Why AMS sees promise in Texas

AMS sees potential in helping change the Texas energy market to one based more on the sun. Pic: Pixabay.

AMS sees potential in helping change the Texas energy market to one based more on the sun. Pic: Pixabay.

By Jason Deign

San Francisco, USA-based Advanced Microgrid Solutions (AMS) is expanding into Texas as part of moves to grow its presence outside its core California market.

The company this month announced a USD$3.24m US Department of Energy grant-funded project with Pedernales Electric Cooperative (PEC), of central Texas, to investigate the use of storage with distributed solar generation.

The news came hot on the heels of another deal, with Texas Electric Cooperatives (TEC), to showcase a 200kWh AMS installation and offer energy storage systems at preferential rates to TEC’s member cooperatives.

“TEC is the co-op of co-ops,” said Manal Yamout, vice president of policy at AMS. “They have 75 co-op members, and what TEC does for them is bulk-buy poles and wires and now AMS batteries.”

The partnership is essentially a distribution deal that opens the door for AMS to sell batteries and services to consumer-owned electric cooperatives serving 2m homes and businesses in Texas, Oklahoma and New Mexico. 

AMS has been targeting Texas

AMS has been targeting Texas after opening an office in Austin, the state capital, nine months ago. “[It’s] not just to focus on Texas but to broaden our presence outside of California,” Yamout said.

“But it’s no accident that we had someone in Texas and we figured out how to put together some innovative deals.”

Apart from a Canadian microgrid project led by Opus One Solutions, which is also a partner in the Pedernales deal, Texas is effectively the first major market that AMS has broken into after building up a head of steam in California.

The developer has 120MW of contracted behind-the-meter capacity in California, “more than anyone else on the distributed storage side,” said Yamout. “The last nine months have been about ‘where are we going next?’”

As well as Austin, AMS has opened offices in Atlanta, Boston and New York. Within Texas, the company believes it may have hit a sweet spot with cooperatives because of the challenges they face. 

Serving remote communities

These include serving remote communities where transmission and distribution network upgrades could be very expensive, making it more financially viable to use a battery instead.

At the same time, Yamout said the Electric Reliability Council of Texas (ERCOT), the grid operator, was making moves to support distributed energy aggregation.

“That is an indication that something is going to shift at some point,” she said, although “Texas is not going to have a storage procurement target [or] an incentive programme.”

On that basis, demand for storage is likely to come from a growing need for utilities to integrate renewable energy on the Texas grid, which is relatively isolated from other electricity networks in the US.

Figures from the US Energy Information Administration show renewable energy already makes up more than 15% of net electricity generation in the state. 

More wind than any other state

Most of this is from wind power; Texas has more than 18.5GW of turbines, more than any other state in the US. It also has the highest average annual electricity cost, at $1,801 per household, and some customers face demand charges.

This high electricity cost, along with well over 200 days of sunshine a year, might hint at a growing opportunity for residential solar-plus-storage installations. AMS is most definitely not targeting the residential market, though.

Nevertheless, the company hinted that it may be willing to make other concessions as it expands beyond California.

One is to broaden its product line-up: Yamout hinted that AMS could soon announce a battery supply deal to complement its existing arrangement with Tesla.

Another is to complement its previously rigid behind-the-meter stance with front-of-meter installations. 

Putting storage in front of the meter

“With the co-op model, we anticipate putting some energy storage in front of the meter but some of it will be behind commercial and industrial accounts as well,” said Audrey Lee, vice president of analytics and design.

Purely based on non-residential, behind-the-meter potential, AMS forecasts a pipeline of 50MW of projects in Texas over the next two years. Much of this might come as Texans embrace distributed solar.

Solar Energy Industries Association figures from 2015 show Texas ranking ninth in the US for installed solar capacity, but installations grew 65% in the previous year.

That is why AMS is treasuring its upcoming demonstration project with Pedernales, which will show how utilities can manage large solar loads on the grid.

With all this, AMS hasn’t given up on California. It is chasing opportunities in New York, Hawaii, Massachusetts and Nevada, but California remains its number one priority.

“We’re chasing every opportunity in all of those markets,” said Yamout.

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