By Jason Deign
Consolidated Edison (Con Ed) is planning to test a residential storage-based virtual power plant (VPP) concept, Energy Storage Report has learned.
The investor-owned utility, which serves New York City and Westchester County in the US, is hoping to launch a pilot scheme this summer, said Griffin Reilly, project manager for the Con Ed Clean VPP concept.
Initially the project will test how much New Yorkers might be willing to pay on a subscription basis for grid resiliency services, essentially backup power, provided through a battery system installed on their premises.
Customers will not have to pay the upfront cost of the system because Con Ed will own it and reserve the right to sell the aggregated output of many such systems on the wholesale or distribution markets.
The utility is looking to have around 1.8MW and 4MWh of aggregated capacity across the VPP.
Currently in negotiations
According to a project outline seen by Energy Storage Report, Con Ed’s customer offering for the pilot would consist of:
- A solar system that would be financed or purchased by the customer on a 20-year lease with no upfront cost, helping reduce electricity bills.
- An energy storage system that would be a Con Edison-owned asset.
- A monthly resiliency payment that the customer would pay to SunPower for resiliency services offered by the integrated solar and energy storage system.
As well as finding out how much consumers might pay for backup power, a key part of the first phase of the project will be to see how they would like pay: as a portion of their bill, as a percentage of electricity savings or as a fixed amount.
Overall, though, consumers will win out by having a more reliable power supply and possibly bill savings on top.
Meanwhile, each solar-plus-storage system will deliver data back to a network operations centre owned by SunPower and Sunverge.
As the number of customers in the pilot increases, Con Ed will look to integrate this data into its own supervisory control and data acquisition system so it can monitor and potentially control the storage assets remotely.
It has yet to be confirmed whether SunPower and Sunverge will operate the VPP on Con Ed’s behalf, or whether the utility will do so directly.
Either way, the data will help Con Ed to further refine the business case for the VPP, for example by giving customers a way to benefit from demand response or peak-load reduction programmes.
Growing importance of the market
Con Ed’s project highlights the growing importance of New York as a major upcoming market for energy storage in the US, said Doug Staker, vice president of global sales at Demand Energy, one of the state’s main players.
“This is a dedicated project designed to test market principals and move the Reforming the Energy Vision market forward,” he said.
“We’re seeing growing interest around storage in New York State and Con Ed’s involvement confirms there is an increasingly positive business case for deployment.”
However, the Con Ed initiative still has to jump through a number of hoops. The first is that Sunverge’s lithium-ion battery technology is currently outlawed by the New York Fire Department.
Con Ed is working with the Department on testing that should lead to acceptance, and fire chiefs are “on board with our approach,” said Reilly, but approval is still not a given.
Finalising details of the deal
The utility also needs to finalise the details of its deal with SunPower and Sunverge.
This is important because of all the vendors Con Ed has investigated, “Sunverge has the only fully integrated solar-plus-battery system that can be despatched from the cloud,” Reilly said.
Given these early hurdles and the need to finalise much of the business model, Reilly said it could be around 2020 before the VPP is a fully commercial proposition. That is still pretty good going, though.
Storage players such as Sonnen and LichtBlick are already developing virtual power plant concepts in Germany, but Con Ed is thought to be the first utility to test the idea. The results will be watched with interest.
- Griffin Reilly will be speaking on the VPP concept at Energy Storage Update USA 2016 in San Diego, US, on June 15 and 16. Request a brochure or register by this Friday for super early bird savings.