Collaboration as Innovation

Decarbonization requires radically decentralizing and digitizing our grid, and distributed energy resources (DERs) are key to decentralization. Over the past few years, DERs have made great progress in performance, yet they still struggle for adoption because it is difficult to monetize their capabilities. RMI published “The Economics of Battery Energy Storage” in 2017, detailing how batteries are capable of providing multiple values streams simultaneously. These capabilities have been proven time and time again in pilots and field deployments. However, it has been difficult for batteries to contractually and transactionally provide value to multiple parties as a single resource.

This spring, Greentech Media published an article where they coined the term “collaboration as innovation.” The article was about a grid-scale battery being installed in Oakland, CA that will be able to sell services to multiple parties. The grid scale battery will provide PG&E, the distribution utility, with local area reliability as a non-wires alternative solution, and it will provide EBCE, the retailer, with capacity to help meet resource adequacy requirements. This type of collaboration, where multiple parties contract with energy storage systems to purchase services, is critical to the proliferation of batteries and our decentralized future.

We need a model going forward that makes this easier to do. 1) Regulations must allow different utility entities to purchase specific services from energy storage, 2) data must be able to track DER actions at a detailed level for M&V of specific services, and 3) multilateral transactions and micro-contracts must be enabled to connect multiple purchasers of services with energy storage systems. The future of energy depends on being able to connect multiple parties with the services that DERs can provide.