The Rise of Distributed Energy Storage Systems

In the age of up and coming distributed energy resources, one must put energy storage in the conversation.  While Solar PV may be the current breadwinner in many people’s minds, recent developments show the future for energy storage is bright. In October 2013, the California Public Utilities Commission approved a new mandate that requires Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric to add 1.3 gigawatts of energy storage by 2020. Paired with the recently re-established SGIP incentive, energy storage is poised to become a driving force in California in the coming years.

While it is early to attribute too many specific energy storage projects directly to the newly initiated mandate, energy storage companies such as Stem and Green Charge Networks are among the emerging start-ups that are focusing on reducing demand charges through a customer-side, behind-the-meter approach of distributed energy storage. Stem, Green Charge Networks, and Coda Energy have received notable recent funding within the past year, which has helped them develop zero-money down energy storage finance programs in order to incentivize adoption among industrial and commercial customers.

Keeping in tune with the general movement toward automation, Stem and Green Charge Networks are utilizing intelligent systems and advanced software analytics to automate demand reduction services in a seamless and non-disruptive manner to utilities and customers. Looking into the future, as smart grid investment continues to evolve, interoperability between regulatory entities, independent system operators, utilities, and their customers must occur in order to ensure the successful implementation of energy storage systems.  Recently, Stem has been actively participating in the California Independent System Operator (CAISO) market with distributed energy storage devices on the California grid. According to Will Fadrhonc, Stem’s Manager of Grid Solutions, “storage is inherently a grid asset… so you have to be able to participate in the wholesale market.” Thus, Stem’s participation in the CAISO market and other similar activities will be instrumental for the advancement of energy storage within the grid infrastructure in the future.