Piloting community-scale energy storage systems in Minnesota

Jessica Hellmann: Thanks so much Lissa. First I’d like to acknowledge that I’m a very poor substitute for Akisha, but I'll do my very best to set some background for her work and why it is so important. Let’s set the stage for these two stellar speakers that we have today.

I know many people on this webinar probably have a good understanding about what energy storage is and why we're seeking to advance it. In particular it's an emerging option for residential and commercial customers. Why? Because we want backup power in the event of an outage or failure, but we also want to do that in a way that's not using diesel generators that are dirty and noisy and have adverse health impacts on communities. When renewable energy projects and storage systems are distributed and behind the meter, they give the people who possess them and use them greater control over their energy consumption and over energy flow more broadly, taking advantage of production when it's available and demand and price fluctuations over time, this provides a suite of values.

It's sometimes hard for individual households to invest in these solutions for themselves, but at the community scale, at the neighborhood or community level, it's possible for many individuals to come together to share those benefits and to share the expense of the investment. So it's a scale that is larger than the individual households, but much smaller than utility scale, and it aims to capture those benefits and keep them local to provide autonomy and independence and help people share the benefits and the costs.

There are a couple of important factors in how community-scale energy storage would be adopted in this sort of behind-the-meter way. This project was built to explore the cost of the batteries, how to manage them, how to facilitate integration, and how to capture and distribute values and costs, as well as choice in battery technology. Literally: What does it mean to adopt this technology at this scale and integrate it into the community? So we'll hear more there about available technologies for battery storage, electrochemical batteries, including lithium Ion, and newer technologies like vanadium redox flow batteries.

This project is composed of three sites here in Minnesota and Jamez and Ralph represent two of those sites. You'll hear about how each of these communities had a different reason for wanting to include battery storage at the community scale, from solar integration to stabilizing load to providing resiliency and backup power. Each site also has had to think about different battery technology and sizing and the necessary equipment and management systems. So Jamez and Ralph are the experts about each of those things.

I'll just flag in the beginning, I know there are a number of interesting challenges that have emerged during this project, including some increased costs that came along in the form of tariffs that were imposed by the Trump administration. And there were some pandemic-related stresses on the supply chain which presented real challenges. I know that Jamez and Ralph will share their adventures with those things along the way.

Jessica Hellmann: So I'd like to ask the two of you, Jamez and Ralph, to talk about your specific pilot. Maybe we could start with you, Jamez. I know that you're just about ready to install your battery. Can you talk about what the system is, how it’s configured, and what it’s for?

Jamez Staples: Thank you for this opportunity. I’ll start by setting some broader context for how this actually ties into what it is we're seeking to do on Plymouth Avenue, which is to integrate the latest and greatest technologies into an economically challenged community here in North Minneapolis. Acknowledging that renewable energy training programs are a bit far away—two hours away by transit one way—that’s how the emphasis of the training center came about, and all of these wonderful things around battery storage, solar, stormwater management, and all these other climate mitigation strategies at the site. We have installed 174 kilowatts [of solar] on the top of the training center this past year—around September—and we used PACE financing. Shout out to PACE for that. And then we were also in a queue of working with Jessica and the team at IonE around the idea of how we can tie storage into the solar system. We were awarded an LCCMR grant—Legislative Citizens Committee on Minnesota Resources—for these for these three storage projects.

The installation of the solar system itself was a training opportunity. It was our inaugural, our first installation of our own on site. And then tying in the battery storage system was critical. We're still in that process. We are not doing installation of the batteries ourselves, we have a contractor that we are working with for that. The goal here, for me, was not only to bring solar and battery storage and heat pumps to the community, but for the building itself to serve as a stem laboratory for both youth and adults to learn about what climate change is and how they can actually participate in the emerging sector of the economy and earn revenue. This is a space that's ever expanding, especially with the Biden administration.

We will be operational within the next two to three months for sure. For me, like I said, it's about bringing these technologies and showing the community how it works, but at the same time making it fully functional for them. How do we make sure that when there’s a power outage, like there was with the tornado in 2011, that there's a place for people to go safely and charge their cell phone batteries, make sure that they have somewhere that they can at least go indoors with lights and other essentials when the power is out.

In addition, because this is a part of a bigger strategy, we have a signed a letter of intent with the school district where we're going to be incorporating the microgrid and battery storage system down the road on three Minneapolis Public Schools buildings. It will ultimately be an expanded version of what we're doing here at the Training Center. How do we show them what this is on a micro scale and then show them how it works on the macro scale?

For us it's been it's been a great adventure, to say the least. We are excited to be a part of it, especially as people who still live in the community that it's focused specifically on. It’s helping not just my people, but people in the region at large, even people out of state that want to look at these projects as an opportunity to learn and see how they can replicate these things. We want to make sure that we are leading in that space. I am not sure if I answered the question, but I felt like I touched on a few different areas, so thank you.

Jessica Hellmann: Ralph you've been working with the Red Lake Nation, and you have another storage project underway. Maybe you could tell us about your particular application there and how the system is built, and what it's intended to do.

Ralph Jacobson: Sure, I want to flag something that Jamez said that I think really bears lifting up that we will talk about a little bit later. In a state like Minnesota where we really do not have an energy storage market, where we’re in the early adopter stage, how do we keep pushing the ball down the field, if I can use kind of a sports analogy? We need people to get their hands on it, get a chance to work with it, and get more people some experience with it

The Red Lake Band of Ojibwe has a commercial fishery. Red Lake has walleye. They depend on that fishery for a substantial amount of the income for the tribe. They sell all over the Midwest. The burning of coal to the west in the coal plants in Montana and North Dakota, which creates the electricity that they use and that a lot of communities in Northern Minnesota use, puts mercury in the air, which then filters down into the waters of the Midwestern lakes. Slowly, over decades, the level of mercury is rising. They are very connected culturally and economically to the environment around them, and in which they live, and they see this long-term hazard and want to do something about it. That’s what's driving them—the pain of seeing their fishery being degraded by mercury. So they want to move away from coal as quickly as possible.

Here's a community that's coming back from near genocide 150 years ago, and they don't have a lot of resources to work with. That's probably going to be changing during the Biden administration—there's a lot of money coming down through DOE and other channels. About four years ago they were talking about getting started working with solar, and they really view it as a platform for economic development—that if people in the tribe can learn about solar and  go up the skill ladder that there's a lot of job potential there for people in the tribe, a lot of economic development opportunity.

The first thing we did was make an ambitious plan for putting solar on a dozen buildings in the community. This is a little bit different community scale, it’s the largest buildings where the solar is going to go first—government buildings, schools, casinos.

The utility told us right away when we met with them that they needed to know about what the tribe was planning to avoid a train wreck down the line. They also said right away that the tribe could not put any power back on the grid, that the utility buys power from their supplier, a block of coal power from Montana 24/7, and they typically have a chunk of unsold power in the middle of the day. Solar is most productive in the middle of the day, right when the utility really couldn't use it. So right from the get go it was clear that we needed to keep it behind the meter, which created the use case for storage for the tribe. If the plan is to use a lot of solar, let's say to get beyond 20-25% of their loads to target 50-75% of daily loads, they were going to have to store a lot of the power that comes in during the day and keep it behind the meter. That's been the driver for what's going to be distributed storage coupled with solar.

The tribe actually hopes that as these are deployed and the buildings have operational solar and storage, that they will actually be able to generate some business to business relationships with the utility and build a better relationship, because they can sell grid services with that storage. So that's one of the more tantalizing opportunities out in the future.

I wanted to also just mentioned that we chose the vanadium redox flow battery for the building use cases here, because Ellen Anderson who had a big hand in doing this was very interested in seeing some other battery chemistries applied where appropriate. Lithium chemistries are really going down the cost curve much more quickly than all the other chemistries because of the electric vehicle market. As it grows, there is a mass market for lithium chemistries and there really isn't a mass market for the other chemistries. But here we had the tribe, which is going to be doing a dozen commercial-scale energy storage systems coupled with solar, and so it seemed like this is a good opportunity for an early adopter situation, the tribe as early adopter.

Vanadium flow is one of the best chemistries for backup power, so at the Government Center it's going to be backing up the power supply there. They experience a lot of very short duration, but impactful power outages because they're at the end of the line of the Beltrami system. The second in the series of 12 projects that we’re installing is at the Workforce Development Center. This system will be set to the first use case that I talked about, which is the ability to use a lot more solar and keep it behind the meter.

Lissa Pawlisch: Thank you to all of you for setting the stage for what the pilot was about and for really getting into more of the place-based specifics behind why we are doing this—what is the motivation, what are we hoping to get out of it. What the actual use case is for each project is really important, I have heard you all talk about that. Why you are doing storage matters a lot in terms of what you install and how you set it up.

Lissa Pawlisch: What does workforce development need to look like? Jamez, you started to tee that up, but say a little bit more specifically about what you see as training needs to get energy storage ready for prime time in Minnesota.

Jamez Staples: First and foremost, people need to understand what storage is, how it works, and what the significance of it actually is. Once you start to understand that and then tie it to a career pathway in the clean energy space, then you can start to broaden out to where you start and then where you finish. 

I also think it’s imperative that the industry be more diverse. And the transition needs to be equitable. I think you need the newest technology to be deployed in some of the most economically challenged communities first, because that starts to change the narrative around—what the opportunity looks like. Bending that cost curve downward will start to happen, but for now if we could find ways to subsidize systems with public resources, then when the costs are going down it's more adaptable for other entities that are more fluid. That’s why I think these first pilots should happen in these communities.

As far as workforce goes, whether you're a younger person or an older person, I think it's imperative that there's a pathway. You may want to start with battery storage, you may want to start with solar, you may want to start with heat pumps. But showing them how it all fits together it's imperative. You don’t need to now all things about energy, but you need to know where you want to start and where you want to finish, and at least creating that pathway, and that pipeline—from the K-12 public school system to the Community college technical space and all the way up to the university or the other colleges that are out there. So I mean it's a mixed bag about how we get there, but I think it's important that it looks and feels organic.

Lissa Pawlisch: Jamez talked about designing with intentionality so that we work with people who need it most, first. Ralph, having watched how solar has developed, what are some lessons learned for how we can do it differently with storage? Maybe even just say something about how similar solar and storage are.

Ralph Jacobson: In terms of workforce development, first of all, just to cover that: With the tribe we're looking at not only the boots on the ground, people who are installing. Their workforce development plan is pretty ambitious at Red Lake. They're talking about forming a tribal utility so that as our financing plan comes to fruition and these systems are passed into the hands and ownership of the tribe, they're going to own these energy producing assets just like a utility. There has to be a cadre of people who understand what to do with that if they're going to actually have relationships with other utilities. So when you think of all the skill sets, that’s welding, electrical, bookkeeping, and all the things that utility executives deal with contracts—that's the kind of stuff that can be taught at the Red Lake Nation College. The pantheon of skill sets that revolve around that ownership is the most exciting part of economic development up there.

The second question you asked was whether solar and storage are analogous. I would say that storage is really a different animal. For one thing, it's dispatchable, and so it really needs to be treated as a utility asset. You can store solar power, you can store wind, then you can use it in a variety of use cases. Looking at the places where there are storage markets, there's pain that has driven good policy and good programs. In each case and in Massachusetts and New York and elsewhere in New England, that has also been partnered with the deregulation of the utility industry so that at any level the players are more agnostic about where their power comes from. It’s more about meeting their greenhouse gas reduction goals and about the price and getting their financing together. An example of the pain was a lot of congestion on the grid and a moratorium on new gas lines going through the New York metro area, so every new development on Long Island had to go all electric, no more gas. Solar and storage fit into that scenario very well, and so they quickly developed a market there. I don't wish upon Minnesota any of that kind of pain, but if we can focus on the use cases that can be valued highly by utilities and ISOs enough to create higher revenue streams then price doesn't matter so much.

Lissa Pawlisch: Okay, I know Jessica wants to come back to this conversation to talk about the levers that we can think about in Minnesota, but let me ask you a couple rapid fire questions. Jamez, there is a clarifying question about whether your batteries are being used for demand peak shaving or as virtual power plants, or both. Can you quickly answer that one?

Jamez Staples: Both. Obviously power is the most expensive. We want to power cycle those batteries on and off at those peak power production moments to shave off peak costs. For the virtual power plant, we have five different batteries, they will operate as their own individual houses connected to a quarter of the solar array that's on the building. So they will each have their own individual battery that will be charged and operate as if it were somewhere else in the community, and be able to do peer-to-peer exchanges. 

Lissa Pawlisch: Good, thanks. Okay, Ralph, really seriously briefly: advantages disadvantages lithium ion and vanadium flow.

Ralph Jacobson: Lithium is cheaper for short-term storage but gets expensive for longer durations. Vanadium is more appropriate for fixed building applications and is less of a fire hazard.

Jessica Hellmann: Jamez mentioned earlier about being a leader and leading from North Minneapolis. I think of both of you in this project and in your communities as exemplars and leaders, but maybe someday you won't be. You will look back and say you were the trailblazers. What needs to change so that what you're doing isn't so remarkable, to make it mainstream?

Jamez Staples: I think we need to see more investment in these kinds of projects and have them happen more frequently. And again, I think that these investments should be made in economically challenged communities. Be it battery storage, electric vehicles, electric vehicle infrastructure, subsidizing the cost of acquisition of PV for economically challenged communities. On top of that, our city is fairly dense. We need to be figuring out how to incorporate more heat pumps and things like that in a centralized location in the alley so that more people can tie in directly to those heat pumps systems. Shout out to Darcy Solutions who are cultivating that technology.

And to get there, we need to see that this federal stimulus money coming down the pipeline be targeted 40% to economically challenged communities like they say it is. I want to see the same thing around workforce. There's a lot of talk. I had a lot of people tell me a lot of things along the 7.5 year journey I’ve been on with this Training Center. You'd be surprised how many people actually show up when it's time to go to the dance. I’ll let Ralph take it from there.

Ralph Jacobson: One of the things that is really going to enable Red Lake to move into the position of the tribal utility that they envision is connectivity. So although we like to think that having our means of power production from the sun is going to make us independent, it really makes us want to be more connected than ever. Red Lake just got a grant to really get that connectivity between isolated parts of the reservation and all the buildings. It's not like a typical Main Street of a city where you have a Main Street and a lot of buildings. It's very spread out. They don't want to keep it that way, and so the connectivity allows everything to talk to everything else. That's going to be a huge enabler for smart grid, for being able to control storage, for being able to implement the virtual power plants—getting all of the storage systems and devices to be able to work together to provide a function into the wholesale grid. Or to meet demand challenge that arise

Lissa Pawlisch: Can you say a little bit about how much these systems cost?

Jamez Staples: I don't have the numbers in front of me, but our battery costs right around $55,000 for these five batteries. So it's up there, but at the same time, we have to consider the benefits and the grid services. We also are putting a heavy emphasis on energy efficiency. At some point the costs will start going down, and it will we get broader adoption.

Ralph Jacobson: You know something that I wanted to say is that Minnesota is flyover country for most suppliers of storage equipment in the modern mature markets, because here we are in the middle of the continent for somebody who does most of the business in California or New York or Massachusetts. More tech support is needed for an energy storage system and they're reluctant to sell a one-off. What we thought was if the University of Minnesota Morris bought two, Red Lake has one at the Government Center and one at the Workforce Development Center, the critical mass could make it so the supplier could justify spending some company resources supporting this. You know what happens when they stop supporting software in your computer, then you have to go buy something new. Well, we want to make sure that we have robust support for the controls and the batteries as we go up our learning curves and are understanding how they work.

Lissa Pawlisch: Upfront costs are one thing, but then there’s maintenance and controls and ancillary services. Can you speak a little bit about that?

Ralph Jacobson: The first thing you mentioned were upfront costs. If you look at a lithium ion battery set, that might need to be replaced 1-3 times in a 25 year contract period. Flow batteries, which are like a swimming pool with electrodes and an electrolyte solution. Maybe that's a system that is only installed once, but then you replace the fluid in it, or replace the some of the components in it, and so the lifecycle cost might be more comfortable.

Jamez Staples: So I'd like to back that up with the idea that these are pilots right, we are within the technological cycle. I think we need to be cognizant of the idea that where we are today is not where we'll be in 10 years, so we need to be preparing mentally and even physically for the infrastructure improvements that will take place. Look at what the cost of solar was 10 years ago—the cost of solar dropped 80% in that time. So we need to be forward thinking, we need to be thinking about what's happened in the past, where we are today, and how we can lean forward. And that's what I encourage all the utilities, in addition to people like myself, Ralph, the University, and other entities that are exploring the idea of getting involved with storage and all the other technologies that are out there.

The same thing with the workforce, if we don't start moving forward on getting the next generation and the existing generation to prepare for the next iteration of technology, we will always be stagnant. We're watching other countries bypass us with all these new innovative technologies and things that they're doing in the workforce. You go over to Germany and the kids at the high school level are being prepared for a career pathway in clean energy if they choose to exercise it or not. So we need to be doing the same.

Lissa Pawlisch: As you have all demonstrated, we have an opportunity right now that we can see and that is part of our energy future. We are already at time and we could go for hours. I want to just say thank you so much, Jamez and Ralph and Jessica. I know we always wish Akisha had been here too, and we are looking forward to having her back in June, when we have another longer session to dig into specific energy storage opportunities with case studies and use cases to start to really think about your own projects.