The municipal utility in Austin, Texas is trying to figure out how much money can be saved when solar and storage talk to each other.

Austin Energy will install its first large-scale batteries this year to join a growing fleet of solar generation, both central and distributed. With funding from the Department of Energy, the utility is syncing up the efforts around an integrated control system, to quantify the value added by coordinating the dispersed assets.

That will be more than an academic exercise, because Austin Energy is working toward 10 megawatts of distributed storage and 55 percent renewable energy by 2025. The grid implications of that surge will manifest more acutely in a smaller, municipal-sized service territory.

Kurt Stogdill, green building and sustainability manager for Austin Energy, pointed out that “200 megawatts [of] PV spread over 437 square miles is different from 200 megawatts spread over the whole of ERCOT."

The program started with a challenge to reach a 14 cents per kilowatt-hour levelized cost of energy for solar and energy storage. The utility won $4.3 million from the DOE's Sustainable and Holistic Integration of Energy Storage and Solar PV (SHINES) program, in addition to $1 million from the Texas Commission on Environmental Quality, to support the solar-plus-storage exploration.

To get the costs down that low, the team started looking at how to add value with intelligent controls, rather than leaving the distributed resources to operate independently.

Here’s what's planned so far for the fleet of DERs:

More than 1 megawatt of distributed solar in the Pecan Street clean energy housing development

2.5 megawatts of community solar to be built in east Austin by late fall

A 1.75-megawatt/3.2-megawatt-hour Younicos battery at the Pecan Street distribution feeder

A 1.5-megawatt/3-megawatt-hour LG Chem battery at the substation next to the community solar

Seven Stem battery systems sited on commercial properties

Six residential batteries to come at Pecan Street

Solar forecasting software from Clean Power Research

DER optimizer from Doosan Gridtech to assess supply and demand across the network and control the whole system. Austin Energy is testing multiple communications pathways (internet, cellular and AMI) to see how they perform for different applications.

This is technically a pilot project, but it's also a learning exercise carried out at scale across the city, serving real operational needs.

The Younicos battery will help smooth distribution in the solar-heavy Pecan Street neighborhood, to guide future deployments of large batteries elsewhere in the city. The LG Chem system will play a similar role integrating the large community solar array.

The Stem battery systems will be aggregated to test the value of distributed storage in Austin’s market conditions. Some of them will be optimized for the customer’s economic return, and others will be under direct utility control, to determine how the systems perform based on those settings. If the utility-controlled systems don't provide enough payback to the host customer, the utility will figure out a way to compensate them appropriately.

“From my perspective, the single biggest obstacle there is to the proliferation of storage -- price is one -- but the other is being to able to understand the value of the potential resource,” Stogdill said. “Right now, even the folks who are selling the storage systems sometimes can’t tell a utility or customer what it’s going to be worth to them.”

Modeling a single value stream, like demand shaving, is simple enough, he said. But layering on energy arbitrage and multiple other potential applications makes it complicated to predict. The data from this deployment will help the utility better predict the potential value of future storage deployments.

“We understand that other geographies are going to have different needs, and whatever we develop for Austin may not be perfect for somewhere else, but we want to make a framework that could apply somewhere else,” Stogdill added.

That replicability is top of mind for commercial storage powerhouse Stem as well. Slated to come on-line in 2018, this marks the company’s eighth utility contract, joining projects in California, Hawaii and New York, CEO John Carrington said. It’s the company’s first foray into Texas.

“SHINES has helped us in other areas before that have grown into bigger markets,” Carrington said. “When we get in a new location and prove the model, it just starts to grow. We expect the same in Texas.”

If it works in Austin, this model will be a strong candidate for adoption by the many other municipal utilities in Texas.

That’s significant, because Texas has so far played a minor role in the energy storage market, despite its massive energy-use profile.

The Lone Star State has just 140 kilowatts of residential storage, no installed commercial storage and less than 50 megawatts at utility-scale, according to GTM Research’s latest count. Austin's deployments alone will register on the statewide scale.