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Green Mountain Power and Tesla break grid barriers with behind-the-meter batteries

Internet-controlled home Powerwalls are providing second-by-second frequency regulation — a big step for proving distributed energy’s grid capabilities.
By Jeff St. John

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Can distributed energy resources be tapped to provide the power grid’s most critical balancing needs? Green Mountain Power says yes — and it has the real-world experience to prove it.

Last week, the Vermont utility unveiled a project that’s tapping the second-by-second responsiveness of 200 Tesla Powerwall batteries installed in its customers’ homes to provide up to 1 megawatt of frequency regulation service to grid operator ISO New England.

Testing over the past few months has shown the performance was looking awesome — it was sticking the signal and staying in the time performance [range] we needed,” said Josh Castonguay, the utility’s chief innovation officer, in a Thursday interview.

Both metrics are particularly important because Green Mountain Power and its partners are coordinating the four-second frequency regulation dispatches over broadband internet, rather than the fiber-optic communications networks that typically provide that service.

ISO-New England sends its signals to Green Mountain Power’s control room, which then passes it on to Tesla’s battery control software platform, Autobidder, Castonguay explained. Software vendor Customized Energy Solutions carried out the integration that allows ISO-NE’s data to be shared between the utility and Tesla’s platform, and then travel from Tesla’s batteries back to ISO-NE to confirm that they’re sticking the signal,” as Castonguay put it.

That was the big question mark when we started, just getting the path to flow through [the utility’s] control room to Tesla’s system, out to the batteries and back,” he said. Now that it’s proven the system works, the utility is eager to expand the service to the roughly 16 megawatts of behind-the-meter batteries in its service territory.

We have some legacy peaker facilities that I can’t wait to retire,” he said, referring to the natural-gas-fired power plants used to quickly respond to grid-balancing needs.

Proving what distributed energy can do to balance the grid

This kind of grid-edge capability has been a holy grail of sorts. Utilities, distributed energy aggregators and environmental advocates are all eager to tap the flexibility of behind-the-meter resources as an alternative to power plants.

Today, a growing number of solar-battery systems, electric-vehicle chargers and load controls are being aggregated into virtual power plants from California and Hawaii to Massachusetts and New York. But these systems are largely starting out by performing simpler tasks, such as bidding their capacity into wholesale energy markets days or hours ahead of when they might be needed.

The kind of technology needed to communicate and confirm actions with a four-second turnaround is much more complex, and it presents a much greater risk of signals failing to get through and assets failing to respond in time.

Green Mountain Power’s new project isn’t the first time distributed energy resources have been tested as a means to provide fast-response grid services. Nuvve, a pioneer in the vehicle-to-grid charging space, has been doing it at pilot scale for mid-Atlantic grid operator PJM for more than a decade and is actively participating in European markets. Schneider Electric and IPKeys demonstrated in 2014 that variable frequency drives — power electronics-enabled electric motors that can swiftly vary power consumption of building heating and cooling systems — can respond to frequency regulation signals.

But Green Mountain Power is the first to aggregate home batteries for frequency regulation in U.S. markets at commercial scale, said Haresh Kamath, director of energy storage at the Electric Power Research Institute.

It’s still quite small, but it’s an important first step” in terms of demonstrating how distributed energy resources can perform the most technically challenging of grid services, he said.

Frequency regulation markets pay high prices per megawatt for resources that can provide the vital service of stabilizing grid frequency to prevent widespread grid collapse. But they’re also relatively small markets, compared to wholesale energy and capacity markets, and the value to be captured by serving them has fluctuated quite a bit over time. That’s made for disappointing economics for energy storage systems that relied solely on that market to justify their lifetime costs, as has happened in PJM’s boom-and-bust market over the past decade.

Tapping the revenue stream that behind-the-meter batteries can earn from frequency regulation could help promote the technology’s proliferation, Kamath said. Paired with their ability to keep customers’ power on during outages, reduce strain on local circuits and cut utilities’ overall costs, this could add up to a compelling value proposition.

It’s a great place to demonstrate how the same asset can deliver value to a customer and to the grid,” he said.

The business case for grid-edge flexibility

Green Mountain Power is paying participating customers $13.50 per month for allowing it to tap their batteries for frequency regulation, Castonguay said. That’s about 30 percent of the total value of the revenue it forecasts earning from the market, with another 30 percent going to Tesla and the remaining 40 percent going to reduce overall customer bills, he said.

That’s all on top of the savings and value we’d planned originally” when the utility launched its groundbreaking home battery pilot program. Green Mountain Power’s program is unique among U.S. utilities; it is permitted to rate-base the cost of batteries and charge customers monthly payments, now set at $55 per month, to recoup the cost.

Green Mountain Power has also been enlisting customers to install smart thermostats, water heaters and EV chargers that can be remotely monitored and controlled to help balance the grid. It recently launched a pilot project with smart electrical panel startup Span to monitor those different assets from a single point. It’s aiming for 50 to 100 megawatts of additional storage and flexible load resources” to reach its goal of 100 percent renewable energy by 2030.

They’re looking at it holistically: not just storage but the whole picture,” Kamath said.

Electric Power Research Institute, a research organization funded by U.S. utilities, has been studying how to orchestrate behind-the-meter assets in ways that allow improved visibility for both distribution grid operators like Green Mountain Power and transmission market operators like ISO-New England. This kind of shared visibility will become increasingly important as the country’s grid operators comply with the Federal Energy Regulatory Commission’s Order 2222, which mandates that wholesale energy markets are opened up to include distributed energy resources.

There’s some work to be done on the technology side…just to know what’s going on,” said EPRI’s Kamath, who’s involved in a DOE-funded project called Engage to define and develop technologies and integrations to solve these problems.

State and federal policies are pressing utilities to switch from fossil-fueled power plants to wind and solar power, and customers to exchange gasoline-fueled cars for plug-in electric vehicles and switch out natural-gas-powered furnaces and appliances for all-electric models. This shift is ultimately going to mean the use of every single asset we have, which is going to include every rooftop solar system, every energy storage system behind the meter, every electric-vehicle charging station,” he said.

According to Castonguay, Green Mountain Power has a head start on these types of efforts for a number of reasons. These include its large share of behind-the-meter batteries and its unique relationship with customers that allows it to tap them for grid services. A number of other states are also engaged in regulatory efforts to encourage utilities to find ways to leverage distributed energy for grid needs, including Hawaii, California, New York, Arizona, Massachusetts, Minnesota and Nevada.

ISO-New England was one of the first of the country’s grid operators to open up its capacity markets to distributed solar-battery systems, and it is working on its compliance plans for FERC Order 2222, according to ISO-NE spokesperson Matthew Kakley.

It can take some time, particularly with something novel that doesn’t have an off-the-shelf history with it,” he said. But, he added, our markets are open to anyone who can provide the service and wants to compete to provide the service. […] Just because no one’s done it a certain way [before] doesn’t mean it can’t work.”

(Article image courtesy of Green Mountain Power) 

Jeff St. John is director of news and special projects at Canary Media. He covers innovative grid technologies, rooftop solar and batteries, clean hydrogen, EV charging and more.