Spring Cleaning: Organizing the Impacts within the Behind-the-Meter Energy Storage Closet

Electric utilities are increasingly promoting and adopting distributed energy technologies as an opportunity to modernize the electric grid and deliver a more efficient, reliable and flexible supply of electricity services. Behind-the-meter (BTM) advanced energy storage (AES) has become a key component of that modernization. Successes in program design, marketing, cost reductions and perceptions of societal benefits for both economic and environmental reasons have increased the penetration of AES technologies throughout California. These successes have been spurred by the unique and fundamental nature of AES as an electric supply source. AES technologies can obviate the need to instantaneously match electricity generation with demand. Customers can benefit by discharging to service load during periods when retail energy or demand rates are high and charge when rates are lower. Utilities can benefit by assuaging peak demand issues if storage is dispatched during periods of increased demand and charges during periods of excess power generation.

Veiled behind a meter, it can be difficult to understand how AES systems are being operated by customers, quantify the potential benefits of storage performance or determine how these systems can change operations on the grid. Itron’s Strategic Analytics group has a unique perspective in this regard. For the past decade, our team has been evaluating the impacts of the Self-Generation Incentive Program (SGIP) in California.

The SGIP was established in 2001 to help address peak electricity problems in California. Since its inception, the SGIP has provided incentives to a variety of distributed energy technologies including fuel cells, wind turbines, combined heat and power (CHP) and solar photovoltaic (PV). More recently, standalone AES projects – in addition to those paired with SGIP eligible technologies or PV – were made eligible for incentives.

The SGIP has three overarching goals at it relates to storage; 1) to reduce greenhouse gases, 2) to provide grid and customer support, and 3) to support market transformation. In 2018, our team conducted an impact evaluation to assess the ability of SGIP storage projects to satisfy those goals and provide customer, utility and environmental benefits. The evaluation examined how SGIP residential and nonresidential participants utilize these systems and the types of benefits realized from the system performance, along with how these systems are changing the operations on the grid.

Our team is presenting the results of that evaluation at the International Energy Program Evaluation Conference (IEPEC) in Denver next week. The multi-faceted evaluation included quantification of observed program-level impacts and storage optimization modeling. The evaluation examined the relationships between customer retail rates, utility marginal costs and storage dispatch behavior to better understand how utilities can maximize the benefits of BTM energy storage.

We hope to see you next week and discuss our findings with you in person!