While many commercial and industrial (C&I) businesses are limited by the sustainability and resiliency benefits of energy storage systems, the technology's ability to support multiple demand-side management strategies is becoming increasingly valuable.
One of the most important benefits of a well-designed and optimized energy storage system (ESS) is the opportunity to provide "stacked services," where the same equipment, system or process is used to generate multiple benefits, thereby maximizing financial value. Some examples of these services include.
Demand response: Companies can use energy storage systems (ESS) to generate revenue by participating in demand response programs while minimizing the energy demand required to generate electricity on-site.
-Time of Use Charge Management: With Energy Storage Systems (ESS), businesses can avoid daily peak prices by reducing grid demand and aligning with the energy provider's time of use.
-Demand charge management: With energy storage systems (ESS), companies can reduce costly demand charges by reducing demand at the right time, resulting in significant annual energy cost savings.
"Value stacking" means not only taking advantage of these services, but optimizing the deployment of ESS to get the most possible value from them. While these are just a few examples of the services available to businesses, they can create hundreds of thousands of dollars in annual value for some businesses if managed properly.
Understanding the challenges of value stacking
Traditionally, energy storage system (ESS) controllers have implemented these demand-side management strategies individually. To date, the barrier to stacking multiple values has been compatibility.
If stacking services are required, the benefits must be technically and operationally compatible," says the American Energy Storage Association. Energy storage systems are technically compatible if they have all of the technical features necessary to perform the required functions when used for all of the targeted benefits. They are operationally compatible if they do not create operational conflicts when used for the respective benefits."
For example, on a given day, an energy storage system (ESS) may be used in conjunction with renewable energy while also helping to manage time-of-use costs and participating in demand response programs, but the amount and timing of each operation will depend on the cloud cover, the operating schedule and load requirements of the solar generation system, and other factors on a given day. There is no intelligent way to optimize, which can lead to missed financial opportunities and negatively impact battery performance or lifetime.
And it's complex enough to use a good analogy, such as determining the optimal altitude for an airliner flying from Seattle to New York, which requires consideration of a number of balancing factors such as passenger weight, fuel consumption, safety, and time of arrival. At the same time, its calculations must also consider how the winds will change throughout the flight path and react while maintaining a balance of other considerations.
Similarly, energy storage systems need to leverage all available demand-side value streams while taking into account other variable factors (such as changing electrical loads and battery performance degradation) in order to optimize the value of their energy storage system (ESS) assets.
The key to value stacking: real-time optimal control
An Energy Storage System (ESS) platform with real-time optimal control can continuously balance multiple value streams involved at the same time, especially when they may compete with each other, while considering the impact on battery performance degradation.
Real-time optimal control systems can analyze all factors that affect the energy storage profile, such as tariffs, incentives, demand response programs, batteries, sizes, etc., while also understanding energy consumption patterns. Using this data, users are well positioned to plan and automate control strategies, deploy energy storage systems (ESS) to deliver maximum economic value from all available value streams, and extend battery life. As a result, companies can maximize the return on their energy storage system (ESS) investments while leveraging sustainability and resiliency.
The days of deploying energy storage systems for one purpose only are coming to an end. With today's evolving rate structures, market demands and incentive programs, system ROI, the value of stack-based services has become more complex and economically beneficial.
