In this lecture, we will talk about the behind-the-meter application of battery storage. Behind-the-meter application of batteries refers to the stationary battery systems which are installed at the consumers’ location. This includes both residential and non-residential locations. Behind-the-meter application of batteries creates a value transfer from the utilities (mainly DSOs) to the end-users. Why? Let’s look at the services that batteries can provide at the behind-the-meter application to understand that. Generally speaking, batteries’ services at behind-the-meter can be categorised into
three main groups: • Self-consumption • Time-of-use shifting and • Backup power Let’s go through them one by one. Batteries could be used for self-consumption. This means that consumers can produce electricity using, for example, solar PV systems. Then they can use from that solar electricity, which is stored in their battery at the residential location, for their own purposes. In this case, often consumers are called prosumers. This service allows a transition from a centralised energy system to decentralised one and creates value for the end-users. Batteries installed at behind-the-meter can also be utilised for the purpose of time-of-use shifting. An example of this service is peak shaving.
Peak shaving means consumers can use their stored electricity during peak times and therefore, reduce their peak demand. Another service is energy arbitrage which means consumers can store electricity when the price of electricity is low and use that electricity when the price is higher. This for example is possible during peak demand. Of course, this service could be utilised only when dynamic pricing applies. Finally, batteries at behind-the-meter could be used as a backup power. This means using the stored electricity in batteries when there is an electricity shortage and black-out. So now that we know about the benefits of battery storage at behind-the-meter, let’s discuss the required technical characteristics. First of all, in this application batteries are installed at customers’ premises.
Therefore, the energy density of battery technologies is among the most influential characteristics. This characteristic is particularly crucial in dense (urban) areas because of smaller living spaces. Secondly, discharge duration is another important technical characteristic. For services handling or protecting against black-out and outage, the consumers require longer discharge duration. But note that for services such as peak shaving, they need that discharge duration is shorter. Third, safety of batteries is very important for the behind-the-meter application. Finally, the power rating is crucial because it influences consumers’ ability to perform services such as peak shaving. Currently, in the market, the most common storage technologies for the behind-the-meter application are batteries, especially Li-ion batteries.
For example, the Sonnen batteries or Tesla power wall are made of Li-ion battery. This technology allows consumers to perform services such as time shifting, energy arbitrage as well as self-consumption. Although the behind-the-meter application of battery storage has many benefits, its development faces several barriers. To mention some, the complexity of electricity bill charges does not allow end-users to fully understand the benefits of battery storage installed at their premises. The electricity bills include costs of electricity, tax and transportation. In Europe, through the years, cost of tax on transportation is increasing while the cost of electricity is decreasing. But many consumers are not aware of the details of their bills.
This lack of knowledge lowers consumers’ understanding of batteries’ role and potential at the behind-the-meter. Another barrier is related to the economic viability of battery storage at behind-the-meter. The current cost of batteries coupled with the design of the retail tariff does not allow consumers make financial profits. For example, the lack of dynamic pricing in the European electricity market lowers consumers’ interest to respond to electricity price changes and that is a barrier. Finally, end-users are not energy experts and accordingly their doubts about the lack of support and limited services for batteries lower their interests in these technologies. Now that we know about the main barriers, let’s discuss the drivers that push for a larger share of batteries at behind-the-meter.
To start, the first driver is the policies that support investments in renewable energy at consumers’ location. These policies also lead to a larger investment in the behind-the-meter battery storage. For example, In Germany, supportive policies (such as feed-in tariffs) have resulted in a large deployment of solar plus battery storage at residential locations. The second driver is the increasing consumers’ awareness about their electricity bills. Because such awareness will influence the financial motivation of consumers and increases their interest in battery storage. Third, public acceptance about the benefits of energy storage can contribute to a larger deployment of batteries as behind-the-meter.
For example, consumers could be informed about the influence of batteries on the renewable energy market or how they can enhance the consumers’ independency from the grid. Fourth, further clarification about the storage operators and their potential services using the behind-the-meter battery storage systems could motivate end users to engage in this market. Finally, technological innovation is crucial because it can lead to cost reduction and simultaneously improve batteries’ technical characteristics. To summarise, battery storage has many benefits for end-users. In this lecture, I discussed some of the services that batteries can provide at the behind-the-meter. I also explained the important characteristics of batteries at the behind-the meter and highlighted some of the drivers and barriers for this application.
I hope after this lesson you got some insight on how you can create value for yourself and the energy systems using the batteries that are installed at the behind-the-meter in your residential or commercial place.