The battery has been installed at Kirkwall power station and the work already carried out in delivering the Active Network Management scheme.
The trial will investigate how large scale batteries can help get more renewable generation connected to the grid and also how it can effectively store excess renewable energy.
The technology used in the battery has been extensively proven, including a similar trial run by Mitsubishi in Nagasaki, Japan, and is being used in electric vehicles in the UK.
SHEPD head of commercial Mark Rough said, "This exciting trial will provide valuable research into the viability of using batteries for electricity storage."
"This is likely to become increasingly important to help balance the variable output from renewable forms of generation as we move to a largely decarbonised electricity generation mix," Rough added.
The battery was developed by Mitsubishi Power Systems Europe and Mitsubishi Heavy Industries.
