Tesla and Advanced Microgrid Solutions, two companies at the forefront of disrupting the status quo in the energy industry, have teamed up in a large deal announced this week.
The duo will be putting Tesla batteries into buildings, which then act like small power plants. The buildings don’t actually generate power, but use the batteries as energy storage that can supply the electric grid with needed services.
News of the deal follows Tesla’s splashy unveiling in late April of its home and business energy storage products. Tesla is best known for its electric vehicles.
Advanced Microgrid Solutions (AMS) will install up to 500 MWh of Tesla batteries in its energy storage projects.
“Tesla’s focus on performance and design makes them the stand out technology choice for our projects,” said Susan Kennedy, CEO of AMS. “AMS’ projects require intelligent, powerful and scalable energy storage solutions. Tesla’s technology gives us the edge we are looking for.”
AMS has also signed a master agreement with global firm Black & Veatch for engineering and construction services.
This isn’t the first big deal for AMS. It was among nine firms selected in November by Southern California Edison in a solicitation that netted 2, 221 MW in long-term capacity contracts, more than 500 MW of that from ‘preferred resources’ – energy storage, demand response, energy efficiency and renewables. SCE awarded AMS a power purchase agreement to develop 50 MW of storage in what AMS is calling one of the world’s first grid-scale fleets of ‘hybrid-electric buildings.’
By combining energy storage and intelligent software, AMS makes buildings or manufacturing facilities into virtual power plants. This means in addition to its core function – acting as a commercial office building, for example – the facility also reduces demand on the local utility or grid. To create virtual power plants of scale, AMS is aggregating the energy capacity of the buildings.
As AMS describes its service, utilities benefit from the ability to defer distribution system upgrades, enhance reliability in areas with circuit overload, reduce greenhouse gas emissions, and integrate renewables. Meanwhile, building owners are able to reduce energy bills, enhance energy efficiency, and secure back-up generation.
“This is all about building resilience into the grid,” said Jackalyne Pfannenstiel, co-founder of AMS and former assistant secretary of the Navy. “Energy storage turns traditional demand response into firm, reliable capacity – it changes everything about the way the grid is operated.”
AMS’ first 10-MW Hybrid-Electric Building Project will be installed in Irvine, California in 2016. AMS will also sign battery supply agreements with additional technology providers.
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