arri018 in (43) How might storage orchestration markets evolve? | Linkedin ° OQ» eacthate FCAS Wholesale Dispatch © vy Storage Orchestration ! i“ © & i Battery Control Incentives Location Battery Health How might storage orchestration markets evolve? + Fotow @eanee 2articles xe Whilst its very early days for behind the meter storage there is already a lot of activity and imitiatives looking at how lar unison Atleast in the short term batteries remain relatively expensive and using them solely for At least in the short term batteries remain relatively expensive and using them solely for your mark, a a Batteries can do more than just store excess solar ener load on the distribution and transmission networks, If these services can be valued and owners of behind the meter storage can be remumerated for them it could help improve payback times owners of behind the meter storage can be remunerated for them it could help improve eo sey bese c ee be ec batteries, but it aso evoids construction and maintenance of undetutilised generation and distribution and trunsmission systems, (rohasiration Value Greaion - we ee frocicnte] [raaormuna] [Taare] [avec ] [Teen 1 wacie 7 I T esoging ne -nupsmaewlinkedin.com/pulsethow-mght-storage-orchestraion-markels-evolve-andrew-rogers!rk=v-feed 18arri018 ce (43) How might storage orchestration markets evolve? | Linkedin @ o se The following is a thought pivve that looks these aggregation or orchestration services might evolve. Tfollows a scenario planning some of the ways the markets and delivery of upproach of using the activity of considering possible future outeomes to aid in understanding and decision making in the present What is orchestration? For the purpose of this art centralised control ofa large number of behind the meter batter Tim considering orchestration to be the programmatic, The goal of this control isto maximise the value available from the use of the battery. Value is considered both from the grid perspective and locally from the buttery owners perspestive Services provided by storage orchestration First up let's consider the services that orchestrution can provide: Ler ‘gy market, When prices (and or exposure to them) When prices are low (negative) ice arbitrage in the wholesale ener ‘When prices are low (negative). 2, Ancillary services. Whilst the market is small (and thin} compared to wholesale ener battcries ean provide voltage and frequency stabilisction se 3, Network suppost At both the transmission and distribution level, orchestrated batteries ‘oul be used to reduce peak load (demand and supply} hence improving cap ity Faetor und network utilisation. Through ths, there is potential to reduce the cost of these services —_ Ss Local tariff arbitrage. With knowledge of home load profiles, local solar generation profiles, and energy pricing tariffs - the battery can be scheduled to operate so as te iin tho of ey cred fn tg Vale cn rat nino eee SSS the amount of solar self-consumption ean be maximised. 6, Battery health, The life of a battery is maximised by ensoring the ch palterns are friendly to the individual buttery type. Simple storage and sell-consumption eee sewed chic Pasa ze naps: linkedin.com/pulsethaw-might-storage-orchestration-markels-evolve-andrew-rogers/¥k=¥-feed 218arri018 (43) How might storage orchestration markets evolve? | Linkedin EB) c« ° © v provided by orchestration, the expectation 7. Power outage protection, Whilst not x servi of provision of it from the battery owner must be factored in to orchestration controllers Assumptions The hypothetical market constructs which follow rely om a number of core assumptions as follows {In onder to be price competitive with the provision of equivalent services from centralised generation, de aygroate value of servives provided by each individual battery will be relatively Low (in the order of hundreds of dollars per year). 2. The cost of enabling orchestcation for cach individual battery must be kept low to make orchestration commercially viable, Market competition will favour methods which: a) require no additional truck roll (ic, they're installed atthe same time as storage or other serviees), b) involve the least amount of onsite configuration, ¢) require no additions! hardware (e.g. they're embedded into existing devices such as storage or solar invertors) either a) froe 3. Intemet based communication must be used for control where the cost is (e.g. local wif), b) shared or absorbed by other servives, or ) very low cost. Concerns bout the uptime or reliability of such networks or protovols must be considered when evaluating the responsiveness and firmness of the aggregated resource, There will be a case for onboard is updated semi-regulatly through the Internet inverter) contre! that follows a semi-intelligent defbult program that 4. The demand side of the market (retailers, network service providers, market operators} will need to use web API's (software interface enabling communication between different actors) as a core communication method 5, The domestic Australian market whilst different is still very similar to other international markets. The tools and actors involved will likely operate across multiple international markets driven by cost efficiency. Hypothetical market constructs Concept A - Storage Vendor Platform = Tn this scenario, each storage vendor deploys an orchestration platform. * The platform provides native support to the vendor’ batteries including local device management # Retuilers, network service providers and murkot operators each publish theit requirements (e.g, preferences and bids via APIs, Since multiple storage platforms will xsl they do this to avoid having to develop separate integration services for each, + The storage vendor platform then continuously co-optimises against all of the impuis + Commercial relationships witl be negotiated between each of the storae vendor naps: linkedin.com/pulsethaw-mgh-storage-orchestration-markels-evolve-andrew-rogers/vk=v-foed 38arri018 in (43) How might storage orchestration markets evolve? | Linkedin ° omy * The battery owner accepts a financial offer from the storage vendor in turn giving them potmission to utilise the battery ‘Concept A - Storage Vendor Platform Tae Sheard een va ah Tete A Seage coat ine ota oten Sao d opto t estar ooner neta trate Teteoae ry oueratinte I Baty seerencete Concept B - DER Services Exchange Platform # Tn this scenario, an independent entity deploys a marketplace or exchange platform for aggregating the resources and commereial agreements of the demand and supply sides of the marvet + Rotuilers, nctwork service providers and market operators each publish their requirements via APTS * Buch battery is connceted to a storage controller platform provided either via the buttery vendor or a third party # The DER services exch then bid capacity whilst simultancously optimising for the battery owns platform co-optimises the demand side, storage controllers -ntpsumaew linkedin. com/pulsethow-mght-storage-orchestraion-markels-evolve-andrew-rogers!rk=v-feed 48arri018 in (43) How might storage orchestration markets evolve? | Linkedin oO per vaues acstange: 2 © * The battery owner accepts a financial offer from the storage vendor or DER services, exchange, in turn, giving them pormission to utilise the buttery, ‘Concept B - DER Servicas Exchange Platform waa Concept C - Retailer Operated Platform * Tn this scenario, cach individual energy retailer deploys their owa orchestration platform which integrates with the other actors, The platform co-optimises for each ofthe retailer and ctwork Servi scr mate ac serge comole jit ‘ous bt Seleee porn Provider (NSP) requirements then publishes « sot of opportunities which the storage vendor platform bids against whilst also optimis urbitrage for the battery health and battery owner tari + The battery owner accepts a financial offer from their retailer permission to ut e the buttery. ccontral of batteries w are in their customer base. Concept C - Retailer Operated Platforms -ntpsumaewlinkedin.com/pulsethaw-mghi-storage-orchestraion-markels-evolve-andrew-rogers!7rk=v-feed 58arri018 BB ce (43) How might storage orchestration markets evolve? | Linkedin ° Os esctivate Concept D - NSP Operated Platform This is the same as Concept C but simply reversing the positions of Rotailer and NSP in dhe construct Issues for consideration prompted by these scenarios 1. NSP requirements. In concepts A, B and C itis assumed that the NSP advertises its requirements via an APT and moltiple orchestrators respond to these requirements, A mechanism will be required to avoid duplicate fulfilment, 2. In eases where re 8, NSPs, storage ndors deploy their own orchestrator ~ could be intemnally developed or contracted to one or more specialist vendors. reasonable to expect that the role will exist for an ator that provides such platforms to domestic and intemational market participants, 3, NSP vs Retailer requirements balancing, Network constrzints which are currently ‘managed at a large seale level by AEMO will also need to be recognised in optimisation for retail requirements. For example, a significant wholesale ener unrestrained could ereate problematic localised nctwork constraints, The balancing requirement may create both physical and commercial constraints on end users. SS _—_—__—_——— integration will be required with AEMO’s dispatch engine (NEMDE). 5.NSP requirements, Information that the NSP may publish visits APT may include both constraints on and requests for load or generation as a function of locality and time to maintain service levels 6, Possible market behaviours, Left to its own devices I believe it's reasonable to expect some of the following outeames, some of which o ist already per the examples provided), a) Retailers develop platforms to integrate with storage vendors. b) Storage provided). a) Retailers develop platforms to integrate with storage vendors, b) Storage vendors to develop native orchestration platforms for their batteries which they offer ©) Storage vendors fo use income carned fiom orchestration to lower the cost of storage to consumers and hens inereuse demand d) Independent vendors te develop controllers und orchestration platforms for storage (e.g. Reposit, AMS, Autogrid, Enbala) naps: linkedin.com/pulsethaw-might-storage-orchestration-markels-evolve-andrew-rogers/¥k=¥-feedarri018 ce (43) How might storage orchestration markets evolve? | Linkedin ° OQ» eacthate tacasary ne Servives wit mMely ow coneoHiGa Hy Me HNN, A energy consume and produced is settled both in volume and price on the NEM. Ener ul this meter must currently dictate that every consumer site must have a market moter be tugged against a rotuler (the FRMP}, Whilst the consumer pays and receives be tagged against a retailer (the FRMP). Whilst the consumer pays and receives the underlying wholesale markets. The consumer can't direetly access value inthe a the t directly access value the wholesale market as function of the generation, and financial derivatives they bave in place. The value they can shace with their customers will henee vary accordingly “eretail market will allow them to choose From the consumers perspective, the comp, needs from a financial, product and service perspective. The ler that meets their needs from a financial, product and service perspective. The Ss are cul rently shared by all ener A exists. the envisaged platforms exist at scale, whilst consumers would continue to pay stent be gy Consumers On a cons ees as does a customer in a varying degrees us a function of location, local conditions and historic grid investment Is this workable at scale? 9, Whilst competition should solve for commercial remuneration of services in the retail market the same market forces de not exist in network service providers. Existing regulation already states that ifa price competitive solution exists to mect a requirement that would otherwi incur capital expenditure then it must be considered, Th prt though there is often a finan cial incentive for network operators te continue to avoid nnon-network solutions, As the market develops for orchestrated fleets of atteries its reasonable to expcet that they will become ineressingly competitive in the provision of though there is often a financial incentive for network operators to continue to avoid combcucing technology and becoming Distributed System Operators (DSO's) it's hard te onvisuge this shift occurring without regulatory change and pressure Baerss Pesew cd tas hhedule-able = > concentrated its plausible ut some poiat it may need to be IL. The hypothetical role of u DER services exchange platform atthe distribution level epicted in Concept B has similarities to the role already played by AEMO in the ‘generation and transmission level. Is this @ natural home for u such an exchange’ ‘The hypotetical role ofa DER services exchange platform atthe distribution lve ‘220008260 © 17 Comments -ntpsumaew linkedin. com/pulsethow-mght-storage-orchestraion-markels-evolve-andrew-rogers!rk=v-feed 18arri018 ce (42) How min storage orchestration markets eves? |Linkacn ° omy ple Ee oa ca Geet ae ree asad ey io my ed asst ang sore ie Rg |e Grate Aen oben fei ffsrt Cent Vetran Gres lace ow doy see mull scenarios plying ou in paral? I seems that a the moment thete te examples of allo these scenaris happening at ore, an een wondering hat pac tha Faseonthercl out presumed tsa tne of tention and ater ae yearsone scenario may trump others. Though atthe very leat, confusing fom an asset owns point sere Ihe Rely More from Andrew Rogers @ Andrew Rogers Marks nd Commercial ras Chil New Energy t AGL Energy | Fotow Can residential solar and storage play bigger role in the energy. Andrew Rogerson Linker -nupsifwaewlinkedin.com/pusethow-mght-storage-orchestration-markets-evolve-andrew-rogersN feed eoctvae aw