Building the Electricity Grid of Tomorrow
Eguana is focused on developing distributed energy storage products.
Advanced energy storage, located at the site of consumption alongside on-site generation has long been seen as the key to unlocking the potential for renewable energy to deliver an increasing share of our electricity needs and to change the way we plan, build, and operate the power grid. Distributed energy storage products deliver benefits to the host but also to the grid at large through participation in Virtual Power Plants that aggregate the output from hundreds or thousands of systems to deliver services to the grid, right where it’s needed.
Changing the culture of a regulated incumbent industry is never easy, but several trends are converging to instigate this transition now:
Growth in rooftop solar energy
The exponential growth of rooftop solar energy since the turn of the millennium has both paved the way and provided the impetus for growth in distributed energy storage.
This trend has shown what is possible with distributed resources on the grid and greatly advanced interconnection standards around the world, but at the same time it is increasing the strain on local distribution networks in areas of high adoption. This is the first major change driving the urgency for distributed energy storage, but there are changes on the consumption side of the equation too.
Increased home electrification
In order to meet global climate goals, local and national governments are pushing for the end of fossil fuel consumption at home.
New residential developments are being planned to have only an electrical interconnection for energy supply, which means more strain on the local grid. Add home charging for electric vehicles on top of that and you have serious new demands being placed on our neglected distribution grids.
Our electricity grids have been built out over the past century and a half with very little change in technology or planning philosophy.
Early growth was funded by extending the grid network to previously unelectrified communities and expanding the customer base. In the past few decades growth and investment has stalled. Power plants are retiring as scheduled and are being replaced for the most part with renewable energy generation, but the transmission and distribution grids are suffering from chronic underinvestment even as energy usage patterns are putting more strain on this infrastructure that is failing more frequently in many areas.
Focus on resilience
Increased electrification and digitalization of the home makes reliable electricity supply more critical, and natural disasters are also highlighting the vulnerability of the grid.
Failing infrastructure is just one reason that consumers have begun to lose confidence in the utility grid to be able to provide reliable electricity supply, nowhere more so than in California where the grid is being pre-emptively shut down in periods of high fire danger to avoid the potential for the grid itself to start a wildfire. All of this means that demand for backup power solutions has increased dramatically, and once a homeowner has invested in energy storage, it’s a small step to optimize its use of onsite solar and to connect it to the internet and begin to deliver value back to the grid
Advanced communication networks
Over the past decade the proliferation of broadband networks to every home and the ensuing rise of the Internet of Things has provided a multitude of networking options for fleet aggregation.
One of the previously daunting aspects of deploying distributed energy storage and virtual power plants was solving the problem of fast, reliable, low cost communication to all of the devices in the network. Industry efforts are now focused on standards for interoperability and security to ensure that systems installed for backup purposes are available for aggregation into virtual power plants as opportunities arise.
Falling battery costs and increased battery production
Finally, and critically, lithium ion battery costs have fallen dramatically over the past decade, reducing the up-front cost of installing energy storage systems.
While comparisons are often made to the dramatic reduction in solar PV costs over the previous decade, an important distinction is that with solar PV these cost reductions were driven by the increasing deployment of grid connected solar itself. In the case of lithium ion battery costs, these reductions have been based on manufacturing investments made to support the rapidly growing electric vehicle market, so are a precursor to market growth in this case rather than its by-product. The future is coming and nothing can stop it.
Powering the Transition
Energy storage systems consist of three major components, the Battery, the Power Control System, and the Energy Management System. Energy storage systems can be linked together with other energy storage systems in Virtual Power Plants to deliver services to the grid.
How these four key technologies work together:
The device that actually stores the electrical energy. It is the highest cost component of the energy storage system and determines its useable life and most of its operating constraints.
Battery production is big business. Cost and reliability are key and the secret sauce is in the details of how the cells are manufactured, which happens in Gigafactories costing billions of dollars. Eguana does not produce battery cells but has partnered with leading global suppliers to integrate their products into our energy storage systems. Over the years, Eguana has integrated with almost every kind of battery in the market, from traditional lead-acid to vanadium redox flow batteries, and even salt water, liquid metal and other cutting-edge technologies — there isn’t a battery we can’t work with.
Lithium-ion battery technology has proven its superiority for electric vehicle applications and is currently receiving the vast majority of energy storage capacity investment, quickly moving it into the position of low-cost incumbent. Other technologies are still proving their worth in large scale, long duration energy storage applications, but the incumbency benefits combined with the high energy density and low maintenance of lithium-ion technology will make it difficult for competitors to displace lithium-ion battery technology in distributed energy storage applications.
The Power Control System
The heart of the energy storage system with multiple functions … and Eguana’s core technology.
Power controls start with the conversion of the battery’s DC power to the AC power that is compatible with the grid. They control the charge and discharge of the battery, requiring a fast response while protecting the battery from excessive wear. Power controls also provide the critical point of interconnection to the grid and are the subject of the most intensive regulatory testing. Eguana’s Power Control System was originally commercialized to support fuel cell virtual power plants and has been refined over the years in multiple applications to where it is today: a proven reliable platform that is globally certified and is integrated with a range of Battery and Energy Management System technologies.
The Energy Management System
The communication and supervisory control hub for the Energy Storage system.
The Energy Management System reads data from the energy meter, PV inverter and any other devices of interest on site to optimize the charge and discharge of the battery for the customer’s benefit. The Energy Management System also provides the secure connection to the cloud that is required to log operating data for display on the customer’s user interface app, and to participate in virtual power plants. Eguana has partnered with leading Energy Management System providers in each market in order to ensure optimization that is attuned to local market requirements and access to Virtual Power Plant opportunities in those markets.
Virtual Power Plants
Aggregated fleets of energy storage systems that can be deployed in concert to deliver services to the grid that are traditionally delivered by large generators.
These services include spinning reserve, capacity, demand response, frequency regulation, local voltage control and others. The aggregator will assess their available capacity and bid it into the market as a single resource. It’s then up to the aggregator to ensure that their fleet responds as required and they can validate that response. Virtual Power Plants are very disruptive to the traditional electricity market. Once an energy storage asset is deployed for one application, it has the flexibility to be repurposed to any other application meaning it will become increasingly difficult to justify the deployment of traditional assets like gas peaker plants that only serve one purpose. The more distributed energy storage systems are deployed, the more we will come to depend on them for grid stability.