Strategen Consulting, with the Global Energy Storage Alliance (GESA), has authored a whitepaper to guide utilities seeking to procure energy storage for balancing power supply and demand.
The document, titled A Framework for Utility Procurement of Energy Storage: Lessons Learned from Leading Utilities, is aimed at utility representatives, policymakers, regulators and energy storage developers.
The whitepaper sets out an energy procurement framework based on five phases. They are: needs assessment and request for offers (RFO) design, bid evaluation and selection, contracting, regulatory approval and operations, which covers the actual development of a project through to its ongoing operations, even as rules and conditions change.
According to the whitepaper this framework, which is covered in more detail in the document, is easily adaptable to most grid needs and can accommodate a variety of ownership or business models, including utility ownership considerations.
“The process starts with a direct focus on the problem that must be solved. Without this critical first step, it is difficult to evaluate and determine where, how, and which energy storage solutions are the most competitive best-fit resource,” advise the authors.
The document opens with an overview of different energy storage technologies and markets, breaking down customer sited, distribution sited and transmission site locations for energy storage. Location on the grid domain will have an impact on what value streams the asset can capture when providing those desired services, as well as regulatory and business model considerations.
For instance, the service applications applicable to transmission services, are primarily voltage support, transmission asset deferral and congestion relief. Those for customer services include time-of-use rate arbitrage, optimising solar PV self-consumption, demand response, demand charge management and back up.
Successful storage solicitations
The whitepaper compiles a list of notable successful energy storage solicitations in the US and overseas, some of which have been driven by state-level targets, while in other cases utilities have procured storage without regulatory or legislative incitement in order to meet critical grid needs, such as local capacity or renewables integration.
In addition to those by utilities in California, including Southern California Edison – which has procured more storage capacity than any other utility – Ontario and South Australia’s solicitations are also included.
Evaluating the cost-effectiveness of energy storage resources is challenging, because many of the cost and revenue values are projected and subject to some uncertainty.
“The multiple value streams and ‘stacked services’ that energy storage solutions allow can also be hard to estimate. These services may cross utility business departments, and deliverability of stacked services is sometimes unclear and contingent on system conditions and needs,” according to the publication.
The white paper can be downloaded at www.strategen.com/reports-1/2017/10/3/a-framework-for-utility-procurement-of-energy-storage-lessons-learned-from-leading-utilities.