DER-Grid Edge, Energy Storage, Executive Insight

Three critical steps to ensure energy storage project success

Lead image: Image by Pete Linforth from Pixabay

Utilities and power producers are turning to distribution-side energy storages systems (ESS) to improve reliability, increase capacity, support renewable energy integration, and meet regulatory mandates. The benefits are real, but a lack of standardized best practices for implementation can pose a challenge and utilities are often concerned about risks.

So, how do utilities evaluate their options and select the best path forward, limiting disruptions and maximizing value?

ESS project teams, including utilities and their technical partners, should follow a proven, three-phase implementation strategy to take their projects from concept to contract. Each step of the three-phase approach (Figure XY) has a strategic purpose and informs the next, giving a utility greater solution clarity and confidence as its investment progresses. The end-result is an optimized, buildable storage system that will safely integrate with existing infrastructure and meet utility goals.

Phase 1: conceptual design

A conceptual design that addresses operational needs is the foundation for a buildable project. Low-cost, high-impact analyses during this phase inform the preliminary design, verify its feasibility, and maximize its value. The goal is to secure internal and state utility commission confidence in the project early – and avoid costly and time-consuming redesign work and changes to regulatory filings.

The first step is to understand the project’s goals and needs. A study of the service territory is key to identifying the existing system’s reliability issues and opportunities to apply storage solutions. By assessing internal metrics like power quality and system interruptions, the team can target specific project locations and define initial design fundamentals such as structure, sizing and use cases.

Examining ESS technology vendors and their capabilities – through market research, requests for information, and consultation with technical experts – can provide valuable insight early in the design process.

With general geographic and preliminary system targets, the project team can assess sites and identify viable options. Low-cost surveys and visual renderings of the ESS on different sites help inform the utility’s decision and favorably present the project to regulators and communities. These efforts proactively address potential concerns and minimize the chance of choosing a site with fatal flaws.

Presenting the analysis and conceptual design in a feasibility report helps guide project implementation. Beyond traditional components like schedule and budget, project teams should identify all potential project risks and thoroughly describe how the design mitigates them. This will position the storage system for successful regulatory approval and foster a smoother transition through subsequent phases.

Phase 2: specification and optimization

By honing the design and translating it into technical specifications, the project team can move forward with system procurement. Because energy storage is still developing and the industry lacks standardized technology, controls and protocols, specifying a “utility-grade” system is critical. The team should communicate expectations and requirements to system vendors through a competitive request for proposal (RFP) to ensure a safe system.

To kick-off this phase, potential sites should be considered in more depth. Once the project team selects the best site, it will need to gain control of the site and secure proper approval from the relevant authorities.

The team can leverage the utility’s unique position on both sides of the ESS interconnection to make iterative adjustments to the design and existing infrastructure, maximizing system value and performance. Using simulation tools, the team can evaluate the proposed system under various scenarios to verify the design and further reduce risks.   

At this phase, the project team is ready to develop formal technical specifications for a utility-grade, buildable system that will meet the utility’s goals. The team will define requirements for critical components of an ESS: the battery, power conversion system, control system and a variety of supporting components. It will also specify important operating conditions, use cases, performance requirements and vendor pre-install requirements.

A competitive RFP is an effective tool to attract vendors who will meet the project specifications at a reasonable cost. The RFP should include key requirements but leave enough latitude so that vendors can demonstrate their expertise and provide recommendations.  

Phase 3: vendor selection and contracting

The project team can secure a ready-to-build ESS contract by evaluating and selecting the right vendor. To implement the ESS vision, vendor choice is crucial—so the team will want to compare vendors through a comprehensive, consistent evaluation approach.

Understanding the vendor landscape will help the project team select an effective partner. ESS vendors offer diverse approaches to integrating storage systems at a utility scale and have varying levels of project experience. There is also a disparity between how vendors perceive themselves and their actual capabilities, so the project team will want to evaluate potential vendors on a fair and informed basis.

Responses to the RFP should provide key insights – and complementary interviews can provide an even better understanding of vendor strengths and weaknesses. Vendors should demonstrate a robust understanding of the need for the project and the problems it solves. The project team can also learn much about a vendor’s seriousness by its approach to project risks, such as safety considerations, choice of technology, partners and resources.

Utilities are best served by a vendor who maximizes the value of the project by mitigating risks and extending ESS capabilities wherever possible for a ‘future-proof’ solution. Utilities can protect their investment through a robust contract – with both commercial and technical commitments from the vendor. Once complete, the final negotiation pays off quickly as the vendor can proceed with construction activities similar to other guaranteed utility work.

Ultimately energy storage systems live up to the hype when designed, built and implemented effectively. Applying this three-phase strategy in partnership with trusted technical experts who understand all facets of utility-grade ESS challenges and opportunities provides the best recipe for project success. Utilities and power providers can apply distribution-side energy storage systems and other non-wired solutions to transform our grid and provide reliable, resilient power for generations to come.

Lead image by Pete Linforth from Pixabay