Navigant Research Blog

Public Power + Solar PV + Batteries = Win-Win

Peter Asmus — March 10, 2016

Solar heater for green energyThe stars are aligning for distributed energy resources (DER) to play an increasingly important role in providing energy services to consumers. Some see this growth in capacity (coming from devices such as solar PV panels, fuel cells, advanced batteries, and other forms of DER) as the supreme threat to incumbent distribution utilities, echoing the much ballyhooed “utility death spiral” storyline. Others see this evolution as an opportunity for utilities to reinvent themselves, aligning their business strategies and business models with the emerging digital economy.

While it is going to be a bumpy ride into the future, there are signs that it is possible to create win-win scenarios by leveraging the diverse services that energy storage can provide. Advances in software that can optimize DER to provide bidirectional value, along with the bridging capabilities that energy storage brings to the market, can create order out of what would otherwise be chaos.

Is there a way for everyone to come out as winners? The key is in intelligent distribution networks, an ecosystem of solutions that spans concepts such as nanogrids, microgrids, and virtual power plants (VPPs). These three platforms were described in a previous blog. Two companies are proving that the boundaries between these three unique market applications are blurring, thanks to innovative utility business models and the creative aggregation and optimization possibilities attached to energy storage.

Winners

PowerStream, the second-largest municipally owned utility in Ontario, Canada, is developing an innovative pilot project that involves 20 residential units, each to be equipped with a 5 kW solar PV array and a 6.8 kW/12 kWh lithium ion battery. The project is designed to enroll homes in select feeders (which may not be adjacent to each other) in order to provide system benefits.

Perhaps the most innovative aspect of the project is the business model dubbed DBOOME (design, build, own, operate, maintain, and energize). Customers have an opportunity to participate in a hassle-free, zero-maintenance solar storage program with an upfront cost to partially cover installation, followed by a nominal monthly service fee for a 5-year program (this DBOOME approach is also the model PowerStream plans to deploy for its microgrid program). In exchange for the customer’s upfront payment and ongoing service fee, PowerStream offers customers significantly reduced electricity bills and resilience.

The key vendor partnering with PowerStream is Sunverge, which provides residential and commercial building-sited energy storage solutions that integrate renewables such as solar PV. Sunverge offers a combination of onsite hardware and cloud-based services that enable remote monitoring and control of nanogrids, aggregating them into VPPs. Sunverge has also partnered with the Sacramento Municipal Utility District, a municipal utility that is using the company’s systems in 34 homes as part of its net zero energy demonstration project. A net zero energy home is one in which a home’s total annual energy use is approximately equal to the amount of renewable energy generated onsite. Each home is a nanogrid located on a single city block that can also island as a microgrid. Sunverge’s business model essentially links the concept of nanogrids to a VPP. All of its systems can be controlled remotely from a central control room and capacity can be offered to distribution grid system operators.

To learn more about how public power utilities and energy storage innovators are forging win-win DER solutions, listen to the Navigant Research Utility-Energy Storage Collaborations webinar on Tuesday, March 15 at 2:00 p.m. EDT.

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