Energy storage services firm Stem Inc. is developing an aggregated fleet of customer-sited energy storage operating in Texas.

In so doing, Austin Energy will offer its commercial customer’s energy storage options and help them reduce energy costs while simultaneously providing a reliable energy storage resource for the Austin Energy grid.

The project is one phase of a larger Austin Energy grant from the U.S. Department of Energy’s (DOE) Sustainable and Holistic Integration of Energy Storage and Solar Photovoltaics (SHINES) program. The program’s goal is to reduce the cost of electricity from combined solar power and storage projects to below $0.14/kWh.

In this eighth utility contract for Stem, the company is demonstrating how its aggregated platform can integrate solar and energy storage to increase grid performance and reliability and enable higher penetrations of solar PV. Austin Energy is using the Stem partnership to test new customer offerings that result in sustainable aggregation models.

Stem’s software-driven energy storage will reduce businesses’ energy costs by reducing their peak demand and providing them with real-time energy management and visualization tools. Where a business has on-site solar PV systems, Stem’s software and analytics tools will automatically manage those customers’ use of grid-supplied electricity against their solar production. For all customers in the network, Stem’s proprietary software will rapidly respond to spikes in electricity use, drawing on stored power to automatically reduce demand charge costs without requiring operational changes or manual input from the host.

Drawing on those same behind-the-meter energy storage systems, Austin Energy can call upon the systems to cost-effectively provide instant and dispatchable grid stability to address issues like solar generation variability and peak demand. Stem’s intelligent, cloud-based control platform incorporates weather forecasts, historical and real-time usage data to predict when electric use will peak at a given site. Reducing commercial peak demand helps improve local grid stability and distribution energy planning.

“The Austin SHINES project is another example of Austin Energy’s commitment to using innovative technology to increase reliability and customer value. This project will help Austin Energy learn more about the potential benefits of integrated distributed energy resources for broader deployment in the future, so we can maximize the value of solar and storage integration for our customers,” said Jackie Sargent, Austin Energy General Manager.

Initially, Austin Energy will use the fleet to test how rapidly the resources can respond to an aggregator’s signal to dispatch and provide grid response services. Over the longer-term, this model will illustrate how aggregated, customer-sited energy storage systems can help Austin Energy reduce costs associated with ERCOT coincident peaks, defer investment in substation upgrades, and provide clean, reliable power to its customers.

“Austin is a hub of sustainability and we are thrilled to be working with Austin Energy on this project,” said John Carrington, CEO of Stem. “We think all of Texas will be watching to see how aggregated energy storage can cost-effectively deliver multiple values to customers, utilities, and grid operators alike.”