Under a four-year contract beginning in 2020, Sunrun and OATI will send the energy from the residential systems to Hawaiian Electric Company’s (HECO) as called upon by the utility. The virtual power plant will provide peak demand shaving, on-demand reserve capacity and anciallary services, said Robert Harris, Sunrun’s director of policy.
The deal opens a new revenue stream for OATI and Sunrun — HECO will compensate them for managing the virtual power plant. The program also offers an example of the value that residential batteries can provide to both electricity consumers and the broader grid.
“This is the first time households in Hawaii can provide dispatchable power and electrical services to the broader electrical grid. Because solar and battery systems are distributed throughout the electrical grid, they can provide more resilient, reliable, and cost effective power then comparable ‘utility-sized’ systems,” Harris told Microgrid Knowledge.
In addition, HECO can avoid costly investments in traditional centralized energy generation and transmission infrastructure, Harris said.
Savings for Hawaiian Electric customers
OATI will provide the software necessary to integrate distributed energy resources (DERs) with the grid on O’ahu, form a virtual power plant and provide forecasting, dispatch and control services. OATI also is responsible for recruiting customers and registering grid-connected DERs. Existing and new Sunrun customers who sign up for the program will receive credits on their electricity bills for delivering the energy stored in their Brightbox battery systems to the grid.
“By establishing a clear revenue stream for demand response, HECO is enabling Sunrun to offer even more savings to customers for adopting solar and batteries. Brightbox customers will be directly compensated when they sign up with Sunrun to participate in the program. This will come in the form of monthly bill credits from HECO. We estimate this will be around $100-150/year credit for a typical customer,” Harris said.
The project is part of a distributed renewables-to-grid services market developed by HECO and OATI with the overarching goal of helping the utility achieve Hawaii’s goal of meeting 100% of its electricity needs with renewables by 2045. The Hawaii Public Utilities Commission approved the Grid Services Purchase Agreement between HECO and OATI in early September.
“Hawaiian Electric has made huge strides toward our renewable energy goals and will end this year achieving a renewable generation portfolio of 30%,” said Alan Oshima, HECO president and CEO. “This effort is a big step in accelerating the transition from fossil fuels to locally sourced clean energy resources. For customers, the benefits are simple: cleaner energy at lower prices.”
HECO in April awarded Minneapolis-based grid operations software-as-a-service specialist OATI the contract to manage distributed energy resources and lead a group of companies under the banner of the OATI Energy Alliance. Members of the OATI Energy Alliance, such as Sunrun, will collaborate to control behind-the-meter distributed assets, such as solar PV, battery systems, and grid-enabled hot water tanks.
The HECO group of utilities have just begun Hawaii’s largest renewable energy resources procurement effort with the aim to end use of coal and reduce reliance on imported oil for power generation, moving the state closer to its goal of using 100% renewable energy by 2045. The 1,000 residential solar-plus-storage systems will contribute toward realizing that goal.
“If Hawaii is to reach its clean energy goals, it will need a dynamic and flexible system that can adjust to demands quickly. This is a solid step in the direction of a 100% clean energy fleet,” Harris said.
Other landmark virtual power plant projects
The HECO and OATI project marks the third, large residential virtual power plant contract Sunrun has won recently. Earlier this year, Sunrun established a power industry first by winning a bid to bundle home solar and battery power as a source of energy capacity to regional transmission organization ISO New England.
In July, the East Bay Community Energy board of directors awarded Sunrun a landmark contract to help replace the jet-fuel Oakland Power Plant in Oakland, California, which is due to be retired, with networked, collectively managed home solar-plus-storage systems installed on low-income housing in West Oakland and Alameda County.
