Distributed energy resources (“DER”), such as EV chargers, rooftop solar systems and smart inverters are proving to be valuable not just to the customers who install those resources but to the utility companies which are traditionally responsible for setting up and running energy distribution networks.
BYOD, or bring-your-own device programs, are one way through which a convergence between distributed energy resources and utility grids is happening. Utility companies love this model because it gives them a way to avoid more costly options, such as setting up new utility lines to serve the increased demand for energy. Similarly, customers love the BYOD model because it allows individuals to retain control of how they use energy in their premises and yet they still retain the ability to sell any excess to the grid when the need arises.
EnergyHub, based in Brooklyn, New York, is one of the most significant players who are making use of the BYOD model. They are currently working with more than 40 utility companies, and those partners are pushing the concept to applications that hadn’t been thought of before.
For example, Alarm.com has marked itself out as a utility company which has encouraged people with grid-responsive electric vehicle chargers and behind-the-meter solar batteries to collaborate with utility companies in order to cut the cost of establishing new DER systems.
National Grid, another utility company working with EnergyHub, has also been at work on Rhode Island and in Massachusetts. The company pays its customers to give it access to the energy stored on their batteries each time demand for power spikes, especially on summer afternoons. The customers are paid approximately $400 for each kilowatt hour of energy that the utility company accesses from their energy storage devices, and the average annual cost for such tapped power is $2,000.
This program has been so successful on Rhode Island that regulators there have made it a permanent feature of the energy distribution system. The pilot program in Massachusetts is due to expire next year, and regulators there will consider whether to make the program permanent as well.
It was initially difficult to get battery manufacturers and vendors to accept their systems, primarily intended to store energy and work as backup systems, to be put to another use (providing supplemental power to the utility grid during peak demand events). However, persistent negotiations eventually got these players on board, and many more are signing up. The consent of the battery vendors also gave customers the assurance they needed that their systems wouldn’t be compromised by the added demand placed upon them by connecting them to the grid.
The way things are looking up, it wouldn’t be surprising if Tesla Inc. (NASDAQ: TSLA) and other major players in the EV sector started looking at the reciprocal relationship between utilities and customers as a major selling point for EVs.
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