Behind the Meter Applications

The applications of energy storage mentioned above generally serve large utility scale energy generation and distribution systems. These applications will be of critical importance if the future method of electricity generation and distribution is to follow the current model of the large centralized electric grid. The centralized large-scale generation model could also be supported by a distributed model of energy storage. Many of the challenges with large-scale energy storage (i.e. technical limitations, regulatory concerns, capital investment, land use etc.) can be circumvented by co-locating smaller scale energy storage systems with load sources (Wesoff, 2011). These applications are often referred to as “behind the meter” or “end-user” energy storage applications. Behind the meter applications provide benefits to grid operators by reducing demand and demand variability. End-users see benefits through reducing or modifying their reliance on the grid and also improving the reliability of their electricity supply.

An electric utility company profits from the consumption of its product, i.e. electricity. The most profitable, ideal and efficient scenario for a grid utility is one where electric demand remains predictable and constant with no variation. Utilities employ two billing schemes for larger, business customers in an attempt to discourage unpredictable consumption with significant time wise variation in power demand. The first billing scheme 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 second billing scheme is to apply a “demand charge” measured in units of $/kW (Baxter, 2012). The demand charge is assessed by the highest demand of a customer (kW) in any 15 minute (or sometimes one hour) interval during a monthly billing cycle (NSTAR, 2013). This charge is levied even if there is only one such interval in the billing cycle. In many instances, the demand charge ($/kW) will rival the consumption charge ($/kWh) applied during a billing cycle.

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

Wesoff, E. (2011, May 25). Stealthy Small-Scale Storage Startups. Retrieved December 16, 2012, from greentechgrid: http://www.greentechmedia.com/articles/read/stealthy-storage-startups