What does the network of the future look like? This question has sparked a lot of discussion and debate lately, but the answer is really simple. After all, the digital spirit has been out of the bottle for several decades and the technological building blocks have determined the future network. Of course, the hardware looks about the same as always, and some quasi-experts think that's old-fashioned, but looks can be deceptive. There's an old saying about judging a book by its cover.
Modern transmission devices can monitor themselves and generate data that is stored in the cloud. Through cloud-based computing in conjunction with highly developed software programs, it is possible to identify trends, predict the condition of components and avoid device failures. Despite all of these possibilities, there is one area that requires attention.
Recently, the ASCE (American Society of Civil Engineers) 2021 Infrastructure Report Card published its report on infrastructure in the United States. The energy report is of particular interest to our industry. The report states, “The distribution network accounts for 92% of all interruptions in electricity services.” The report goes on to say, “The” last mile “of the electricity network has grown 54% over the past two decades.”
From the edge
The reasons for the service interruption are many, but whatever the cause Interruptions will not be tolerated. As a result, the Behind-the-Meter (BTM) segment is leading the way with some powerful technologies coming from the edge of the web. Customers are installing distributed energy resource (DER) technologies in unprecedented numbers and much faster than anyone could have predicted.
A 2020 report by Wood Mackenzie confirms this statement: “Cumulative DER investments in the US will dwarf $ 110.4 billion, or about 387 gigawatts, between 2020 and 2025.” BTM DER supporters see in the expansion of the technology was the decisive factor in reducing the 92% interruptions in the distribution system.
When the benefits of DER are listed, the improved robustness and resilience are usually at the top of the list. But this rapid growth of BTM has preoccupied some groups with the proliferation of DER systems. Some predict hundreds of millions of DER installations in the not too distant future. Electricity professionals are concerned about how network operators can control and manage them without putting the grid at risk.
It is fortunate that vendors like Enbala Power Networks, EnergyHub, GE, Hitachi ABB Power Grids, Oracle, Siemens, Schneider Electric and others have developed sophisticated distributed energy resource management systems (DERMS) using artificial intelligence, cloud-based computing and cutting-edge technology Software to intervene where people would be at a loss, but that is not the issue.
The important question is how will DER technologies reach this level? Well, it has already started with thousands of megawatts (MW) photovoltaic (PV) on rooftops around the world. PV is the leading DER application, but BTM battery storage systems (BESS) are on the rise, especially when solar + storage is considered.
Remove speed bumps
DER technologies provide complementary services with a value stream and this is fueling growth driven by regulatory support. This high volume has been denied access to the marketplace for years. Some DER advocates say these services (i.e. peak shaving, voltage regulation, frequency support, backup, stability, etc.) have been overlooked while others say they have been ignored.
The change began in 2018 when the Federal Energy Regulatory Commission (FERC) issued Regulation 841. It opened the wholesale energy markets for energy storage. In principle, energy storage was allowed to provide auxiliary services in regional transmission organizations (RTO) and independent network operators (ISO) in the wholesale and capacity markets for energy and capacity, but that was not the end of FERC's advance.
Last year, FERC enacted Regulation 2222, which removed barriers to the aggregation of DERs. It enabled aggregators to pool assets such as electricity storage, intermittent generation, demand response and thermal storage in order to participate in regionally organized electricity wholesale markets. RTOs and ISOs have been instructed to enable DER aggregators to sell additional services in all regionally organized electrical wholesale markets.
A short time later, FERC issued Order 2222-A to fill an important loophole. To keep it simple: if a state did not allow network operators to accept offers for aggregated resources prior to Regulation 2222-A, the network operator made use of an opt-out option for the transaction. With Order 2222-A, the opt-out option is no longer available and network operators can accept these additional resources.
Aquire new markets
These FERC missions provide much-needed regulatory support, but they also add monetary value to DER's ancillary services. FERC opened the marketplace to DERs like never before, and it did so at an ideal time. Technologies are experiencing a benevolent perfect storm. DER technologies have matured, become more user-friendly, have been combined with other applications and their prices have steadily fallen into affordable zones.
Rooftop solar is a good example. The typical costs for PV modules are falling continuously and the nominal power of the modules is increasing. A Department of Energy (DOE) website reported that average prices so far in 2021 have been between $ 2.40 / watt and $ 3.22 / watt. DOE also pointed out that improving technology will help convince buyers to spend the money. The typical panel output ranges from 400 watts to over 600 watts per panel. One manufacturer stated that its panels generate 800 watts per panel.
Energy storage is also benefiting from falling prices and increasing capacities. According to the 2020 report from Bloomberg New Energy Finance (BNEF), the average price for a lithium-ion battery has fallen to around $ 137 / kilowatt hour (kWh) in 2020. BNEF expects the price to be below 100 USD / kWh by the year 2023. This price comes with some reservations that BNEF said, such as: For example, the scope of the project determines the price, but even at $ 150 / kWh to $ 170 / kWh, more buyers will be willing to spend the money on the BESS.
Electric vehicles (EVs) offer additional services with the Vehicle-to-Grid (V2G) application. Electric vehicles are enjoying increasing popularity around the world and the polls will only increase over the next five years. The V2G application recognizes that these mobile batteries can provide network auxiliary services when connected to charging systems.
Think smaller on a larger scale
With the award of the three orders from FERC, the BTM DER aggregation projects have received a considerable boost. Press releases (PRs) have increased as utilities and aggregators announce new projects offering these services. With a cash flow, these applications become valuable assets. An aggregated network of independent BTM DER devices can be very valuable to utilities, RTOs and ISOs.
However, they bring a new level of complexity in order to safely control the interaction of the aggregation with the daily operation of the network. It's manageable as modern software and powerful cloud-based computing address these issues. Let's look at some of the projects that are producing interesting results.
An apartment complex in Herriman, Utah, was recently completed on a grid basis with some unique features. It has 600 apartments and each has a solar lithium iron phosphate ecoLinx battery. The total capacity of the complex is 5 MW with 12.6 megawatt hours of energy. The batteries are charged by 5 MW PV on the roof. Each of the homes are aggregated and managed by Rocky Mountain Power to provide backup power, meet peak demand, and provide a source of income for owners.
A recent PR reported that Con Edison and Swell Energy are collaborating on a 500-kilowatt wireless project to reduce demand in the Queens area of New York City. They will retrofit Tesla Powerwall batteries in 300 homes with existing solar panels to create an aggregated DER network.
Another PR reported that San Diego Gas & Electric (SDG&E) had launched a five-year V2G pilot program with the Cajon Valley Union School District. SDG&E said six Lions electric school buses will be plugged into 60kW bidirectional DC fast chargers. The buses will feed energy into the grid during peak load times. The V2G technology used in the pilot is being developed by a San Diego-based company called Nuvve. “We need a resilient network,” said Marc Trahand, Nuvve's Executive Vice President of Marketing. “This enables the use of renewable energies in maximum capacity.”
The size and complexity of our network with all its shortcomings and weaknesses is interesting make us think smaller on a larger scale. The aggregation and control of a large number of small ancillary services from BTM-DER applications is the inspiration for the increasingly popular virtual power plant (VPP).
The VPP scheme gathers a network of independent DER systems, provides a cloud-based control system, and makes them function like a traditional generation resource. If the aggregation experts are right, our future network may be moving towards a nontraditional approach like these wireless alternatives. The trend is towards the further development of technology and aggregated additional services bring the future one step closer!