Method for Analyzing the Value of Distributed Energy Storage at the Facility Level – Step 1a: Current Energy Needs

Figure 1 shows the current step in the evaluation methodology…

Figure 1 Showing the current first step in the methodology for evaluating a facility level energy storage deployment.

The first step in evaluating a facility level energy storage deployment is to understand:

• The current power and energy consumption at the facility
• Any issues related to electricity currently experienced at the facility

For a first pass analysis, understanding the current power and energy consumption at the facility can usually be done by reviewing utility bills for the facility. Clearly the larger the interval of time for these utility bills, the better. One year of utility bills will provide some insight to seasonal variation in energy consumption and should be considered the minimum interval. Longer intervals would cover significant, sometimes one time, changes in the facility or trends that span multiple years.

In reviewing the electricity bills it is important to understand the different components of the bill. These components, which are often not seen in a household electric bill, result from  the relatively large power and energy requirements of many facilities. These components also reflect the utility’s desire to incentivize facilities towards the most profitable, ideal and efficient scenario for a grid utility: the (currently unrealistic) ideal where electric demand remains constant with no variation. Utilities employ two components (or billing schemes) for larger, business customers in an attempt to discourage unpredictable consumption with significant time wise variation in power demand. These components include:

1. Demand Charge - measured in units of $/kW, the demand charge is assessed by the highest demand of a customer (kW) in any 15 minute (or sometimes one hour) interval during a monthly billing cycle (NSTAR, 2013) & (Baxter, 2012). This charge is levied even if there is only one such interval in the billing cycle. In many instances, the demand charge ($/kW) will rival the consumption charge ($/kWh) applied during a billing cycle. Clearly the demand charge is meant to provide an incentive for the facility to avoid large, disruptive spikes in their power consumption. A utility must maintain large, costly power generation assets that are often unused, spinning or idle in anticipation of power spikes. It is important to note that the application of a demand charge is made possible through constant (or short interval) metering of the facility’s electricity demand. This constant metering is a unique characteristic of a large consuming facility’s electric bill. It provides a high level of granularity (uncommon in household bills) that facilitates analysis.
2. Peak/Off-Peak Energy  - The second component is to charge more for electricity consumed when demand is highest (i.e. the peak period) than the time period when demand is lowest (i.e. off peak period). The billing rates for peak and off-peak consumption are in units of $/kWh. The daily start and end time of the peak period varies from region to region, but they usually cover normal daytime business operating hours (when demand is highest)  (NSTAR, 2013).

An annual load profile for  a facility might look something like Figure 2. Looking at Figure 2, for this particular load profile, one can see seasonal variation in electricity consumption with a summertime peak for cooling and a smaller wintertime peak resulting from electrical equipment being engaged to support natural gas fired heating. One can also see a weekly consumption pattern where a lack of occupancy and a forced roll back of equipment on weekends significantly reduces demand.

Figure 2 showing the peak minimum power consumption (KW) of a facility.

In this first pass analysis, the current load profile (KW and kWh over time) will serve as the baseline for measuring the changes predicted by deploying energy storage at the facility level. At this very early stage, one application of energy storage stands out has having great potential for a facility level deployment. That application is the behind the meter application of Demand Charge Management.

Works Cited

Baxter, R. (2012, November 28). Author, Energy Storage; a Nontechnical Guide. (M. Banta, Interviewer)

NSTAR. (2013). Billing Rights. Retrieved January 21, 2013, from NSTAR: http://www.nstar.com/residential/customer_information/billing_rights.asp