The future for grid-scale energystoragestartups isn’t in building the batteries that go into them; it’s in writing the software that makes them work at scale.
San Francisco-based Greensmith and Berlin-based Younicos were both founded on this premise, and so far it seems to be working for them. In the past half-decade or so, the two startups have stacked up tens of megawatts of projects, a healthy if not overwhelming market share compared to fleet-holders like AES Energy Storage, or big battery vendors like Panasonic or A123 Systems (now part of Japan’s NEC).
Both work with a variety of battery chemistries from different vendors, as well as multiple inverters and power electronics partners -- so far with no reports of problems. To understand just how important that clean track record is, consider Xtreme Power, the battery startup that went bankrupt after a 2011 fire destroyed its 10-megawatt Hawaii project -- and market confidence in its product.
Greensmith and Younicos have in the meantime been stacking up projects using their software, without the financial burden of building and maintaining the batteries themselves. Indeed, Younicos bought Xtreme in April, picking up its 60-plus megawatts of working projects and gaining a foothold in the U.S. energy storage market.
Both have also grown with the energy storage industry, starting out as partners for individual projects, and building the underlying software platform and integration partnerships along the way. Eventually, both aim to reach “operating system” status for a set of mass-market energy storage resources, extending from grid operations centers and control rooms to the edges of the grid.
In today’s one-off, pilot project-dominated grid battery landscape, it's hard to recognize the value of a scalable software platform for lots of grid batteries. But as the energy storage market booms in the coming years, there's opportunity for the right platform, or combination of platforms, to really take hold. That makes it worth parsing out just how contenders to this market such as Greensmith and Younicos, as well as rival startups like GELI and 1Energy, approach the challenge. Here's a quick look.
Building the platform for mass-market grid storage
“At heart, we’re a software company,” Andy Tang, Greensmith’s new senior vice president of business development, said in an interview last week. “Having said that, this industry is so new, our business model has evolved to everything from just the software to full turnkey.”
Since its 2006 founding, Greensmith has deployed 30 battery energy systems for nineteen different customers, nine of them utilities, and is aiming for 23 megawatts of systems under management by year’s end. These include several megawatts of lithium-ion substation batteries for San Diego Gas & Electric, and work with Sacramento Municipal Utility District (SMUD) to get its grid battery project working smoothly, he said.
While many of its projects are utility-owned and operated as capital assets -- that is, paid for by rate increases -- Greensmith is also doing big commercial projects bidding into energy markets. That includes a 20-megawatt, 9-megawatt-hour project in Illinois that’s providing frequency regulation for mid-Atlantic grid operator PJM for an unnamed partner. Greensmith is also providing its software to New York-based Green Charge Networks, and is linking solar PV and electric vehicle charging in Hawaii, CEO John Jung told me in an interview this spring.
The key role Greensmith plays in these transactions is its breadth of expertise, Tang said. “We already work with eight battery manufacturers, and by the end of this year, we’ll have worked with twelve. […] We’ve worked with six different PCS [power control system] vendors, inverter vendors. Our system has been built to snap in place with any battery and any inverter.”
Greensmith integrates with the core battery thermal and electrical management software and provides the overall fleet management, as well as the interfaces with the third-party energy market or distribution grid management software that’s issuing commands and verifying the results. “We’re focused on what needs to happen to make money as a storage system,” he said. “It’s fundamentally an optimization problem. You model the characteristics of how the battery performs, which we’ve done with our partners, at various temperatures and at [different] depth of discharges. Then you need the market size of the equation, and then you bring in models around the weather and other variables, so you can do some probabilistic forecasting.”
Solar integration is a new but growing focus, Tang added. Greensmith is working with one renewable power project developer building batteries into its RFP for a solar farm, with the aim of firming output and providing grid stability as the value to offset the additional cost. Puerto Rico has mandated storage for new solar and wind projects, and Hawaii is seeking up to 200 megawatts of storage to help its renewables-soaked island grids manage the ups and downs of sun and wind power.
Tying batteries to the wind and sun
Younicos was founded in 2008 by German solar executives who saw the need to turn solar and wind from intermittent to reliable grid resources. Since then, it’s seen Germany’s energy markets turned upside-down by its green power revolution, more or less proving out its diagnosis of the problem.
As a solution, Younicos has developed software to manage batteries either in “island” mode as backup for remote diesel generator-powered grids, or in grid-tied mode to balance and buffer locally generated solar and wind power. In either case, it maintains real-time connection with its fleet of batteries to guarantee availability and response, all while monitoring near-term and lifetime cost-effectiveness, spokesperson Philip Hiersemenzel said in an interview last month.
“First, it ensures the battery is used in an optimal way, that it provides the service that is most critically needed,” he said. Some of that value may come upfront, as in the case of capital deferral, as a battery that buffers an overloaded feeder line or substation at peak could defer many millions of dollars more in reconductoring or retrofit costs. Others require integration and day-to-day interaction with the grid, whether it’s for frequency regulation, renewables smoothing, peak load shifting, capacity firming or other mechanisms.
“The second thing our software does is guarantee availability” to the grid’s needs, and “the third thing we do is really optimize lifetime. It’s terribly important for battery lifetime, for instance, that cells are equally calibrated -- that you don’t use one part of the battery more than the other part. And you want to keep the battery within its ‘feel-good' zones, to maximize functionality and availability.”
Like Greensmith, Younicos works with multiple battery partners, including lithium-ion batteries from Samsung for its 1-megawatt battery park modules that link solar panels, electric vehicle chargers and frequency regulation service. It’s also deep into longer-term energy storage, using sodium-sulfur batteries in Berlin and on the island of Graciosa in the Azores, and deploying CellCube vanadium-redox flow batteries from Germany’s Gildemeister.
“For us, the question is what the business models are,” he said. “Yes, we believe in renewables -- but our mission is to really make renewables competitive.”