Following SB Energy partnership, Stem seeks to leverage AI tech in ERCOT and CAISO
Stem is seeking to leverage its AI-based Athena energy storage management platform with more developers in ERCOT and CAISO, claiming a 30% higher return rate for developers utilizing the platform.
The platform was the basis of its recently announced 10 GWh partnership with SB Energy in November.
In an interview with NPM, Stem CEO John Carrington reiterated the company’s focus on these two markets, indicating that ERCOT and CAISO were the top two battery storage markets in the country. Carrington says energy management software is becoming increasingly important in these more saturated locations as developers deploy and manage larger battery portfolios.
Specifically, Carrington claims Athena optimization results in corporate customers saving 10% to 30% on monthly bills and increasing rates of return for energy storage developers by as much as 30%.
“The size and complexities involved in these markets require the power of AI to effectively manage and optimize renewable energy systems while factoring in regional variations that span increasing energy demands and weather conditions to state and federal incentives and regulations,” Carrington said.
In California, Carrington says Stem-managed projects and portfolios are increasingly being utilized to combat extreme weather. Most recently, he says Southern California Edison (SCE) deployed 60 MW of Athena-backed storage during the state’s winter 2023 “atmospheric river” pattern. Back in 2022, he says 86 MW was similarly deployed during the state’s September 2022 heatwave.
Carrington says these successes in California are critical when marketing the new tech to storage developers active in ERCOT, which has seen similarly extreme weather patterns and concern from the grid operator ahead of winter 2023.
“Our proven success in California informs the work we do in newer markets like ERCOT,” Carrington said.
Beyond extreme weather mitigation, Carrington highlights a couple of specific use cases for its energy management services in ERCOT. On the simpler side, he notes Athena is often used to monetize energy storage virtual power plants, which is still a common corporate contract structure in ERCOT for companies seeking to offset and reduce emissions.
But perhaps more notably, Carrington says Stem is increasingly working with developers in ERCOT seeking to avoid “significant backlogs” for projects larger than 10 MW thanks to what Carrington calls a “complicated and lengthy approval process.” To avoid this process, ERCOT has seen a marked rise in projects under the 10 MW threshold helmed by developers like HEN Infrastructure. Most recently, Carrington says Stem signed a collaboration agreement with Excelsior Energy Capital across four 9.9 MW projects in the state.
“Athena can help deploy and optimize smaller projects less than 10 MW that require less stringent approvals to help bring as many renewables online as possible to serve the market’s needs,” Carrington said.
Stem’s VP of Policy and Regulatory Affairs Darleen DeRosa are also seeing the potential state of charge requirements as proposed through ERCOT’s NPRR 1186 rule change as another way to leverage its Athena platform to developers seeking to comply with the requirements. Although DeRosa, who also spoke with NPM last month on the policy, is critical of the proposal overall, she says Athena may be useful for developers seeking to monitor and comply with the requirement if approved by the PUC of Texas (PUCT).
That said, it is increasingly up in the air whether NPRR 1186 will be approved as proposed by the state regulatory commission. The commission chose to defer a decision on the matter during its November 30 meeting after two commissioners publicly came out against the proposal. This comes even after the proposal had already been softened by the ERCOT board in October.
The next PUCT hearing is December 14, but as of Monday afternoon, NPRR 1186 was still not on the agenda. The next ERCOT board meeting will not be held until December 19, so that could push a PUCT decision back to its first meeting in the new year on January 18, 2024.
Sources close to the issue have indicated to NPM the proposal could be remanded by the PUCT back to ERCOT.
*This story was originally published exclusively for NPM subscribers last month.
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