These are exciting times for front-of-meter (FTM) solar + storage projects. After initial deployment delays due to coronavirus, FTM markets are continuing to expand for storage – and in turn, increasing opportunities for storage to maximize value for FTM solar projects.
FTM projects face a host of challenges related to accessing and maximizing complex, variable revenue streams. Overcoming these is exactly why Stem developed AthenaTM, the best-in-class artificial intelligence (AI) behind our energy storage systems. For FTM projects, like Stem’s newly operational Blandford project in Massachusetts, Athena is the advanced operating system that ensures project success.
As the first storage provider to successfully launch a behind-the-meter (BTM) virtual power plant (VPP) and integrate it into CAISO wholesale markets, Stem brings market-leading expertise and insight to help developers realize successful projects. While the scale and location of FTM and BTM projects may be different, the core challenge is the same: optimizing multiple, variable storage value streams via the industry’s best AI.
Here are six ways Stem’s Athena AI drives value for FTM solar projects:
- Maximizes market revenues. Effective market participation depends on reliable, real-time communication with market operators and trading partners. After submitting an optimized bid, Athena dispatches assets in response to market signals and shares verified performance data with market operators so asset owners can receive payments. Stem’s AI is also constantly learning and improving its algorithms, in concert with market trading partners; last year, Athena improved year-on-year revenues to Stem customers by 15 percent.
- Optimizes bidding strategy. Bidding successfully into organized electricity markets is a multi-dimensional task that demands advanced software. Athena’s optimization engine generates multiple data forecasts and then overlays economic and operational constraints to produce energy bids that are optimized for any given moment in time. This exercise is crucial to project returns, as high bids risk non-selection while low bids leave money on the table.
- Automates program management and compliance. Market rules and contract requirements can change many times over a project’s lifetime, significantly altering how the asset generates revenue. Stem’s expert team continuously updates Athena with the latest information on incentives, compliance requirements, and tariffs so that projects can accommodate even drastic changes in operating regimes. In other words, Athena “future-proofs” projects against changes both anticipated and unforeseen.
- Enables optimal design. Designing successful projects requires sophisticated analysis of many project- and market-specific inputs. Athena’s optimization algorithms, combined with Stem’s project evaluation tools and market expertise, incorporate thousands of data points – including hourly solar production and market price forecasts as well as details about site operation, market structures, and financial inputs – to simulate how a project would perform throughout its life. The result is a comprehensive picture of project economics that helps developers identify the most promising projects and then structure them to maximize value.
- Supports financing and bankability. With unparalleled insight into how projects are likely to perform plus a constant adaptability that maximizes asset value, Athena supports successful project financing efforts. Athena can operate projects to meet a variety of different financial targets – such as the desired rate of return, the relative cost and value of CAPEX vs. OPEX, residual values, and risk profiles – ensuring that projects have the financial profile necessary to receive funding.
- Enhances storage lifecycle value. The value of maximizing battery performance over the project lifecycle speaks for itself. Leveraging insights gained from 10 million-plus runtime hours, Athena actively manages battery state-of-charge (SOC), cycling, and other operational factors to extend performance and delay degradation – sometimes well beyond initial manufacturer estimates – to the benefit of program and warranty compliance and overall project value.
Naturally, an AI is only as good as the team standing behind it. For years, Stem has pioneered storage in markets across North America and successfully advocated for policies and incentives that reward storage for the values it provides to customers and the grid. With nearly 10 years’ experience as an operator of storage projects, Stem currently provides services and solutions to partners at more than 1,000 sites across nine states and three countries.
For the aforementioned Blandford project, Stem worked hand-in-hand with our solar developer partner to successfully navigate a lengthy, complex application process. That project now delivers value to Massachusetts customers under the state’s MA SMART program, with full participation in ISO New England wholesale markets expected later this year.
The Blandford site represents the first 8MWh of 28MWh in large-scale storage projects co-sited with solar that Stem is developing with Syncarpha Capital throughout Massachusetts.
These are indeed exciting times for FTM projects, and we’ve barely scratched the surface of storage’s ability to achieve critical goals around capacity, reliability, non-wires alternatives, and peaker unit replacement. At Stem, we look forward to taking the next leg of the journey with our partners – and continuing to drive project value with the industry’s best AI.