How ConEd’s mobile battery REV demo could build a new storage business model
The company sees its pilot to deploy mobile batteries to stressed parts of the grid as a test of market models for utilities and vendors alike
Consultants and academics have been saying for a while that multiple revenue streams are key to the economics of an energy storage projects.
Consolidated Edison is testing that idea with an innovative real world application.
ConEd, in partnership with NRG Energy, has embarked on a $7.6 million, 1 MW, 4 MWh demonstration storage project in New York City that will “serve many needs with one asset,” according to Adrienne Lalle at ConEd, who is the manager of Storage On Demand project.
The project will also test another concept — mobile storage. ConEd’s single asset will have wheels, multiple sets of wheels. The batteries, which are being provided by LG Chem, will be housed on two tractor trailer trucks. A third truck will house the electrical switchgear.
Greensmith Energy is acting as the integration manager and providing the energy management system.
When the project is up and running – it is expected to launch by mid-year and run until first-quarter 2021 – ConEd will be able to deploy the batteries where they are needed to relieve distribution system constraints, most likely during the summer when peak load in New York City spikes.
ConEd aims to use the batteries to shave peak demand and lower distribution costs by moving the truck-loaded batteries to where they are needed, either for pre-determined periods during the peak load season or in response to unanticipated “contingency events.”
Once in place, ConEd anticipates they will stay at a single location for weeks at a time or even for several months.
At first, the batteries will need two-and-a-half days of notice for deployment, but ConEd and NRG intend to shrink that lead time as they gain experience with the project so that they can use the batteries to respond to emergencies.
When not deployed, the batteries will live at NRG’s Astoria generating plant the New York City’s borough of Queens. From Astoria, NRG will be responsible for managing the project’s participation in the New York ISO’s wholesale electricity market, which it will do through its Distributed Asset Real-Time Operations Desk, or dDesk.
The partners intend to bid the batteries into NYISO’s energy ancillary services market. NRG will also be responsible for working with NYISO and ConEd to enable the assets to participate in the wholesale market when they are deployed in the field.
NYISO’s current rules assume that a resource is stationary, so the partners anticipate that changes will have to be made to NYISO’s rules to allow mobile assets to participate, particularly in the capacity market.
The partners say that energy and ancillary service sales are “certainly possible,” but for revenue calculation purposes they are counting on capacity market sales only “at a later stage in project development.”
Those revenues are important to the project. They provide an income stream and a way to monetize some of the project’s other benefits. One of the benefits of the storage project to ConEd is that it would enable the utility company to defer investments in distribution and transmission assets.
Transmission and distribution upgrades typically are overbuilt relative to need. As ConEd points out in its proposal, solving a 200-kW system constraint during peak hours would require a 1,000-kW transformer. Deferring that investment could save millions of dollars.