Backyard Batteries Test Price Points, Biz Models

Backyard batteries could help stabilize neighborhood grids and give residents the juice to ride through blackouts and peak power spikes. But with batteries so expensive, how can utilities justify the expense?

AEP Ohio is planning to put some 80 refrigerator-sized battery units in the field to figure out just how customers will be able to use this kind of local backup power — and what they might be willing to pay for it. Over at my weekly update at GigaOm Pro (subscription required), I get into some of the variables that AEP and its business partners will be testing in the months and years to come to see if so-called community energy storage (CES) will be worth the investment.

AEP’s community energy storage project, funded by a $75 million grant from the Department of Energy, is among the first to test out ways that distributed batteries might be able to make energy storage economic at the household level. It isn’t the first kind of battery AEP has tried out — the utility was among the first in the country to try out massive, high-temperature sodium sulfur batteries to back up stressed-out sections of its grid.

But sodium sulfur batteries are the size of cargo containers and need to run at nearly 1,000 degrees Fahrenheit, which makes them unfriendly neighbors. Not only that, but they’re blunt instruments — they can balance a neighborhood feeder line as a whole, but not individual houses or offices on that feeder line.

AEP’s first test battery in this project, on the other hand, is now hooked up to the home of an AEP employee, Terri Flora, corporate communications director for AEP Ohio, told me in an interview last week. Chicago-based S&C Electric is installing, networking and controlling the 25-kilowatt lithium ion batteries, which are being built by Allentown, Pa.-based International Battery.

Three more adjacent homes will be connected later this month, she said, and eventually, the utility envisions putting 80 battery units, each about the size of a refrigerator, in backyards to back up three to four homes each. From there, AEP will be testing a variety of functions, starting with basic reliability assistance, she said.

First on the agenda is helping homes ride through power outages for an hour or two. That’s primarily a benefit to customers, though it could save the utility some money by letting it more efficiently prioritize outage repairs. The point is, AEP wants to concentrate on customers benefits right off the bat — prudent, perhaps, considering the customer backlashes we’ve seen to other smart grid projects that didn’t provide up-front customer benefits.

But once you’ve hooked up houses to ride through outages, why not use the same capability to power them through peak loads, shifting their full grid burden by an hour or two to help the utility ride through peak demand times? AEP is looking at that too, Flora said.

Further down the line, AEP wants the batteries to provide voltage and frequency stability to ease wear and tear on transformers and power lines — exactly the kind of distribution grid management S&C specializes in.

Beyond that, linking batteries to customers could allow them to buy power backup services or store power to use when prices spike, Flora noted. Those ideas are still on the drawing board — but given that Gehenna’s residents are also getting some of the 110,000 smart meters from Silver Spring Networks that AEP is deploying in the central Ohio region, connecting homes to batteries might be in the future, she said.

Come hear more about energy storage and the power grid at our Green:Net 2011 event on April 21, in San Francisco.

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Image courtesy of Reallyboring via Creative Commons license.