Arizona Public Service is advancing a study on how to manage rooftop solar production in congested areas of the electrical grid with the deployment of two 2-megawatt batteries from AES Energy Storage.

The batteries are being installed as part of the Solar Partner Program (SPP), a pilot project currently made up of 1,600 utility-owned home solar projects coupled with smart inverters. Arizona Public Service (APS) has spent the past year signing up solar customers, deploying technology and testing the ability to manage distributed energy resources from a single central utility control system.

With the systems now up and running, APS is testing various smart inverter functions to evaluate how distributed solar can be integrated at high levels without compromising grid reliability. Initial findings show that solar projects can provide some level of capacity relief.

In this next phase of the pilot, APS will conduct similar studies with AES’ Advancion energy storage units. Once construction is complete, the utility will test how the batteries charge and discharge, and how they can be used to manage peak demand. APS will also examine features like voltage regulation and power quality improvement, as well as how well the batteries provide spinning reserves.

The two lithium-ion batteries will be installed in different locations on separate feeders -- one in a substation at the head of the feeder and one in the middle of the feeder -- in order to collect data on how each battery’s location affects its capabilities. APS will test how well the batteries interact with traditional devices like capacitor banks and tap changers. The utility will also test how battery functions compare to smart inverter capabilities, and evaluate how each technology is adding to overall feeder reliability.

“Looking across the industry, we’ve seen a lot of [entities] installing storage for capacity reasons,” said Scott Bordenkircher, APS’ director of technology innovation. “What we’re not seeing -- and I think we’re the first in doing -- is a test this comprehensive.”

“The interesting thing for us is the opportunity to look at interoperability and how various technologies interact together, and compare and contrast what battery systems can do in areas of high solar production,” he added.

What value can you prove?

The SPP deployment is the first Arizona-based project for AES, which has been building grid-scale energy storage systems since 2008. The Advancion platform launched in 2014, and was opened up to third-party ownership last year. The APS project is one of the first utility-owned Advancion battery storage arrays to date.

“AES has been keenly focused on making the business case for energy storage applications and the project we’ve built,” said Kate McGinnis, Western U.S. market director at AES Energy Storage. “As we move to third-party sales, it’s extremely important that we find those business cases with our customers.”

Like many others in the electricity industry, APS is interested in quantifying the multiple value streams that energy storage can provide. The SPP battery project is all about “what value we're able to prove, because that answer will determine the appropriate expenditure and placement for batteries in the future,” said Bordenkircher.

“Also, this informs the policy perspective on energy storage,” he said. “We hear a lot about how storage is the golden coupling for renewables to smooth out production capability when the sun’s not shining at night. Logically, that makes sense. This study allows us to have empirical data, and I think that’s key for the industry moving forward.”

As the costs of energy storage have come down, new applications for the technology have opened up, said McGinnis. Because of Advancion's modular design, it can be sized up or down to suit a variety of use cases, she said.

In West Virginia, for instance, AES developed a 32-megawatt/8-megawatt-hour storage project at the Laurel Mountain wind power plant that enables the project to provide frequency regulation services to the PJM market, adding more revenue and operating capability. Deploying energy storage on the distribution grid to support distributed energy resources is a new application for AES, and a new opportunity, said McGinnis.

“What we think is special about this application is the opportunity to work with APS on really taking a forward-looking view of where the future of their grid is and how to integrate increasing solar penetration,” she said.

Part of a larger plan

According to Marc Romito, director of customer technology at APS, the AES battery project is just one part of a broader investigation into how APS can improve resource management on the distribution grid. The aim of the SPP has been to deploy rooftop solar, smart inverters and large-scale energy storage, as well as to develop communications protocols and centralized utility control for all of those resources. Phase 2 involves developing interoperability between distributed energy resources at the residential scale -- including rooftop solar, load controllers, HVAC systems and home energy storage -- under a smaller pilot called the Solar Innovation Study.

The third phase, which APS filed for earlier this month, is a $4 million proposal to look at how residential-scale batteries, intermediate-scale batteries in the 100-kilowatt size range, and thermal energy storage can help reduce peak system load.

Once all three programs are deployed, “We can compare and contrast small batteries, intermediate batteries and large batteries, [plus] HVAC control and water interactive control, just to see which one works the best,” said Romito, in an interview at GTM's Energy Storage Summit.

While a lot of attention is paid to chemical energy storage solutions, Romito said he’s most excited about the potential to curb peak demand and address the duck curve with hot water heaters.

“It’s something nobody talks about, and it's one of the most cost-effective ways to manage load and not impact anybody,” he said. “You can give people bill savings, and all you have to do is shift the time when their water heaters turn on and off.”

“That allows you to fill the belly of the duck, because nobody really cares when their water heater is charging, just that it’s hot when they need it, and the answer is, yeah, it will be,” he added. “You can even solve some localized distribution level issues just by adding load, which is what that will do in the middle of the day.”

A quarter of the latest $4 million energy storage proposal is dedicated to grid-interactive water heating, said Romito. That proposal is now subject to regulatory review. Construction on the two AES batteries began in November, and they are expected to come on-line in early 2017.