Will this be the year of energy storage software?

Will 2016 be the year of energy storage software and virtual power plants? We look at developments from companies who are driving the industry like Greensmith, Autogrid Systems and Electro Power Systems, Sonnenbatterie and LichtBlick.

Energy storage software and virtual power plants: We look at developments from companies driving the industry, like Greensmith, Autogrid Systems and Electro Power Systems, Sonnenbatterie and LichtBlick. Photo: Electro Power Systems

By Jason Deign

Recent announcements have signalled growing interest in the development of software systems that can tie energy storage assets together to form virtual power plants.

Last month, for example, the European utility E.ON joined American Electric Power as a major investor in Greensmith, one of the world’s largest providers of energy storage software and integration services.

Meanwhile the energy analytics software firm AutoGrid Systems, of Redwood in California, USA, joined forces with Paris-based hydrogen storage developer Electro Power Systems to build and operate “software-defined power plants.”

The December announcements follow a growing number of energy storage software developments in 2015.

E.ON’s interest in Greensmith, for example, could be seen as countermeasure against Sonnenbatterie’s November announcement of a community based energy-trading platform in Germany.

Direct threat to the traditional energy model

Sonnenbatterie’s sonnenCommunity concept is a direct threat to the traditional energy model in Germany, where E.ON is the second-largest provider.

Nor is Sonnenbatterie the only company threatening to use energy storage systems as a means of gaining market share from utility suppliers.

LichtBlick, Caterva, Fenecon, Senec-IES and Next Kraftwerke are all developing software to tie together storage assets in virtual power plants.

Until the sonnenCommunity launch, LichtBlick, a Tesla partner, was leading the charge after uniting 1,000 decentralised combined heat and power units in a single virtual power plant, with plans to add residential energy storage as well.

With these emerging providers making it easy for German residential customers to avoid utility charges with help from energy storage, it seems likely that E.ON is planning a virtual power plant concept of its own, with help from Greensmith.

New aggregation functionality

As previously reported in Energy Storage Report, Greensmith unveiled new aggregation functionality for its software last September.

John Jung, chief executive, also confirmed the company was looking to expand beyond the US and cited Germany as a potential new market in 2016.

The last year has seen energy storage project developers increasingly moving away from connecting hardware and towards creating intelligent software that can control distributed batteries and other assets.

Greensmith claims to be a leader in this area, with a portfolio that covers a third of all energy storage projects commissioned in the US last year.

But numerous other firms are hot on Greensmith’s heals, including Demand EnergyGeliStem and Younicos, to name but a few.

Good reasons to focus on software

There are good reasons why these companies might want to focus on software rather than the hardware used for energy storage.

The most obvious, as many battery technology developers have found to their cost, is that it is very hard and very costly to achieve significant breakthroughs in battery chemistry.

To date, the best commercial efforts still seem focused on lithium-ion, a technology that has been around since the 1980s and owes much of its success to developments associated with consumer electronics.

And it is significant that Tesla’s market-busting battery price announcement last year was based on expected economies of scale for an existing lithium-ion product, not a major innovation in technology.

Furthermore, even the best attempts to improve electrical storage technology tend to yield products that are only appropriate for a limited range of applications, which is why there is increasing interest in hybridising hardware.

Relatively quick and cheap development

In contrast, storage control software can be developed and refined relatively quickly and cheaply.

Plus it can arguably deliver much greater value than hardware innovation, by allowing multiple battery systems to operate in a way that maximises their return on investment.

One simple example is the battery management technology developed by French start-up Enerstone, which reduces the strain on weak cells to extend the overall lifespan of batteries by up to an alleged 30%.

On the larger, system aggregation level being looked at by many other software developers, the benefits are more around pooling storage assets to deliver a diverse stack of applications, from peak shaving to peer-to-peer energy trading.

This mirrors a growing trend towards aggregation among distributed energy resource (DER) owners in general.

Ways to control the output from plants

Solar plant owners, in particular, are increasingly looking for ways to control the output from their plants to suit utility demand.

One method is to aggregate resources and curtail parts of the whole to follow utility load curves, similar to what happens already in the wind industry. Adding storage to solar can obviously help with this.

But even so, full control is dependent on having the right software, and here it is the storage companies that appear to be taking the lead.

Last September, for example, the Rocky Mountain Institute (RMI) hailed as a “major milestone” the fact that Stem had bid an aggregated fleet of behind-the-meter storage systems into the California real-time energy market.

“Most batteries being installed today at customer premises are vastly under-utilised, often being dispatched or charged 5–50% of the time,” wrote Garrett Fitzgerald, a senior associate in RMI’s electricity practice, in a blog posting.

“That’s what makes this pilot such an exciting development. It is a first step towards multi-use, highly utilised energy storage deployment and is just the tip of the iceberg regarding the future role of DERs in the electricity system.”

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