Regulating load demand and improving resilience with behind-the-meter Battery Energy Storage Systems

Regulating load demand and improving resilience with behind-the-meter Battery Energy Storage Systems
By Soheb Zaidi and Drew Durkee
Jan 25, 2023
Behind-the-meter (BTM) storage assets pave the way forward for monetary customer and utility savings.

As electrification continues to put increasing load demand on the grid, utilities across the country seek out a number of demand response (DR) programs to address overall resiliency. Among such program options, BTM storage assets provide utilities the ability to address peak reduction, improve resiliency, and save money while future-proofing against DR events.

BTM Battery Energy Storage Systems (BESS) allow utility customers to connect to their energy distribution system via a utility service meter. As such, they can act as both a load center while charging and a generation asset (e.g., supporting voltage and displacing load) while also discharging—ultimately leveraging storage for grid resiliency.

To better understand such possibilities, our pilot project and analysis—conducted in partnership with a utility—uncovered significant cost-benefit savings as a result of BTM BESS, setting the stage for future widespread adoption at a larger scale. By enabling and understanding the interaction between customers and BESS, utilities of all sizes can prepare for future energy landscapes by leveraging the potential of BTM BESS as one strategy to manage and aggregate BTM generation and load.

Pilot project highlights BTM BESS possibilities and benefits

While customers often lack information about the benefits of BTM BESS, investigative projects across the country provide insights into the cost-benefit analyses for adoption. While working with a gas and electric utility, our team of experts performed an economic analysis to understand and quantify differing values, benefits, and costs associated with controlling BTM assets. As part of this pilot program, the utility modeled BTM BESS battery banks for customers with existing on-site solar in an attempt to provide resiliency to the customers and support to the grid.

The figure below illustrates the utility peak reduction in megawatts (MW) from high and low PV among four customer groupings, where the adoption rate is 5% —approximately 80,000 residential customers within the utility territory, having the same type of system installed on their premises. Our analysis concluded such a program can result in an overall utility peak reduction of 10.11% in terms of megawatts. We found that introducing BTM solar and storage can help normalize and minimize peak demand as higher adoption rates occur in a given utility territory.

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Aligning customer load shape with peak demand helped identify the most ideal type of customers for the pilot program. With those customers, resiliency tests conducted on battery storage systems showed that batteries can provide load demand (kWh) 50% of the time in a year and peak demand (kW) for 95% of the time in a year, during normal days with no called DR events or power outages. PV systems paired with battery storage can also net-meter after supplying loads, and they can charge the battery to the programmed state of charge. The bar graphs below display the benefits realized by oversizing the PV system by 25% in a PV+ storage system for utilities and residential customers participating in DR programs. The program design included monthly payments from the customers to keep the BTM battery systems on premise. The graphs below describe the different monthly payment rate benefits to the customers and the utility along with different sizes of paired solar on premise.

Snapback relief provides additional BTM BESS benefits on the grid

When a sudden load burden on the grid occurs after a DR event, utilities often face a snapback effect when customers return to normal usage after having curtailed access. The impact of snapback on the utility grid can be minimized using BTM storage. For customers, the BTM storage may not be fully utilized during the DR event, which can help in normalizing spike in load during snapback period. This snapback reduction after a DR event by utilizing spare battery capacity can prove beneficial in reduction of sudden load demand on the grid. Scaling BTM BESS can collaboratively reduce the impact of snapback in the utility territory and at the same time prevent unnecessary transmission and distribution upgrades.

A pathway for improving grid resiliency, BTM BESS still requires consumer education

As exemplified by snapback situations, BTM BESS have the potential to provide a path for improving the overall grid resiliency. As electrification increases, combined with continued natural disasters and power outages, battery system assets at scale can provide an extended layer of support for the grid. Batteries participating in DR programs can enhance the possibility of virtual power plants, providing more backup power for customers while simultaneously providing load relief during peak times. This also helps ancillary services such as frequency and voltage control on the grid.

By first educating customers on the individual benefits of battery storage—including monetary savings and switchback resiliency—utilities can encourage buy-in and adoption.

Though the monetary benefits for both customers and utilities are clear, BTM BESS adoption still requires considerable customer education to deliver on the promise of its large-scale impact. Customers are the vital interface through which such assets must be distributed. Without their adoption, large-scale BTM BESS will lag. By first educating customers on the individual benefits of battery storage—including monetary savings and switchback resiliency—utilities can encourage buy-in and adoption. As some customers may be hesitant about the initial costs of batteries, utilities have the opportunity to work with customers to participate in extensive savings programs. As customers gain more and clearer insight into how battery system assets can save them money over time while also participating in overall load relief, their curiosity has the potential to transform into enthusiastic participation.

Finding the right partner in the face of increasing demand

Increasing electrification is a top concern among utilities. For residents and utilities in California, wildfires and natural disasters increase the number of emergency response events, putting pressure on the public to reduce electricity use to prevent power outages. The urgency for increasing power and reducing load during peak times requires immediate solutions, one of which can be found in BTM BESS. For the MISO service territory in the Midwest, summer capacity shortages are projected starting in 2023 and 2024 without more generation, creating a similar need for balance of increased generation or consumer load reduction in the short-term future. And on the east coast, increasing electrification may bring similar challenges for the colder winter months in the medium future.

With these trends, the need to create future-proof solutions continues to increase in urgency. Creating a plan for implementing BTM BESS now can help prepare utilities of all sizes for addressing and improving grid reliability—while saving money—in the coming years. Working with the right partner ensures that utilities stay ahead of the curve and are ready for new challenges. Our team of experts can help utilities of any size understand the economic feasibility of battery implementation and benefits for energy savings and targeting economic analysis.

Meet the authors
  1. Soheb Zaidi, Energy Analytics Consultant
  2. Drew Durkee, Senior Manager, Energy Markets Analytics