Putting lots of batteries in people's backyards to manage the storage needs of the electricity grid may seem like a no-brainer.

But according to Sunil Cherian, CEO of Spirae, it's all about brains – brains on the grid, that is.

That's because thousands of batteries serving backup power purposes will have to be integrated in a way that keeps them from being more disruptive than helpful, Cherian said Thursday at the Smart Grid Innovation Symposium sponsored by Innovation Center Denmark in Menlo Park, Calif.

Cherian has experience with the conundrum, given that Spirae's business is in integrating distributed energy generation and storage projects, including a Department of Energy funded project called FortZED (for Fort Collins, Co. Zero Energy District) and another with Danish transmission system operator Energinet.dk.

"When you add ore and more of these distributed resources into the distribution network, you're changing the operating model" of the grid, he said. "As penetration increase, you really have to worry about how do you manage the system in such a way that these things don't interact with one another."

Take one of the first purposes to which such a storage network could be applied, and which utility experts at Thursday's symposium said was likely to be one of the first that makes commercial sense – frequency regulation (see GE Gives its Energy Storage Outline).

That's the job of keeping grid electricity flowing at a constant 60 hertz, or cycles per second. Such frequency regulation takes up as much as 1 percent of North America's power production, today almost entirely provided by fossil fuel-fired power plants kept running to respond to infrequent signals from grid operators – not the most efficient way to do it.

Flywheel maker Beacon Power Corp. (NSDQ: BCON) is doing projects with utility American Electric Power and grid operator ISO New England to provide those services (see Green Light post).

American Electric Power is discussing the potential for distributed storage to fit some of those needs, Cherian noted (see Utility to Try Backyard Storage).

While AEP hasn't specified what kind of storage devices it's looking at, several observers at Thursday's conference suggested depleted electric vehicle batteries – too worn down to stay in cars, but with enough oomph for grid storage – could be one solution.

Lithium-ion automotive battery maker A123 Systems is looking at the potential for such a shift, working in partnership with investor General Electric to develop grid storage systems for utilities (see A123 Batteries to Help Stabilize Electric Grid).

The trick with frequency regulation, however, is that it needs to be dispatchable in less than a second, Cherian said.

Now, that requirement in itself doesn't necessarily need communications systems with equal speed and reliability to serve the purpose, he noted. Storage devices could be designed to sense frequency fluctuations and respond accordingly.

The problem with that, of course, is that if all of them respond automatically at once, that will lead to a fluctuation in the opposite direction – thus making the problem worse, not better.

"That is the big problem that I don't think is fully appreciated today," he said.

Designing a workable distributed frequency regulation system will likely require a lot of clever combinations of communications, along with onboard controls that incorporate information about how many other batteries are on the grid, statistical models for how they will likely respond, and other hard-to-calculate variables, he said.

The same questions are sure to arise as more and more rooftop solar and other distributed generation systems come online, or as electric and plug-in hybrid vehicles present new demands – and new opportunities – for utilities and grid operators, he said.