The Value of Bidirectional Flow: Connecting C&I Building Distributed Energy Resources and Grid Flexibility
The numbers are staggering when it comes to electricity use by the U.S. commercial and industrial sectors.
Every year, C&I customers combined consume close to 2,000 terawatt hours (TWh) of electricity, according to the federal Energy Information Administration’s recent figures, or approximately 50,000 trillion British thermal units. Thus, business buildings in the U.S. also emit close to 30 percent of the greenhouse gases released nationwide.
Let that roll around your cubicle for a bit. In addition to renewables and electric vehicles, smart building energy efficiency is a tremendous challenge and opportunity for the C&I Energy Transition if we’re ever going to get close to Net Zero.
Given these demand considerations, fears about grid resiliency and climate change have driven many C&I companies to invest in on-site microgrids combining renewables, battery storage and other generation assets.
And, by smartly managing those energy resources using the latest in software and grid communications, some of that power can be diverted both to help the grid maintain frequency and create revenue opportunities for the C&I customer in competitive markets.
EnergyTalk chatted in an email Q&A with Christie Dodge (pictured in image gallery), who is director of partner success at software firm Leap, whose platform enables distributed energy resources to access wholesale markets where that is possible. One of Leap’s recent successes was working with energy management firm GridPoint to help retail pharmacy chain Walgreens participate in demand response and other grid services through automated engagement in certain regional energy markets.
“The business earned revenue for its participation during day-to-day operations and contributed essential flexibility to the grid when it needed it,” Dodge said. “This capability proved to be crucial to the grid when California experienced blackouts in 2020. Leap was able to immediately work with GridPoint and the national pharmacy chain, along with other participants, to voluntarily curtail load and contribute to grid balancing efforts.”
Grid balancing—maintaining the system frequency with adequate power resources on the line despite reduction of other generation capacity like a cloudy, windless day or plant outage—should prove key to helping the C&I Energy Transition as intermittent renewables taking a stronger foothold in the U.S. generation portfolio.
As Dodge tells it, building owners can solve the challenges of sustainability efforts by smartly managing on-site distributed energy assets. Leap works with such C&I customers to access energy markets and reduce the environmental impact of operations.
These smart energy efforts with Leap, she estimated, enabled these partners to avoid the carbon dioxide equivalent of nearly 70,000 trees growing and absorbing CO2 for 10 years, and also off-set the equivalent of nearly 2,000 hours of gas-fired peaker plant production.
“Solar and storage, electric vehicle charging, building energy management technologies and smart thermostats can not only reduce carbon emissions but can also help lower energy bills and provide additional sources of revenue,” Dodge said.
C&I-scale energy storage systems clearly are key potential wholesale market participants for these services, she added. “Battery storage systems are valuable grid resources that lower energy costs, support renewable intermittency and provide resilience.”
The open, competitive electricity markets are drivers of this type of bidirectional energy economy, but not every grid operator is tapping into the value. The Federal Energy Regulatory Commission passed Order 2222 a few years back allowing of distributed energy resources to be aggregated and bid on the auction markets, but regional transmission and system operators are still developing action plans, in some cases.
“The goal for regulators and market participants alike should be to build a more dynamic market and make it easier for owners for distributed energy resources, not just large power plants, to become active grid participants,” she said. Combining these resources creates what is a called “the Virtual Power Plant,” and “by contributing to a VPP, distributed energy resources can support the grid in situations where energy supply struggles to meet demand.”
The success of Leap, GridPoint and other energy management firms is proof positive that the C&I Energy Transition benefits from both two-way conversations with other grid participants and bi-directional energy flows through the markets. Not every state or even grid system participates, of course.
“There is still room on the regulator side to open these opportunities further and in new markets,” Dodge said, “to allow the ever-growing number of distributed resources to contribute to the grid.”
Various forecasts predict the U.S. distributed energy market, including rooftop solar, battery storage and on-site gen-sets, to reach more than $100 billion in only three years.
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(Rod Walton, senior editor for EnergyTech, is a 14-year veteran of covering the energy industry both as a newspaper and trade journalist. He can reached at [email protected]).
