Con Ed chases energy storage value

Con Edison is planning to put battery packs on wheels to help strengthen weak spots on the grid. Pic: Con Edison.

Con Edison is planning to put battery packs on wheels to help strengthen weak spots on the grid. Pic: Con Edison.

By Jason Deign

Next year the New York utility Consolidated Edison (Con Ed) hopes to profit from energy storage both sides of the meter… and all over town. It has projects underway for front-of-meter, behind-the-meter and even mobile energy storage.

The mobile energy storage demonstration project, unveiled six weeks ago, will involve the development of a three-strong fleet of battery trucks that can be driven out to deliver up to 1MW and 4MWh in stressed grid spots.

“Con Edison will determine where to deploy the batteries each summer based on the needs of its electrical networks,” said the company in a press release.

According to a company filing made to the New York State Department of Public Service in February, the fleet will be made up of two trucks each bearing 500kW and 2MWh of battery storage and a third with electrical switchgear.

Greensmith will be acting as system integrator for the Storage on Demand project, and will provide an energy management system to manage batteries provided by LG Chem. 

A fourth project partner

When not out and about, the fleet will be stationed at a power plant in Astoria, Queens, owned by a fourth project partner, the generation firm NRG Energy. Con Ed will pay NRG to operate and maintain the trucks.

At the same time, NRG will be able to use the Storage on Demand units to make money by providing services for the New York Independent System Operator.

The margin on these services will be used to reimburse Con Ed’s payments to NRG and any excess will be split between the two companies.

At all times, “the storage assets will be deployable by Con Edison, as needed, for transmission deferral, distribution deferral or system emergencies,” said the filing.

Con Ed hopes that chasing situations where energy storage is needed urgently will help it make the most of its investment in battery assets. 

Leaving “significant value on the table”

“The standard behind-the-meter energy storage business model creates value for customers and the grid, but tends to leave significant value on the table,” it noted in the filing.

“According to the Rocky Mountain Institute report titled ‘The Economics of Battery Energy Storage,’ the majority of battery systems sit unused or underutilised for well over half of the system’s lifetime.

“The project addresses this wasted value by creating an innovative multi-use energy storage asset that can be utilised by multiple stakeholders and deployed to capture multiple services.”

Con Ed believes Storage on Demand will also help defer costly transmission and distribution (T&D) upgrades.

“With the planned revenue sharing mechanism … the company anticipates that the entire cost of the system will be less than the cost of an equivalent system purchased by Con Edison and used exclusively for T&D deferral,” it said. 

Scheduled to go live in May 2018

The demonstration project is scheduled to go live in May 2018. In the meantime, though, Con Ed is also pressing ahead with more conventional energy storage projects.

One of them, first reported in Energy Storage Report last year, involves aggregating around 1.8MW and 4MWh of residential battery storage, spread across 300 or so sites, to create a virtual power plant.

The project is being carried out in association with solar installer SunPower and San Francisco-based Sunverge Energy. Another project, filed in January, will involve placing 4.2MW and 4.4MWh of front-of-meter storage across four sites.

Con Ed will earn wholesale revenues on being able to despatch the stored energy at will, and use part of these profits to pay GI Energy, a microgrid developer, build and manage the storage units.

GI Energy, in turn, will pay site owners for the space occupied by the battery systems. Con Ed expects to be able to pay for the batteries through third-party financing. 

Increased flexibility at indoor sites

Most of the batteries will be from NEC but “one site will also include an Urban Electric Power 200kW/400kWh zinc manganese dioxide battery system that may provide increased flexibility at indoor battery sites,” Con Ed said.

The utility is working on front-of-meter storage because it fears that a traditional behind-the-meter (BTM) storage aggregation approach won’t give it quite the flexibility it needs to deal with New York’s grid constraints.

“The economics of the BTM model restrict potential market size as customer demand and load profile limit the number of profitable sites,” said the company in its January filing.

It is still keen to try BTM models, though. In a fourth and final energy storage project, Con Ed has included batteries among the measures used for demand response in the Brooklyn-Queens area of New York.

Last year storage developers such as Demand Energy gained contracts in the Brooklyn-Queens Neighborhood Program, said to be “the largest and most comprehensive non-wires alternative distribution project in the country.”   

Evaluating all four projects

Adrienne Lalle, project manager for Storage on Demand and the front-of-meter demonstration scheme, told Energy Storage Report that Con Ed would be evaluating all four projects to see which offered the best value.

“We want to analyse that before spending more money,” she said.

Finding the models that work best is vital, though, because New York state is aiming to get 50% of its energy from renewable sources by 2030.

“We’re going to see a lot of renewable energy coming onto the system in the next 13 years,” Lalle said.

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