Why Software Is Critical To Energy Storage System Success

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By David Miller, Director of Business Development, Greensmith


GS_applications_illustrationAdvanced energy storage management software optimizes system performance, supports complex applications, and future-proofs energy storage systems against technological changes. Thus, software improves ROI and lowers system risk, helping energy storage proliferate and become a critical element of the modern grid.


According to GTM Research, 2015 is the “breakout year” for energy storage. It estimates that new installed capacity will grow 250%, from 61.9 megawatts in 2014 to an estimated 220 megawatts in 2015. As this growth shows, energy storage is no longer limited to pilot or demonstration projects. Today, energy storage systems are addressing significant grid quality challenges such as frequency regulation, ramp rate control, and renewable smoothing; and, in doing so, are generating compelling value for their owners.

As energy storage becomes a critical element of the modern grid, the software that manages these systems is an essential component for three reasons: (i) it ensures that the systems are able to achieve specific return on investment targets; (ii) it future-proofs the systems, allowing them to incorporate new technologies and implement new applications; and, perhaps most importantly, (iii) it optimizes the design, integration, operation, and management of these complex “systems of systems.”

There are two levels of software that manage the batteries in a battery-based storage system. First, there is the Battery Management System or BMS, which is the firmware that regulates basic operations for the hardware. The BMS is primarily used to protect the battery and keep it operating in its Safe Operating Area. The BMS monitors the battery’s voltage, temperature, state of health, state of charge, and current, while ensuring that all of these metrics stay at levels that do not damage the battery.

greensmith_containerSecond, there is the energy storage management software, which is often bundled with a bi-directional inverter. Basic versions of this type of software integrate the batteries with the various other hardware components, receive and respond to utility supervisory control and data acquisition (SCADA) systems, and provide basic data about the system.

While basic versions of energy storage management software served their purpose when the energy storage industry was still emerging, they are not sufficient for today’s mission-critical, multi-application energy storage systems. For this reason, most sophisticated owners of grid-scale energy storage systems now opt for advanced energy storage management software. This software can optimize system performance, prolong battery life expectancy, support complex applications, and integrate new technologies. The most sophisticated software platforms include fleet control (which enables owners to manage multiple distributed energy storage systems), operations and maintenance (O&M) support, and technology neutrality which provides the flexibility to integrate new types of batteries, thereby future-proofing the system against technological changes.

The importance of advanced energy storage management software is illustrated by the multiple roles that it plays over a grid-scale energy storage system’s lifecycle.

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During the design phase, advanced energy storage management software helps system designers identify the best components — including the battery, inverter, and balance of plant equipment — for the particular use case. Using component specs and real-world system data, the software provides simulations of a system’s performance over its lifetime. This type of simulation is critical, since batteries exhibit nuanced behavior depending on the application, inverter, and operating conditions. System designers can therefore evaluate not just the upfront capital expense costs, but also the total cost of ownership and levelized cost of energy (LCOE) – metrics that measure a system’s true return on investment.


Advanced energy storage management software enables rapid integration with utility SCADA systems and other distributed energy resources such as PV. In addition, because advanced energy storage management software communicates with a wide variety of components, it enables system owners to adopt a hardware agnostic approach, and choose the best battery and other technologies for the application. Deep integration with battery management systems allows advanced energy storage management software to intimately understand how best to operate the specific battery type. Finally, if better technologies emerge, system owners are not locked in – they can replace the old technologies with new technologies.


Advanced energy storage management software includes algorithms that optimize performance for a variety of applications and business requirements, monitor and manage the system’s battery and other components, and control a fleet of distributed energy resources. The most sophisticated software performs these functions while also ensuring the battery’s life expectancy, and maintaining battery warranty compliance. By improving the day-to-day operation, advanced energy storage management software can have a significant impact on the system’s ROI. For example, an energy storage system’s performance score in the PJM frequency regulation market affects the payments its owner receives.


In addition to improving day-to-day operations, advanced energy storage system software also helps owners manage these systems over time. While standard energy storage management software might have basic functions and interfaces, advanced software provides features such as 3D visualization, helping operators to easily identify opportunities for performance improvements, and to troubleshoot problems. In addition, advanced software uses an Internet of Things (IoT) approach to enable system owners to view and manage all the components in their energy storage system, including balance of plant equipment such as fire suppression and security systems. These capabilities can reduce truck rolls and human interventions, while improving system safety and reliability.

Advanced Software: Making Energy Storage an Essential Component of the Modern Grid

Advanced software is essential at all stages of planning and operating an energy storage system. It optimizes energy storage system performance, improves ROI, and reduces the risk that the system will suffer suboptimal performance or catastrophic failure. It enables system owners to manage a large number of energy storage systems located across a wide geographical territory. And, perhaps most importantly, it provides system owners with the flexibility they need to use their energy storage systems for several different applications, helping them to tap into multiple revenue streams and increase system return on investment. With these capabilities, advanced software enables energy storage to fully realize its potential, so that it can become one of the foundation stones in a new, cleaner, more distributed, and more efficient energy grid.

David_Miller_Greensmith_headshotAbout the Author: David Miller is Director for Business Development at Greensmith Energy. His focus is on energy storage market and application analysis. David began his career at Energy & Environmental Economics Inc., (E3) where he was a consultant to the Electric Power Research Institute on Li-ion energy storage market valuation and the California Public Utilities Commission for their Permanent Load Shifting cost-effectiveness proceeding. He received an MBA from Harvard Business School and a BA in Economics from Stanford.

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