The Case for Energy Storage Software

The Case for Energy Storage Software

by John Jung, Greensmith Energy Management

From the outset, smart grid promised to improve the electric grid by combining existing and new electric infrastructure with modern computing technology. But for many years, the energy storage industry thought it had a battery problem. Specifically, the value of energy storage was driven mostly by a better battery.

What followed were battery investments in research and development and process manufacturing–often capital-intensive–producing a steady chain of chemistry discoveries and announcements. The battery industry delivered genuine innovations and performance improvements; however, with the continued proliferation and associated cost improvements and ubiquity of computing technologies, energy storage can offer much more than finite cycles of charging and discharging. Energy storage can be computerized to use real-time information, connect to and optimize other grid systems and assets, and behave as an intelligent device or network of devices. Instead of thinking about energy storage as batteries in a box, it might be more productive for the industry to visualize energy storage as an intelligent computer that contains batteries and inverters.

For the past few years, industry investments focused on the deployment of smart grid hardware: sensors, communication networks and ancillary devices such as electric vehicles and distributed generation. Like the developments in the broader computing industry, however, the future of smart grid lies in software and data, which will allow grid operators and customers to make better decisions. The rapid growth of smart grid lies in advanced combinations of human and machine learning to provide optimization, insights and predictive technologies that already are revolutionizing the broader computing industry. Once the hardware tools are in place, the value of the smart grid will be in deciphering data and creating actionable plans for energy management at centralized and distributed points in the grid.

Changes in Energy Storage Infrastructure

Energy storage, particularly distributed energy storage, remains in an early stage of the overall infrastructure build out. Two centuries of invention have a better battery, but until recently, the industry did not have a cost-effective chemical battery to reach commercialization for grid-scale energy storage.

Battery and inverter costs have been relatively high, especially compared with the other low-hanging options at a utility’s disposal. The battery industry, however, recently has seen sweeping changes similar to those in the solar panel manufacturing industry. Battery manufacturing capacity has expanded rapidly during the past 18 months, driving prices steadily downward. Although this changing environment raises mixed feelings within the industry, it’s great news for consumers, who will benefit from the low-cost, highly efficient technology that will prevail through market changes.

RAPID GROWTH

About half of all energy storage system (ESS) projects listed in the Department of Energy Storage Database were commissioned in the past two years–a sign of the industry’s rapid growth. Projects range from early experimental projects to large-scale commercial utility systems.

Early installation could be labeled the Wild West stage because customers had few strict requirements on hardware specs and projects just needed to be safe and carefully monitored.

Since those early installs around 2009, the market shifted to provide bidirectional capabilities, and now about 10 name brand power conversion system (PCS) companies have ESS-specific products. As the market expanded, standards emerged as the new and modified products underwent stress testing and registered for UL certification. The premier bidirectional inverters now feature ever-lower noise levels, higher power capacities and split-second transition times from grid to microgrid.

FUTURE OF ENERGY STORAGE TECHNOLOGY

ESS hardware is becoming standardized and commoditized. Performance and safety will be prerequisites for hardware manufacturers’ survival, and they will become the standard, basic elements of every ESS system. ESS overall will become much more cost-effective for end users and will enable ubiquitous deployment of distributed ESS in every neighborhood. Prevalence of ESS technology will realize distributed generation. Advanced software and innovative customer relationships might completely alter the function of a utility so local generation can bid automatically on open markets as a dispatchable resource.

Utilities will have more control over the real-time use of grid infrastructure. More than ever, electric utilities are facing enormous challenges driven by rising cost and uncertainty in power generation and delivery, rising cost of replacing an increasingly fragile infrastructure, changing customer demands, and environmental pressures. A multitude of new technologies and vendors are begging for utilities’ attention, and it is a huge challenge to vet vendors in this era of unprecedented growth. During this experimentation, utilities should partner with their vendors so an open, two-way conversation continues to inform technology development. This is critical from technical and strategic perspectives because utilities and grid operators are the experts with universal understanding of the complex electric landscape. This will continue to get easier. After all, decisions about hardware infrastructure are much more permanent than decisions about software. As the infrastructure build out matures, the smart grid decision-making process for utilities will begin to focus increasingly on a set of software products and features that entail less risk and more flexibility for development.

John Jung is president and CEO of Greensmith Energy Management. He has more than 20 years of technology startup and strategy consulting experience. Prior to Greensmith, John held C-level roles at four venture capital-backed technology companies, including Pantellos, a business-to-business electronic marketplace serving 21 of the 25 largest North American electric utilities. Jung has an MBA from the University of Western Ontario.

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