring growth, which is fueled by regulatory support. For years this high quantity has been denied access to the marketplace. Some DER proponents say these services (i.e., peak shaving, voltage control, frequency support, backup, stability, etc.) have been overlooked, while others say they were ignored.
Change started in 2018 when the Federal Energy Regulatory Commission (FERC) issued Order 841. It opened wholesale energy markets to energy storage. Basically, energy storage was allowed to provide ancillary services in regional transmission organizations (RTO) and independent system operators (ISO) wholesale energy and capacity markets, but that wasn’t the end of FERC’s push.
Last year, FERC issued Order 2222, which removed barriers to the aggregation of DERs. It allowed aggregators to bundled together assets like electric storage, intermittent generation, demand response, and thermal storage for participation in regional organized wholesale electricity markets. RTOs and ISOs were directed to allow DER aggregators to sell ancillary services in all regional organized wholesale electric markets.
A short time later, FERC issued Order 2222-A , to block an important loophole. Keeping it simple, prior to Order 2222-A, if a state didn’t allow grid operators to accept offers for aggregated resources then the grid operator invoked an opt-out option for the transaction. With Order 2222-A the opt-out option no longer exists, and grid operators can accept these ancillary resources.
Unlocking New Markets
These FERC orders deliver much needed regulatory support, but they also add monetary value to DER’s ancillary services. FERC has opened the marketplace to DERs as never before, and it happened at an ideal time. The technologies are experiencing what might be called a benevolent perfect storm. DER technologies have matured, become easier to use, been combined with other applications, and their prices have been steadily dropping into affordable zones.
Rooftop solar is a good example. The typical cost of PV panels continues to steadily drop, and the ratings of the panels are increasing. A Department of Energy (DOE) site reported the average prices range from $2.40/watt to $3.22/watt so far in 2021. DOE also pointed out the technology’s improvement helps convince buyers to spend the money. The typical panel rating is running from 400 watts to over 600 watts per panel. One manufacturer said their panels generate 800 watts per panel.
Energy storage is also benefiting from dropping prices and increasing capacity. According to Bloomberg New Energy Finance’s (BNEF) 2020 report, the average price for a Li-ion battery pack dropped to about $137/kilo-watt-hour (kWh) in 2020. BNEF is expecting the price to be under $100/kWh by 2023. That price comes with some caveats BNEF said such as the scale of the project determines the price, but even at $150/kWh to $170/kWh more buyers will be willing to spend the money for the BESS.
Electric vehicles (EVs) are providing ancillary services with the vehicle-to-grid (V2G) application. EVs are experiencing a global rise in popularity and the surveys they will only increase numbers over the next five years. The V2G application recognizes these mobile batteries can provide grid ancillary services when connected to charging systems.
Thinking Smaller on a Larger Scale
With the issuance of FERC’s three orders, there has been a significant boost to BTM DER aggregation projects. Press releases (PRs) have increased as utilities and aggregators announce new projects offering these services. With a cash flow, these applications are becoming valuable assets. An aggregated network of independent BTM DER devices can be very valuable to utilities, RTOs, and ISOs.
They do, however, bring a new level of complexity to controlling the interaction of the aggregation safely with the gird’s daily operations. It’s manageable because of today’s sophisticated software and powerful cloud-based computing that are addressing those issues. Let’s look at some of the projects that are producing interesting results.
An apartment complex in Herriman, Utah was recently completed with some unique features gridwise. It has 600 apartments and each one has a Sonnen lithium iron phosphate ecoLinx battery. The complex’s total capacity is 5 MW with 12.6 megawatt-hours of energy. The batteries are charged by 5 MW of rooftop solar PV. Each of the apartments batteries will be aggregated together and managed by Rocky Mountain Power to provide emergency power, manage peak demand, and give owners a revenue stream.
A recent PR reported that Con Edison and Swell Energy are partnering in a 500 kilowatt capacity non-wires project to reduce demand in the Queens area of New York City. They will be retrofitting solar-powered batteries into 300 homes with existing solar panels creating an aggregated DER network.
Another PR reported that San Diego Gas & Electric (SDG&E) had kicked off a five-year V2G pilot program with the Cajon Valley Union School District. SDG&E said that six Lion electric school busses will be connected to 60 kW bidirectional DC fast chargers. The buses will discharge energy to the grid during peak demand hours. The V2G technology that will be used in the pilot is developed by a San Diego-based company called Nuvve. “We need a grid that is resilient,” said Marc Trahand, executive vice president of marketing with Nuvve. “That enables the use of renewable energy in maximum capacity.”
It's interesting, the size and complexity of our grid with all its shortcomings and weaknesses are causing us to think smaller on a larger scale. Aggregating and controlling a large number of small ancillary services from BTM DER applications is the inspiration behind the virtual power plant (VPP) that is gaining popularity.
The VPP scheme gathers a network of independent DER systems, provides a cloud-based control system and makes them perform like a traditional generating resource. If the aggregation experts are correct, our future grid maybe moving toward a non-traditional approach like these non-wires alternatives. The trend is advancing technology and aggregated ancillary services bring the future one step closer!
