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June 24, 2013

Community Energy Storage

Executive Summary

The concept of community energy storage (CES) has captured the imagination of the growing ranks of stakeholders with interest in electricity storage (storage). It involves electric utility owned storage that is distributed, being located at the periphery of the utility distribution system, near end-users. The potential benefits of distributing the storage capacity rather than using one or a few large units can be significant. 

Although it is not a value proposition per se, CES embodies many attractive facets of the broader storage value proposition for the electricity grid and marketplace of the future; one that is smarter, more sustainable, more diverse and more distributed and modular. 

CES is especially important as an example of grid-connected and utility owned and operated distributed energy storage systems (DESS). DESSs are modular storage systems that are located at or near end-user homes and businesses. 

Another unique facet of CES is that, to some extent, the concept was developed as a way to characterize modular electricity storage in a way that gives it a “look and feel” that resembles conventional utility alternatives and equipment. The objective is to present storage as a mainstream alternative rather than a new, novel or even exotic concept for the future.


Community energy storage entails utility deployment of modular, distributed energy storage systems (DESS) at or near points in the utility distribution system that are close to residential and business end users. The genesis of the CES concept was investigations by American Electric Power (AEP), starting in about 2005, to evaluate the prospects for and merits of locating advanced sodium sulfur (NaS) battery storage, rated at about two MegaWatts (MW), at substations. An example is shown in Figure 1.  

Eventually, AEP added a different twist on the concept involving numerous much smaller units – rated at 25 kiloWatts (kW) for three hours, or 75 kiloWatt-hours (kWh) – that are distributed and located at or near end-user sites. So, instead of deploying one or two large battery systems with a power output of 2 MW at the utility substation the alternative is to deploy 80 individual systems, at or near end-user homes and businesses whose power output is 25 kW. An example is shown in Figure 2.  

AEP describes the approach as “a fleet of small distributed energy storage units connected to the secondary of transformers serving a few houses controlled together to provide feeder level benefits.” Special design attention was given to making the CES resemble conventional utility equipment (as shown in Figure 2).  

One notable advantage of using many smaller units is “unit diversity.” Because there are so many units, it is unlikely that a substantial amount of CES power will be out-of-service at any time. Said another way, at any time one or maybe a few CESs may be out-of-service. That is helpful if reliability is especially important.  

CES is designed to “island” which means that when a localized portion of the distribution system becomes electrically isolated from the rest of the grid, CES can “pick up” the end-user demand and can serve that demand while there is stored energy. So, CES functions autonomously to provide “back-up” power when, for example, a traffic accident or a fallen tree. 

Though the actual value proposition for any specific CES deployment will vary significantly, important elements of the rationale for CES include: a) it can provide numerous benefits, b) it is a flexible solution for many existing and emerging utility needs, and c) to one extent or another, eventually, utility engineers will include modular distributed storage as a standard alternative in their growing toolkit of solutions and responses. Utilities’ conventional toolkit includes a fairly narrow set of solutions, primarily generators, transformers and wires. Before utility engineers can and will accept storage as a standard alternative, it is important to standardize utility specifications for the storage systems. (AEP published “Functional Specifications for CES” as an open source standard).  

CES is expected to provide numerous benefits in many possible combinations. It can serve as a robust, fast-responding and flexible alternative to generation. It can store low priced energy and use that energy when the price is high. CES can also be used to provide most types of “ancillary services” that are needed to keep the electrical grid stable and reliable. Depending on the location, CES may reduce the need for transmission and distribution (T&D) capacity because CES provides power locally, so less T&D equipment is needed to serve the local “peak demand.” CES can also improve the local electric service reliability and power quality. Of particular interest is CES used to maintain a stable voltage in the distribution system. 

CES can play an important role in the integration of renewable energy (RE) generation into the grid, including large scale/remote wind generation and distributed (e.g. rooftop) photovoltaics. CES addresses two notable RE generation integration challenges. First, CES can be charged with wind generation output, much of which occurs at night when the energy is not very valuable. In some circumstances,demand for energy is less than the amount being generated, so wind generation is “curtailed” (turned off) or the system operator must pay someone to take the energy. By charging at night, CES takes advantage of the time when transmission systems are less congested and more efficient. Second, CES can be used to manage localized “power quality” related challenges posed by high penetrations of photovoltaics systems, especially in residential areas. Of particular note are undesirable voltage fluctuations that occur such as those associated with rapid variations of output due to passing clouds.

Conclusions and Observations 

Although CES is not a value proposition per se, the concept is powerful. It entails use of a flexible, standardized, modular utility-owned solution to important existing and emerging challenges faced by utilities in the new electricity marketplace. It can be added as needed while providing numerous benefits. It is enabled by and enhances the value and effectiveness of the expanding suite of elements of the Smart Grid. CES or some variation of CES could well become a standard solution used by the electrical utility engineer of the future.

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