Distributed Energy Storage:
Can Tesla’s home battery help modernize Green Mountain Power’s grid?
An investor-owned utility must decide whether to partner with a disruptive technology leader to drive energy storage innovation.
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The case opens in June of 2015 with the Chief Innovation Executive of Green Mountain Power (GMP), Josh Castonguay, thinking through the merits and risks of an innovative new program he proposed to GMP’s CEO. GMP, an investor-owned utility in Vermont known in the industry for its strong customer focus, was on a mission to move toward a distributed, localized energy future. Castonguay had until the end of the week to decide whether to recommend that GMP move forward with a new partnership with Tesla in order to offer GMP’s residential customers the newly announced Powerwall Home Battery. The goal of the partnership was to provide GMP’s customers with a reliable source of backup power at the cutting edge of the consumer-facing energy industry, while allowing GMP to aggregate and leverage behind-the-meter storage capacity to provide services to the grid. In order to create these multi-stakeholder benefits, however, GMP needed at least some level of control over how much and when customer-sited batteries were charged and discharged. This kind of hybrid control system was relatively new and untested within the utility industry, meaning GMP would venture into uncharted territory if it moved forward with the partnership. The experimental, forward-looking nature of the proposed pilot pushed Castonguay to consider issues of operations, utility economics, early technology adoption, and disruption in a conservative industry. (Teaching guide is available upon request.)