AES Energy Storage is one of the world’s biggest grid energy storage project developers, with 150 megawatts of battery-based energy storage installed from the windy hills of West Virginia to Chile's Atacama desert. But that’s just a small part of the bigger business of parent company AES Corp., which has $42 billion in energy assets ranging from storage and renewable energy to good old natural gas and coal.
That makes measuring the current and future market value of batteries against all these alternative generation and grid-balancing assets something of a specialty for AES. On Tuesday, the Arlington, Va.-based company unveiled some details on a new software suite that capitalizes on all of its grid-scale battery management experience and broadens it to a whole new range of partners and customers.
Known as the AES Storage Operating System, or sOS, the new platform isn’t just for anyone -- it’s being deployed strictly as part of the company’s ongoing and new deployments with customers, Chris Shelton, AES Energy Storage president, said in an interview. But it does represent a new level of openness, allowing customers to combine different batteries and inverters that meet certain common industry standards, or expand projects via the same common software platform, he said.
AES’s new sOS platform isn’t the first to address the nexus between energy storage and energy markets, of course. Pilot projects around the globe are testing the multiple value propositions to be derived from storage, either as a standalone resource or linked to renewable power, plug-in vehicles or customer premises.
As for how those batteries are tied into the grid, it’s all over the map. We’ve got battery vendors such as Xtreme Power and A123 offering their own grid integration and operation platforms, along with grid vendors such as ABB, S&C Electric, Schneider Electric, Siemens, GE and Toshiba offering grid-tied solutions. In the meantime, startups like Viridity Energy, Enbala, Stem, GELI, Greensmith and many others are promising technology that ties grid operations, energy prices, market opportunities and other such data points into the grid energy storage equation.
AES, for its part, doesn’t make batteries and inverters, but it has been working on storage for more than five years now, “doing that in the realm of the power industry and the utility industry,” he said. As for the sOS platform, it underlies many of AES’ current projects, he said, including its biggest, a 32-megawatt battery array at its Laurel Mountain wind farm in West Virginia. Here’s a look under the hood.
Market Modules for Maximize Storage’s Value
Throughout the past half-decade in the energy storage business, “Behind the scenes, we had this storage operating system we had developed. [...] It’s kind of the brains that operate those projects, and makes a lot of decision-making tradeoffs,” Shelton said.
Those tradeoffs are myriad and diverse, with a lot of variables to consider, he said. From day to day, there are multiple ways to run (or not run) assets that pay for themselves; some of them mutually exclusive. At the same time, how hard and how often you use your batteries today will affect their performance and lifespan, a critical consideration for systems that are supposed to last decades.
To add to the complexity, “It’s market- and contract-specific -- the way this thing works in PJM differs from how it works in New York, or Puerto Rico, or Chile,” he said. Each one has its own rules for participants, its own day-ahead, hour-ahead and real-time markets, and its own set of potential financial outcomes based on how the system is used.
To meet those market needs, the sOS platform comes with modules that tie the customer’s suite of energy storage assets to all the different programs, prices, communications channels and response and verification regimes required by individual grid operators. Right now, sOS has modules for NYISO in New York, ERCOT in Texas, and Puerto Rico markets as mid-Atlantic grid operator PJM -- but the company is fast developing other modules for markets elsewhere in the United States and abroad, Shelton said.
A Multi-Vendor, Battery-Agnostic Approach
AES customers who use sOS also aren’t tied to any particular battery technology or vendor, he said. In fact, the platform can tie into existing storage assets like lead-acid batteries, as well as whichever technologies the customers choose for their new deployments, he said.
So far, AES Energy Storage has worked mainly with A123 for its big battery-backed energy storage projects, though it chose Mitsubishi-GS Yuasa for its most recent, 20-megawatt project in Chile. That may have been because A123 was going bankrupt and being bought by China’s Wanxiang at the time, but it indicates an openness to multiple battery vendors that the new sOS platform explicitly opens to other standards-based batteries, as well as batteries yet to come.
To date, most battery-based storage projects have either been designed around vendor-specific technology to meet one project’s specific market needs, or built on more generic systems designed for power plant operators and other grid systems that aren’t much like batteries, Shelton said. Either way, they will likely require integration work to add new components or features.
With sOS, “Since it’s technology-agnostic, it’s not an integration play; it’s a standards play,” he explained. That, in turn, should drive down costs dramatically to do things like add new batteries to existing storage facilities, or tie multiple storage systems together for better market efficacy, he said. Shelton estimated that sOS could drive a 10 percent reduction in new energy storage project costs compared to a less-integrated approach, and a whopping 30 percent to 40 percent reduction in the costs of adding, altering or tying together new storage projects to the core platform, compared to integrating each new change from scratch.
At the same time, AES has built some of its patented IP into the sOS platform, including a technology for making batteries and inverters mimic the action of spinning loads like power turbines in regulating grid frequency, he said. Batteries and inverters can also do a lot of things that spinning loads can’t do, such as provide reactive power support, or switch from off to 100 percent power in a matter of seconds, he noted.
AES doesn’t disclose financial details of its energy storage projects, so we’ll have to wait to see just how the benefits of AES’ new sOS platform translate to expanding markets or new customer wins. In the still-nascent grid energy storage market, however, anything that can drive down costs and lower the barriers to entry for vendors and customers alike is good news for the industry as a whole. Stay tuned for more along these lines, as batteries and the grid find more ways to make nice together.