Feature Article: How Can Customers Trade Energy With Batteries?
By Geoff James
When people buy batteries for their homes, they mainly expect to have more energy independence. But a sophisticated battery system can do more than providing secure backup power or soaking up the output of rooftop PV panels, as a rain tank catches rain.
Considering the whole electricity system, batteries can also resolve the variability of solar and wind energy paving the way towards a cleaner, greener grid. This is called “balancing the grid” and batteries are excellent at short-term balancing over seconds, minutes, and hours.
The best part? There is money to be made from it.
Markets that batteries can participate in
On local distribution networks, customer batteries can compensate changes in voltage and demand, keeping them safe and allowing more rooftop solar to be installed. The distribution network operator needs to know the batteries’ location and capacity in order to specify when and where help is needed. Batteries can earn revenue for helping through network support contracts.
Transmission grids need balancing to manage changing total load and generator output and availability. In many countries, electricity markets are used to obtain the least-cost generation to meet load, and customer batteries can trade in these markets to make a profit.
There is also special provision for contingencies, such as when a large generator or a major transmission line fails, and electricity markets pay generators or large electricity customers to be ready to respond within seconds to such situations. Because failures are rare, this usually means getting paid for doing nothing. Batteries perform better than generators in this market because they respond very accurately and do not need any fuel to remain switched on and ready.
So batteries participating in electricity markets are part of the mix of technologies that keep the grid running. This brings crucial revenue to help customers obtain good returns on their energy storage investment.
Technical means and business models
It is a new trend for customer resources like batteries to participate in network services and electricity markets.
Although long anticipated as a part of a democratic smart grid offering customer choice and participation, regulatory systems have to adapt to this possibility. Communications and control technologies will also need to access and aggregate large numbers of customers, and new business models have to be proven.
But some new companies are ready to go.
One such example is Geli’s Energy Operating System (EOS) that can support any size, type, and vendor of energy storage and power conversion. The plug-in-based software architecture can dispatch intermittent renewable energy, such as rooftop solar, and provide valuable services. In line with their philosophy of the Internet of Energy they can also integrate air conditioners and other customer resources.
Andrew Tanner, Geli’s Vice President of Business Development, will be speaking about their EOS at the Energy Storage World Forum in Rome this month.
Another example is Reposit Power’s storage trading and control platform which is focused on high-performance residential batteries. Through their early adopter program in Australia, customers can, for the first time, store their solar energy, manage their tariffs, and trade their batteries’ capacity in the electricity market –all coordinated to achieve the highest revenue.
Customers then receive trading benefits achieved by their batteries in the form of GridCredits that offset their electricity bills. This directly allows them to see how they’re helping to keep the grid balanced. Furthermore, GridCredits dramatically reduce the payback time for a typical residential installation.
As electricity markets and grid companies get more familiar with the quality of services they can receive from batteries, business models based on this idea will become commonplace – driven by demand from customers who, as early market research shows, really like the idea of trading with their batteries.
Sharing stories and sharing energy
People love exchanging stories and we can anticipate some of the excitement of being part of a growing new community of residential power stations. Taking a lead from social networking tools, it’s not hard to imagine the early adopters sharing information and enthusiasm, and technology stakeholders will be happy to support this with some good user-experience engineering.
From there, we can soon find customers trading stored energy with each other, guided by intelligent control software that prevents technically or financially disastrous results. They can form interest groups that might evolve into self-sustaining communities in which everybody invests in resources, such as batteries, rooftop solar energy, or discretionary load.
Efficiency benefits come from having a shared grid. It doesn’t even matter, from an energy point of view, whether these customers are located on the same local grid or minigrid, or are widely dispersed in an interconnected power system.
Although battery-enabled implementations of these ideas may not exist anywhere at scale, the technology and business structures they require are not far from the best customer-oriented energy storage programs, such as Geli’s and Reposit Power’s.
When they do arrive, they will almost certainly grow quickly driven by strong customer demand.
Dr Geoff James writes regularly for Dufresne Research and producers of the annual Energy Storage World Forum (Europe and Australia) where more than 30 Utilities/TSO/DSOs gather each year. He is a consultant in clean energy with 22 years of experience with CSIRO.
Contact him at firstname.lastname@example.org or join in our discussion at our LinkedIn Energy Storage World Forum group.
If you want to know more about this and other topics directly from end users of energy storage technologies join us at one of these annual events: The Energy Storage World Forum (Grid Scale Applications), or The Residential Energy Storage Forum, or one of our Training Courses.