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Distributed Energy Storage Systems Poised For Growth in the U.S.- Implications for Community Projects?

A coalition assembled by the National Alliance for Advanced Technology Batteries (NAATBatt) has issued a white paper that recommends the installation of up to 300 GWh of distributed energy storage (DES) systems around the country by 2022.

The coalition consists of 13 industrial companies and electric utilities, including General Motors Co., The Dow Chemical Co. and Duke Energy.

DES systems reduce blackouts and brownouts, permit greater use of variable, renewable energy resources such as wind and solar, and help to reduce dependence on imported petroleum by making electric vehicles (EVs) more affordable to consumers, according to the white paper. These systems can mitigate the impact of EVs and the charging infrastructure, as well as supply reliable and stable electric power for consumer charging needs.

In addition, such systems can help support reliable grid operations through ancillary services, including area regulation and voltage support, and can help reduce the frequency and duration of grid events, the paper notes.

Barriers to deployment

The principal hurdle to deploying DES systems and to realizing the national benefits such systems provide is that the regulation and payment for electricity distribution system infrastructure is, by design, a state and local matter, according to the paper.

Utilities and state regulators consider only benefits to local ratepayers in determining whether investments in distribution infrastructure are fair, reasonable and economic. This means that evaluation, while well suited for determining the merits of truly local infrastructure, undermines the economics of DES systems, which provide a significant part of their service benefits to ratepayers outside the immediate service territory in which they are deployed.

Because DES systems are installed on the distribution portion of the electric grid, local utility ratepayers must pay for all of the costs of DES deployment. However, those same ratepayers receive only a portion of the benefits of local DES systems, because many of the benefits accrue to persons outside the local service territory.

The white paper argues that a key factor in encouraging DES system deployments in the U.S. will be to develop a mechanism to compensate local electric utility customers who pay for DES systems.

In addition, barriers related to regulations, costs and operational experience also hinder the wide-scale implementation of DES in the U.S.

Although DES technology currently exists, few systems have been deployed, and electric utilities have little experience dealing with complex DES systems on the grid. The white paper points out that the way that DES systems are paid for discourages their deployment.

Substantial support is needed to ensure that energy storage and smart grid technology developed in the U.S. can be commercialized and deployed, the white paper argues. The challenges of deploying and innovating with existing technology must not be overshadowed by the drive to invent new technology.


To overcome these barriers, the white paper makes six recommendations that can advance the implementation of DES systems at the scale needed to support national energy policy objectives and to secure the U.S.’ competitive position in the global DES market.

NAATBatt’s recommendations include the following:

– Establish a coordinated program of geographically diverse, small and fast-to-implement demonstration projects that will help electric utilities to gain experience with DES systems, standardize their design and applications, and demonstrate their value proposition.

– Create a policy mechanism that will enable local electricity ratepayers to recover the “national interest value” of DES systems in which local ratepayers invest.

– Establish a coordinated nationwide approach to DES regulatory treatment that will permit DES system operators to be compensated for the full range of grid benefits they provide, and include standardized interconnection.

– Continue to coordinate with existing energy-storage standards-development process stakeholders and help inform the standardization of battery testing for grid applications.

– Continue to fund research, development and deployment to reduce DES costs, including cell chemistry, materials and manufacturing, packaging, thermal components, and balance-of-plant-related costs, such as power conversion, interconnection, communication, controls and protection.

– Implement a national outreach campaign to educate stakeholders about the benefits of DES systems.

The full report can be viewed here.

Source: Renew Grid (

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