This is a guest post by Robert Fares, a graduate student at The University of Texas at Austin researching the benefits of grid energy storage as part of Pecan Street Inc.’s ongoing smart grid demonstration project. Robert is contributing a series of guest posts discussing grid storage technologies, and how storage could benefit the electric grid. You can read the previous posts in his series here, here, and here. - David

In my last post, I discussed how transformer-level batteries could work to isolate clusters of houses during an outage to form microgrids powered by rooftop solar panels. A logical extension of this concept is the idea of residential energy storage: home-sized batteries that would enable a house with adequate solar to produce all of the electricity it needs and more. Houses could be connected in such a way that they balance electricity supply and demand in a market-like framework. Such a system would revolutionize the electric grid by transforming ordinary utility customers into producer-consumers or “prosumers,” each with the ability to act as a generator or consumer in the wider electricity marketplace.

While this may sound like the familiar idea of off-grid solar electricity, it is actually far from it. Rather than cumbersome and unreliable off-grid solar power systems, houses with solar panels and batteries would connect together as modules, and combine into a distributed, scalable, and robust power system. This futurist vision of an energy internet is appealing to any who value clean, reliable electricity and intelligent, economic power management. However, there are a number of barriers still standing in the way of a truly distributed grid.

One major barrier is the, to date, limited adoption of residential energy storage. In order for a distributed grid to function effectively, the intermittent supply of renewable energy must match the variable demand for electricity in real time. Energy storage is the best technology to act as a buffer between a variable electric supply and customer demand. However, public officials and utilities have struggled to build a value proposition for customer-owned energy storage.

For the most part, they’ve struggled because energy storage technologies are prohibitively expensive. At the same time, the success of rooftop photovoltaic panels over the past years indicates that an emerging technology can be successfully incentivized until economies of scale kick in. Widespread photovoltaics in Germany and large-scale Chinese manufacturing have given the photovoltaics market an industrial dynamic. It’s projected that unsubsidized photovoltaic markets might start to take off in 2013.

If the cost of storage technologies falls over the coming years, residential storage could follow the growth pattern of rooftop solar panels. But even if costs come down, storage won’t be an appealing technology for utilities unless it’s intelligently managed. In order to be valuable, energy storage must dynamically identify and then ameliorate inefficiencies in the grid system. Photovoltaic panels, on the other hand, produce value for the utility by just sitting on the roof and basking in sunshine. This distinction brings about the second grand challenge standing in the way of a truly distributed grid: intelligence.

In order for a modular grid to operate effectively, the generation, storage, and distribution of electricity in all nodes of the system must be intelligently managed in real time. Two major constraints must be met. First, energy prosumers must be compensated for the energy they produce in an equitable way. Second, the supply of electricity must be managed in such a way that the distributed system is resilient to faults. Unlike the present grid, a future grid might fail more like the Internet does today: a few sites slow down or come offline, but for the most part the internet stays available. Managing a system on the scale of the electric grid is an enormous challenge for artificial intelligence.

Already, communications standards like ZigBee and energy data standards like Green Button are facilitating development of a future, distributed, intelligent electric grid. Perhaps such an elaborate system will be able to boil down the complex questions facing grid operators into simple, plug-and-play commands for distributed energy resources. Such a system could unlock the hidden potential of emerging energy technologies, and help stem our reliance on conventional sources of electricity.

Photo credit: The figure in this post comes from the U.S. Department of Energy’s

Robert Fares is Ph.D. student in the Department of Mechanical Engineering at The University of Texas at Austin. As part of Pecan Street Inc.’s ongoing smart grid demonstration project, Robert’s research looks at how energy storage models can be used with large-scale data and optimization for economic operational management of battery energy storage. Robert hopes to develop novel operational methods and business models that help to integrate distributed energy generation and energy storage technologies with restructured electricity markets and retail electric tariffs. Through his research, he hopes to demonstrate the marketability and technical compatibility of these new technologies.