Behind-the-metersolarand energy storage systems are hitting the grid at a breakneck pace. But will they be efficiently managed and monetized?

With flexibility management software, they can.

“Utilities recognize that there will be a large increase in behind-the-meter storage and PV over time, and electric vehicles as well,” said Quique Schwarz, chief data scientist at AutoGrid, a software company that helps utilities aggregate, optimize, and control distributed energy resources in real time.

“But without a flexibility management platform that can extract value from aggregated portfolios of diverse DERs, the individual assets that are out there are going to be underutilized," said Schwarz.

Case in point: Schwarz recently spoke to an industrial customer looking to replace on-site diesel generators with battery storage. While the battery could meet the company’s backup power requirements, oversizing the batteries to provide capacity and additional grid services to the local utility was even more economically compelling.

“It provides a resource for the utility in the form of targeted flexible capacity, while at the same time lowering the customer’s demand and energy charges, and increasing solar self-consumption. To me, that is a win-win for utilities and their C&I customers,” said Schwarz.

Flexibility management software is the reason this dual use case exists. It changes the paradigm, allowing customers and utilities to collectively benefit from distributed resources. 

Here are five ways flexibility management software makes this possible.

Empowering customers

As utilities try to better understand their customers, the combination of storage, solar and flexibility management software has become a powerful tool for increasing engagement and satisfaction.

For example, AutoGrid’s software is being used with a megawatt-sized microgrid at an office park that utilizes solar and storage for onsite backup and broader grid services.

“The utility is using our software to dispatch that system to alleviate system peaks -- standard demand response,” said Adam Todorski, senior director of product technology at AutoGrid. “That is a benefit to the utility, but the customer is compensated for participating in the DR program. It also keeps customers happy in the long run as it supports grid reliability and lowers overall energy prices in the service territory.”

No more guesswork

Traditional demand response programs work. But utilities often wonder exactly how much load they can count on shedding during peak times. 

Flexibility management software removes that guesswork by providing granular forecasting and control of diverse distributed energy resources, so they can be tied into a utility’s distribution management system. 

“Now utilities can dispatch and have real-time visibility into how much capacity there is. With the old demand response approach, you would have to guess what you were going to get,” said Todorski.

Big potential savings

Utilities around the country increasingly understand that battery storage systems can offer financial benefits to both their customers and to themselves. 

For example, Vermont utility Green Mountain Power pays customers a little over $30 per month for the right to utilize their battery storage systems as a load-offsetting capacity resource when needed. This incentive makes investment in battery-based backup systems more attractive for customers. 

For Green Mountain Power, access to the batteries is also attractive because it helps address the steep transmission access charge assessed by ISO New England. That charge more than doubled from $3 per kilowatt per month in 2016 to over $7 in 2017. The charge is expected to increase to over $9 in 2018. 

There are other potential financial benefits for utilities, including reducing the need to pay high wholesale prices when demand for energy is high. As more solar is installed on the distribution grid, access to behind-the-meter storage can help manage fluctuations in generation -- a grid benefit that can also save a utility money.

“At the local level, someone may want to install a bunch of solar down the street and the circuit won’t be able to handle it,” said Todorski. “But if the utility can control my battery to deal with the peaks in solar production by holding power locally and releasing it when the sun goes down, then the utility can capture that value stream of distribution upgrade deferral.” 

These financial benefits can be maximized with a software platform that allows for sophisticated and real-time management of all distributed resources.

The ability to harness all distributed resources

As new and more efficient technologies come to market, utilities don’t want to get locked into a particular type of hardware or vendor.

“If Uber could only dispatch Tesla drivers, it would be useless because there aren’t enough of them to create the short pickup time you need,” said Schwarz. “With distributed resources, if you can only access a particular technology, it is not going to be big enough in aggregate to be a virtual power plant that can provide the megawatts you need.”

This makes it essential to have hardware-agnostic software that can extract and aggregate capacity from all flexible resources. 

Kyle Garton, principal product manager at AutoGrid, explained “The distribution grid doesn’t care if a customer has a decade-old pager switch-cycling their AC or the latest solar plus storage system capable of volt/VAR control; benefits can be extracted from any flexible energy resource. And flexibility management software allows utilities and customers to seamlessly integrate and co-optimize any device.” 

A tool that grows with the grid’s needs

What will the technology mix on the grid look like in the future? It’s hard to say with certainty, given how quickly things are changing.

Flexibility management software accounts for the different profiles of distributed technologies and optimizes all flexible resources at the grid edge.

“Batteries have a state of energy, and they have a discharge rate at any point of time that is relatively predictable and controllable.  A thermostat or water heater is very different. They are not as easily predictable, and you need to do some machine learning to determine how much load shed you will get,” said Schwarz.

AutoGrid’s platform automatically performs that complex optimization analysis to manage flexible capacity in real time. 

“When you have a big portfolio of different load-shed options, the optimizer can mathematically go through the options and figure out which levers to pull and when,” said Schwarz. 

As needs and challenges shift in an increasingly distributed and decarbonized system, flexibility management software improves grid operations and maximizes the value of all flexible resources.

“We add new use cases and objectives over time. We started with traditional demand response, then added resource adequacy and ancillary services, and recently added PV self-consumption,” said Schwarz. “A utility wants to have confidence that they’re buying a system that grows with their needs and with their customers’ expectations.”