Utility behind the meter storage

Michael Goldman, director on the Energy Efficiency team at Eversource Energy, the largest energy delivery company in New England, spoke recently about utility sponsored behind the meter storage programmes. This is inclusive of things like demand response storage, and managed electric vehicle charging. Smart Energy International, along with DISTRIBUTECH Plus, shares some of his thoughts on the topic.

Peak curves in New England have changed over the years with the annual peak only occurring over a couple of hours each year. Eversource’s focus has been on reducing the ISO New England system peaks and reducing capacity costs; whether that took the form of reducing the total amount of capacity procured, or how those capacity costs were allocated to load-serving entities.

Throughout the development of the programme, however, there was always a consideration whether these programmes could help alleviate distribution constraints, how they could potentially reduce transmission rate exposure, and even, whether Eversource could participate in some of the wholesale markets.

In order to reduce the overall system peak, and bring the overall load down, Eversource needed to better understand which customers were contributing to those peaks. Extensive research indicated that the utility needed to focus on multiple customer classes.

In addition, Eversource needed to develop a portfolio of solutions that would be attractive to all these different customers. The end result was a storage offering that would attract a wide array of customers, and technology types.

All of Eversource’s demand response offerings operate under the name Connected Solutions, including Wi-Fi thermostats, EV managed charging and more traditional commercial industrial curtailment activities. The focus, however, is on several storage offerings for both residential and commercial industrial customers.

These programmes are all predicated on a bring-your-own-device structure. Goldman says: “What that means is that we don’t offer an upfront incentive for the equipment, but rather, we’ll pay customers for allowing us to dispatch these units during times of peak demand. So, the incentives are essentially for capacity, not for the equipment, but we don’t pay a capacity reservation type of payment.”

How it works

At the end of each season, the average kilowatt performance of a customer storage asset during all the hours when an event is called are calculated, and the customer is paid out the kilowatt incentive multiplied by the average kilowatt performance of that unit. This takes a couple of different forms: There is a residential daily dispatch option, where a customer is paid $225 per kilowatt of average performance over the summer season. Customers are dispatched 30 to 60 times per season for three hours per dispatch, and they’re given a day ahead notice.

For commercial industrial customers, there are two different offerings. There is a similar daily dispatch offering which pays $200 per kilowatt of average performance for 60 calls per season, with each one of those calls lasting two to three hours. There is also a targeted dispatch offering which pays $100 per kilowatt for up to eight dispatches per season up to three hours.

“In our residential programme, for example, if you had a five-kilowatt system, you would earn up to $1,125 per year.” Goldman explains. “The warrantied life for a lot of these batteries is about 10 years. So, if you participated in our programme for those 10 years, you’d earn $11,250. That’s roughly the cost of the battery.


“And you can use that battery for whatever purposes you want when it’s not being dispatched by the programme. We’ve talked to a lot of vendors and participating customers and the feedback that we’ve received is that this retail programme is a really valuable and important revenue stream for their projects.” Central to the success of the programme is how certain software technologies are used to support the storage and other demand response programmes. In order to aggregate all the different types of distributed energy resources into a single platform and enable the utility to have a single point of control, Eversource uses a centralised platform.

Says Goldman: “It is our experience with third parties that informed the decision to create this framework and platform that could accommodate all of these different non-utility owned assets. So as long as they have compatible communication protocols, these third-party assets can be incorporated into the platform. This is critical in order to get regulatory support, because we’re able to include behind the meter, customer or third-party-owned assets into the programmes.”

Communication is key to inclusion in the programme. In order to communicate and send dispatch instructions to all of the storage units and other distributed energy resources, Eversource is utilising what’s described as a cloud-to-cloud integration. In this type of integration, Eversource, as the electric distribution company, signs into the online DERMS portal and issues dispatch instructions.

“These instructions are then sent to the clouds of all the various device manufacturers. And then those device manufacturers relay those dispatch instructions down to each device to actually execute on,” Goldman explains.

“If a device can communicate over the Internet, and it’s able to receive our dispatch instructions, then we can potentially incorporate it into our programme. And that gives us some degree of visibility and control. This really helps bring third party assets into the fold and expands the number and types of assets we can control. From an optics perspective, it’s actually more desirable to have the device manufacturer execute on essentially that last mile communication, instead of the utility directly controlling the customer’s device.”

Goldman says this is just part of a longer-term programme. By way of an example: In the future, the DERMS could be a component of an advanced distribution management system that communicates directly with the distribution management system and SCADA and it gives the company a full view of all the grid edge assets. It would be possible to start incorporating automated business rules that will allow for seamless dispatch.

“Once we have a digital representation of all of our different assets in from the programme in our terms, it really opens up the possibilities of what we can do and how we can dispatch those assets. And this is where it gets interesting – with these future use cases related to the grid of the f uture. If I can dispatch by geography, or if I can match behind the meter assets to the grid topology, I can now dispatch these assets if there are distribution congestion issues, or if I want to use these for something like a volt var optimisation type of programme.

“In a future state, you can really envision a DERMS that is either embedded directly into a distribution management system, or maybe it’s a standalone DERMS, but it’s constantly feeding information to the DMS so that those grid operators have better visibility into what’s happening at the grid edge and they can optimise accordingly.”

Eversource has just close to 400 residential customers enrolled in the programme, along with 15 projects on the commercial industrial side, representing about six megawatts of load. This represents both lithium ion and thermal storage.

“We really feel like we’ve generated some momentum for the programmes, and we expect to continue to enrol more customers going forward. We’re entering the final year of a three-year plan. As we start thinking about our next plans, we’re really optimistic about the opportunities in this area.”

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