Puerto Rico has begun using batteries connected to residents’ rooftop solar panels to provide backup power for its grid, helping prevent blackouts and providing an alternative to peaking plants that burn fossil fuels. This could be the first step towards building one of the largest virtual power plants of its kind.
The year long pilot, launched late last year by Puerto Rico utility Luma Energy, will draw power from up to 6,500 households during energy shortages. It is part of a transformation effort to modernize a deteriorating grid and transition to clean energy.
If the program is successful, it could lead to a much larger virtual power plant that could make peaking plants, which run only when demand rises, unnecessary. “It could be very significant,” said Ben Hertz-Shargel, a network expert at research firm Wood Mackenzie, adding that if expanded to include all residential storage on the island, it would be larger than any residential virtual storage power would be. plant in North America.
Virtual power plants, or VPPs, are networks of distributed energy sources – such as home batteries, electric water heaters or heat pumps – that can help the grid. They can manage energy demand, such as by adjusting smart thermostats during peak times. Some can also supply power to the grid by drawing from home or even EV batteries.
The Department of Energy is promoting them as a way to address the expected growth in energy demand. Many states, incl Vermont, California and Texasalready have at least one type of VPP running, but about 20 states do not. Doubling the country’s VPP capacity by 2030 can meet 10 to 20 percent of its peak demand by then. By doing so, the US could also save as much as $10 billion annually by avoiding the need to build new infrastructure or power up peaking plants.
“Why spend money on more natural gas peaking plants when VPPs will save all Americans $10 billion a year and give the money to people who have already paid for smart water heaters, batteries and other smart devices?” Jigar Shah, head of the Department of Energy’s Office of Loan Programs, told Grist.
Puerto Rico is uniquely equipped for a residential storage VPP because nearly all of its rooftop solar arrays include at least one battery. After Hurricane Maria wiped out power across the archipelago In 2017, rooftop solar usage rates skyrocketed, and so did the demand for energy storage.
“Solar systems in Puerto Rico without batteries were no longer the product,” Javier Rúa-Jovet, chief policy officer at the Puerto Rico Solar and Energy Storage Association told Grist. “It had to be with batteries because the driver would be resilient.”
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More than 100,000 households now have rooftop solar, and the archipelago is installing around 4,000 new systems per month. Growth should accelerate even more with the help of new federal funding programs, including an effort underway by the Energy Department to spend $500 million on systems for vulnerable households.
All those panels already offset the archipelago’s power needs by about 600 megawatts — more than its largest coal-fired peak power plant generates, according to Rúa-Jovet. Using their batteries can do even more. “It’s like Puerto Rico has an untapped, 500-megawatt clean-power peaking plant right now,” he said.
The pilot program, which hopes to enroll 6,500 clients, can provide approximately 26 megawatts of power. By the end of December, nearly 2,000 households had signed up, according to a Luma representative, representing 12.4 MW of capacity.
Luma has tapped the VPP three times so far, including once last week. The frequency is expected to increase in the summer when temperatures are getting warmer.
The program is designed to address common fears about sharing energy and lingering distrust of Luma and the state-owned utility that preceded it. Customers can determine how much power they want to keep in their battery for their own reserve. They receive a notification before a shipment takes place, and can opt out if they want to keep their battery full.
There’s also a financial benefit for them – Luma pays solar suppliers $1.25 per kilowatt hour, and the companies split the revenue with their customers. Sonnen offers subscribers a flat annual rate of $750 with a possible year-end bonus, depending on how many of the batteries are shipped. Sunrun is customers pay $1 per kWh contributed.
“It’s three times the value of net metering,” Rúa-Jovet said, referring to the compensation customers receive when they sell solar energy to the utility. “That could mean a free battery for someone in a 10-year window.”
Hector Ríos lives with his wife in a two-bedroom house in Cabo Rojo on the southwest corner of Puerto Rico’s main island. Electricity prices are “out of control,” he said, sometimes exceeding $300 a month, and filling his diesel generator during blackouts costs about $25 a day.
Last year, Ríos got a Sunrun rooftop solar system with a Tesla Powerwall battery. He signed up for the energy sharing pilot in November. “It sounds like a great idea, but I’ll be honest with you, I don’t fully understand the concept,” he told Grist. “An opportunity to make money by selling generation of your battery seemed too good to be true.”
Ríos was part of its first energy sharing event in December. His battery was drawn to about 20 percent, which was where he set his minimum reserve. “Everything seemed to be going well,” he said, but added that he might adjust how much power he keeps to himself. “I can change it at any time, and will probably set it to 30 or 40, just to give myself a little more protection, and know that I can make it through the night if something happens.”
The value proposition for Puerto Ricans goes beyond savings on their energy bill, Rúa-Jovet said. “I think it goes to Puerto Rican pride. We’re doing something ground-breaking, and you’re preventing blackouts for everyone.”
Blake Richetta, the CEO of battery maker Sonnen USA, told Grist that what’s happening in Puerto Rico is “a good first step, but it’s literally a first step because we can do so much more.”
In Germany, where Sonnen is based, more than 144,000 of its home batteries are automatically deployed daily to help stabilize and strengthen the grid in real time. Richetta said that Puerto Rico, with all the enthusiasm surrounding the revolution of its energy system, is ready for a similarly advanced system.
“They may have the right blueprint for energy transition,” he said. “The energy IQ of Puerto Rico is going very high, and people are ready to make this leap forward.”
