Avoiding blackouts all together with behind-the-meter storage

Whether California could have avoided its recent rolling blackouts is by now a moot point for Ted Ko, vice president of policy and regulatory affairs at the commercial storage company Stem. To avoid such outages in the future, Ko said in a recent interview with pv magazine, the state’s utilities, grid operator and regulators need to make the best use of all the resources they have — like Stem’s hundreds of installations of behind-the-meter (BTM) commercial storage. 

When the blackouts hit on Aug. 14, Ko said, 340 of the company’s storage installations across California responded automatically, providing power directly to the commercial buildings they serve — in effect taking 50 MW of demand off the grid.

“That was the equivalent of about 20,000 homes turning off electricity,” he said. But “we had over 100 MW available across our entire fleet. If we were able to put the energy back on the grid, we could have provided another 50 MW.”

Exactly why Stem and other BTM commercial storage couldn’t pump out more electrons in the crisis is because they are “load limited,” Ko said. Under California regulations, they can only serve the buildings, or load, they are attached to; unlike behind-the-meter solar, they can’t export excess power to the grid. 

“No one is going to compensate us for putting energy back on the grid,” he said. “Our systems are not configured to do that, they’re not allowed to.”

The conditions under which BTM storage can and can’t receive compensation for power exported to California’s grid are complex and determined by different sets of regulations. For example, California’s net energy metering rules consider storage paired with — and entirely charged from — net-metered solar as part of the system and therefore eligible for compensation. 

 Ko is talking about California’s Rule 21, the set of regulations that govern how distributed energy resources — like standalone storage — interconnect to the grid. Jin Noh, senior policy manager for the California Energy Storage Alliance (CESA), said configuring BTM storage for export is possible under Rule 21, but would require additional time and cost, along with a tariff for appropriate compensation.

But, echoing Ko, he said, the current situation creates “potential stranded value, where you could provide additional export beyond what your customer load is.” Further, with Covid-19 shutting down offices across the state, the amount of stranded power Stem and other commercial storage companies now have behind the meter could be considerable, he said.

Flexibility and smart software

Beyond basic resource adequacy — having enough power — the key to resilience, and avoiding power outages in emergencies, is flexibility, which is what standalone storage and the advanced software most systems now use bring to the table, said Ko.

“The value you get out of storage, and what the benefits are, are completely dependent on how you operate and how smart your software is,” he said, noting Stem’s pioneering development of software incorporating artificial intelligence. The company has long branded itself primarily as a software provider offering storage as a service. 

Throughout California’s power crisis, Ko said, Stem’s software allowed its installations to respond quickly to the evolving situation, in one case cutting demand to specified levels; in another, remotely reconfiguring its entire fleet to defer charging till after 10 p.m. 

Beyond that, what’s needed, Ko said, is long-term system reform as well as more immediate regulatory flexibility. Specifically, regulators and utilities should be able to waive certain rules in emergency situations, to ensure the grid has the power and the full range of support services needed to keep the lights on.

For example, on Aug. 17, the California Public Utilities Commission (CPUC) issued a letter that essentially waived a rule under which companies participating in demand response programs are not allowed to use backup fossil fuel generators. The emergency waiver allowed one Stem customer to run backup generation “as cleanly as possible,” Ko said, while still reducing demand on the grid and getting full credit under the demand response program.  

The temporary waiver was one of a list of emergency measures the CPUC, California Independent System Operator (CAISO), and the California Energy Commission (CEC) set out in an Aug. 19 letter to Gov. Gavin Newsom, detailing their response to the rolling blackouts.

In addition, the letter acknowledges the need to allow more distributed resources to export power to the grid, “even if they do not qualify to provide reliability services.” A joint meeting of the CPUC, CAISO and the CEC, is scheduled to take up the issue on Sept. 3, according to an email from the CPUC. 

Noh says CESA is looking for a collaborative effort between industry and regulators, but sees a lot of moving pieces in how to quantify, value and integrate such “stranded export” resources. Ko is more emphatic.

“We want to make sure that we get all of the resources out there into the market and visible to the system operator so they can be part of the solution,” he said. “Let’s get moving on that now — getting as much solar and storage out there, networked together, participating in the wholesale markets and ready for the next crisis.”