SEPA, ESA Explore Utility Business Models for Energy Storage

Highlights Utility Value of Grid-Connected Storage

WASHINGTON, D.C. — Grid-connected storage can provide value as a resource to support renewable integration, provide grid services, and deliver customer benefits. A new report from the Smart Electric Power Alliance (SEPA) and the Energy Storage Association (ESA) summarizes the key factors that influence utility business models for energy storage and provides four case studies highlighting projects employing creative business models.

”Energy storage, more so than other asset types, requires utilities to think creatively in order to realize potential value streams,” said Robert Tucker, Director, Industry Strategy at SEPA. “This report highlights the business models we see utilities using to extract these value streams to the benefit of the grid and customers.”

Key findings:

• Multiple battery storage technologies offer viable solutions as grid-connected assets, with lithium-ion batteries already demonstrating cost effectiveness under certain business models.
• Regulatory challenges remain in some states and jurisdictions regarding utility ownership of energy storage, limiting the ability of those utilities to maximize the value of storage for the grid and customers.
• Energy storage is a preferred non-wires alternative (NWA) solution for many utilities due to the flexible services it can offer and its cost effectiveness as compared to traditional capital expenditures.
• Grid-connected energy storage projects can optimize value streams between project partners through operational control agreements that codify operational parameters and prioritize dispatch rights between parties.
• Creative program designs can enable utilities to leverage grid-connected energy storage to provide grid value, while also providing direct customer benefits.

Featured case studies:

• SMUD Energy StorageShares℠
• Con Edison and GI Energy
• Maryland IOU Energy Storage Pilots
• Oakland Clean Energy Initiative (OECI) and PG&E-Vistra Energy

The full report, Utility Business Models for Grid Connected Storage is available for free to SEPA members.