Serving more than 2,000 communities across the U.S., the task of transitioning to a clean energy economy rests in large part with Public Power – publicly-owned electric utilities that operate as divisions of local governments. According to the American Public Power Association, 10% of electricity generated in the U.S. is from public power facilities. These utilities have a history of innovation and leadership in clean energy – over 48 gigawatts of renewable generation has been built to serve Public Power customers. However, changes coming in the next several years will be seismic: a paradigm shift in how utilities operate, from a fossil-based centralized model with large generation and transmission, to a more decentralized model where energy supply is closer to demand, largely supplied by low- or no-carbon energy.
The future will come with distinct challenges, and many utilities are looking to smart energy storage to help. This article takes a look at those challenges – increasing costs, issues with renewable energy integration, America’s aging infrastructure, and how electric vehicle (EV) adoption will impact the grid.
Increasing costs
Much of the expense of a changing grid is borne by Public Power and their customers. Volatility in energy supply, generation capacity, and transmission costs have made it more difficult to provide the high service quality that Public Power is known for. Through Stem’s Athena® software and our team’s extensive knowledge and expertise in delivering 1.4+GWh across 950+ sites operating or contracted, we help utilities control costs with solutions such as peak shaving – both at transmission (coincident peak) and distribution levels – and energy arbitrage to take advantage of off-peak pricing.
Renewable energy integration
Public Power utilities are expected to integrate more than 8,000 MW of new wind and solar generation onto their systems through 2026. Due to its intermittent nature, low-cost, emissions-free energy can create operations issues for utilities – matching load with supply becomes more difficult. AI-driven battery storage can help alleviate these problems by co-optimizing renewables output with other storage services, such as wholesale market participation (where available) and shifting self-production to better match load, reducing market rate exposure for the consumer base.
Aging infrastructure
An analysis of U.S. Energy Information Administration data shows that around 150 GW of Public Power generating assets are at or beyond their typical operating life. Many of these are emissions-heavy thermal peaking units used infrequently when customer demand is highest. Energy storage optimized by software and integrated with utilities’ operations can be a great alternative to building new peaker plants. The ability to distribute this asset class around the grid allows for the same peak-supporting battery to also serve as “non-wires alternatives,” that can be deployed in less than a year (transmission and distribution can take much longer), is less costly than T&D, and avoids the typical burdensome visual impacts.
Electric vehicles
Public Power utilities play a critical role in the future of electric transportation. EV adoption by the public, businesses, and government is expected to accelerate in the coming years, driven by decreasing battery costs, robust purchase incentives, and improved range and charging station availability. The influx of EVs will result in an increased (and potentially more volatile) grid load that utilities must manage. A turnkey eMobility strategy for distributed energy resources and smart energy storage with Stem can be used to provide localized benefits that limit the burden EVs place on the grid and best serve the utility customer needs.
Ownership considerations
For utilities evaluating energy storage, a key decision is whether to self-own the battery and EV charging infrastructure or contract with a third-party owner. While third-party ownership often comes with less risk and responsibility, some utilities prefer to maintain more control over the asset. Stem works with Public Power utilities to identify the best ownership structure that meets their requirements.
Why Stem?
Stem operates the world’s largest digitally connected energy storage network across 40+ utility territories and within various ISO markets. Stem’s solutions help Public Power and utilities accelerate carbon neutral goals by integrating renewable energy assets. Our front-of-the-meter, utility-level programs empower utilities to control costs by mitigating peak impacts, and unlock new revenue streams such as those from wholesale markets. Storage value grows with distributed deployment strategies, like Stem-enabled shared customer behind-the-meter resources, which alleviate system pain-points and improve retail resilience. Plus, Stem’s Athena, the world’s most utilized, validated, and successful optimization software for distributed energy resources (DERs), maximizes energy storage and solar plus storage performance via industry-leading forecasting, optimization, and controls.
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