Jul 31, 2015

Tesla batteries: the beginning of how technology will transform the electric grid

Renewable Energy
Michael McElfresh
6 min
Tesla Motors already makes batteries for its e...

Tesla Motors already makes batteries for its electric cars, but in April, it introduced battery systems for homes, businesses and electric utilities.

The spread of cost-effective batteries will fundamentally change the way the electric grid operates. Combined with other innovations, batteries in homes and businesses will transform how people and businesses treat electricity. Along the way, these batteries will improve the efficiency and reliability of the grid overall.

The solar factor

Right now, most power is generated at large power plants and distributed to consumers. Electric energy storage allows a two-way flow of power, which offers some significant advantages for support of the power grid. For example, storage is particularly useful for offsetting the intermittent nature of wind and solar photovoltaics, which don’t produce power on demand as a fossil fuel power plant does.

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For an individual consumer, having a battery behind the meter provides a great deal of flexibility in managing energy use. Batteries allow consumers to cut their electric bills by reducing how much power they consume during peak hours when power costs more, which is the case in many states such as California.

Homes with rooftop solar panels and batteries can actually use energy from their solar systems during power outages and, with a modest amount of storage, have sufficient power to last for days if the grid is out. And with enough storage, they can disconnect from the grid indefinitely—a development utilities fear.

A number of states have net metering—programs in which utilities purchase the excess electricity from solar panels that is fed into the grid. In combination with net metering, behind-the-meter storage creates the opportunity for customers to buy power from the grid when prices are low and then sell stored energy from batteries when prices are high. This practice, known as arbitrage, has led to concerns at utilities which have levied large additional charges for equipment installations in some places.

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Commercial and industrial customers stand to benefit from behind-the-meter storage as well. They can reduce their usage during times of peak demand and cut so-called demand charges— fees for maximum power usage— that can dominate how much they pay for energy.

Batteries with wheels

From the perspective of the power grid, electric vehicles (EVs) can in many respects be considered a variation of behind-the-meter storage— they just happen to be mobile.

EV batteries can hold a significant amount of energy. The Nissan Leaf, for example, holds 24 kilowatt-hours, while an average house will use 30 kilowatt-hours per day, so a car battery could provide backup power during an outage.

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But electric cars create challenges for grid operators. Because they draw so much current during charging, there is the potential to overload circuits that serve neighborhoods. In order to mitigate this and avoid the cost of upgrading the infrastructure, some utilities offer, or require, special tariffs that reward EV charging at night when energy demand and prices are low.

By charging when the power use is low, EVs can help flatten the typical load curve of the grid and draw power at off-peak hours at night.

Since EVs are pulling power off the grid, they can also offset excess power production from wind in particular, which often generates more power than can be used late at night. That can help generators avoid the negative pricing—when excess power reduces the real-time price of power to less than zero—sometimes associated with excessive wind generation conditions.

Meanwhile, EVs can address the decreasing power sales utilities have been experiencing by adding what is essentially another power-hungry appliance to their monthly bills.

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Close on the horizon is so-called vehicle to grid (V2G) technology. Standards will finally make it possible to use the EV battery in two-way operation with utilities. The University of Delaware, for example, has experimented with ways to connect parked EVs to the electric grid. When grid operators need a short burst of power or have excess power, they push power back and forth into the EVs' batteries. Owners could be paid for these services.

Peak shaving

A real game changer, however, would be if utilities could manage the behind-the-meter storage with another technology known as demand response— or cutting power use at key times during the day.

Utilities used to make deals with large energy users, such as factories, and call them on the phone to cut power use during peak power days. For example, in the middle of a hot summer day when the load from air conditioning is high, grid operators struggle to meet the demand. Cutting power during those peak hours gives them more capacity to avoid brownouts. And in exchange for agreeing to reduce power on peak days, customers get some sort of payment.

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The phone calls of old evolved into automated systems. And eventually, in deregulated markets, businesses formed that collect the demand response commitments from multiple large energy users. Then they sell that capacity to reduce power when needed on the daily energy markets. This has been an effective method for reducing dependence on the polluting and expensive generators that only run for those few weeks of peak needs.

The power of connected storage

More recently, utilities—particularly those with hourly pricing plans such as ComEd in Illinois and Austin Energy in Texas—have begun experimenting with demand response in the residential market.

Smart thermostat maker Nest uses its internet-connected thermostat to respond to demand response requests on peak demand days. Customers can respond to a day-ahead phone notification by choosing to opt out of the event or they can simply adjust the thermostat to opt out after the utility has given the signal.

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Some more recent demand response experiments involve hour-ahead notification. So far these experiments have mostly dealt with adjusting thermostats to reduce loads, but appliances are now being sold with the ability to use real-time pricing for operating decisions.

What if the behind-the-meter storage could be dispatched by demand response signals? If utilities could draw on the energy stored in behind-the-meter batteries and EVs, it could have a range of benefits. The connected storage could lower power costs by eliminating some peak generation needs and provide a buffer for variable wind and solar power.

For the consumer, energy storage enables a whole new way to look at home electricity use. It can provide energy security, lower energy costs and eventually offer an opportunity to become part of the market for buying and selling power.

Michael McElfresh is Adjunct Professor of Electrical Engineering at Santa Clara University.

This article was originally published on The Conversation.

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Jul 26, 2021

Ofwat allows retailers to raise prices from April

Dominic Ellis
3 min
Ofwat confirms levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue

Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.

The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.

Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.  

In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue. 

Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”  

There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:   

  1. Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps. 
  2. Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold. 
  3. Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice. 

Further consultation on the proposed adjustments to REC price caps can be expected by December.

Anita Dougall, CEO and Founding Partner at Sagacity, said Ofwat’s decision comes hot on the heels of Ofgem’s price cap rise in April.

"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.

"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."

United Utilities picks up pipeline award

A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.

The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.

“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.

Camus Energy secures $16m funding

Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent VenturesWave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.

As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.

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