All Together Now–The Electric Utility, Consumers and Community Energy Storage

by Larry Dickerman, Rick Fioravanti and Ralph Masiello, KEMA

Providing electricity at a reasonable price is no easy task–ask any utility executive. And it has become far more difficult because of substantial differences between peak and average load in our electricity grid. But what if electricity demand could somehow be flattened? What if the size of much of the electric utility infrastructure could be reduced to levels lower than what it is today to meet the same load? The practical difference is that far less money would be spent on wire and transformers while rewarding consumers with better service and lower cost.

Reliable electric service is a challenge for utilities because so much has to go right over long distances for electricity to be available when customers want it. The generators have to work and adjust for immediate increases in demand. Transmission and distribution lines have to be fault-free over many miles. Community energy storage (CES) could be part of the customer price-reliability solution. CES straddles the transmission and distribution domain as well as the customer-side domain of applications. It offers electricity customers reliable electric service at a reasonable price with as little environmental and aesthetic impact as possible.

The What and Why of Community Energy Storage 

CES could change substantially the way capital is deployed in the electric utility industry, as well as the energy options available to end customers. CES is a small distributed energy storage device connected to secondary transformers serving a few houses or small commercial loads. As the name implies, the primary advantage of the stored energy is to benefit a local community by enhancing reliability, reducing required capital investment by flattening peak loads, and compensating for the variability of distributed renewable resources such as solar on rooftops.

A CES device has several advantages over other forms of energy storage. The batteries that make up the CES technology are similar to the technology being developed for plug-in electric and hybrid electric vehicles. Because CES devices and batteries for vehicles will be produced by several manufacturers in relatively high numbers, prices likely will be reduced faster than other storage technologies being used in utility applications. The CES system also might provide a secondary application once the batteries have reached their vehicle life, potentially further reducing CES devices cost.

Inherently, the closer the storage device can be to the load, the more it can reduce losses on the utility system. In addition to loss reduction on the distribution primary and station transformer, CES devices can reduce loss on distribution transformers. In addition, the CES device can more effectively mitigate the variability of solar energy at individual homes and businesses.

The solution is only enhanced by the potential offered by smart grid systems. Distributed CES devices can be controlled by a smart grid to act locally or be aggregated together for the greater benefit of the utility as necessary. Forty CES devices in a residential subdivision could act like a single 1-MW device by using appropriate controls. Conversely, in an outage the device could be used to maintain service to customers served by a single distribution transformer.

Moving the Technology Forward

Although there are no major technical barriers to CES, some significant details need to be developed and tested in pilot programs. An open standard has been created by American Electric Power (AEP) as a starting point. Even when the devices are deployed without a smart grid, limited communications with the utility and the end-use customer will be highly desirable. Standardization of community energy devices will help reduce cost and speed implementation.

CES can provide multiple benefits from the same installation, depending on the circumstances and changing needs of the utility system or end-use customer. A CES close to the customer can provide continuing service even when the utility system is not able to provide electricity. With a fully charged battery, the CES device should be able to provide full service for two or three hours or much longer if customers reduce usage. A CES also can improve power quality for end customers. Momentary interruptions often irritate customers as digital equipment needs to be reset after momentary interruptions. A CES device can provide the ability to ride through most momentary interruptions caused by disturbances on the utility.

Another potential benefit focuses on the difficult issue for electric utilities with power factor correction. Normally, capacitor banks are used on distribution systems to improve efficiency and reduce the load on wires and equipment. Many of the capacitors are switched at appropriate times to try to change the power factor correction according to actual load. The capacitor banks often require maintenance and repairs. A CES device at the customer location can correct power factor with greater accuracy and without the maintenance issues of a capacitor bank. The benefits of power factor correction on the distribution system also help the transmission and generation aspects of utility operations.

Using a smart grid, a group of CES devices can be aggregated to look like one large device. Once aggregated, the CES devices could be used for load leveling based on substation and grid needs. The total generation required at peak also could be reduced. In addition, the CES devices could be used to provide ancillary services through further aggregation at the grid level.

The Customer, Utility Win

Though there is great emphasis on the benefits of storage for utilities and merchant power producers, the storage concept is not limited to just the generation, transmission and distribution portion of the grid. Storage also has the potential to provide benefits on the customer side. With home area networks, storage can prove to be a tool and enabling technology for future grids.

CES near end-use customers can solve multiple problems at the same time and, as a result, look attractive to utilities, customers and regulators. While there are challenges to the consumer market storage applications–economies of scale, range of end-user value, cheaper technology alternatives–there still are compelling potential applications for customer use of storage. These potential applications are further enhanced when examined in the context of smart grids and intelligent systems that are being created. The significant benefit that this trend provides is the aggregation factor that can be added to the potential applications. Surges in interest of solar applications are also re-igniting some of the solutions originally proposed.

When focusing on the end user, customer applications have to provide a device that can be integrated seamlessly into daily operations for a commercial facility or daily life for a residential home. There are applications that show promise in providing benefits for end users and, when coupled with aggregated networked systems, also will have the ability to tap into larger utility and societal benefits.

This article includes excerpts from KEMA’s Utility of the Future leadership guidebook, “The Promise of Energy Storage.”

KEMA site:


Larry Dickerman is a principal consultant at KEMA. With more than 35 years in the industry, he has experience in asset management, emergency restoration planning and automation technology applications. Reach him at

Rick Fioravanti is director of storage applications and support at KEMA. Reach him at

Ralph Masiello is senior vice president at KEMA. Reach him at


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