FERC clarifies rule critical to storage, renewables

Source: Hannah Northey, E&E reporter • Posted: Monday, February 24, 2014

The Federal Energy Regulatory Commission yesterday proposed to clarify a complex rule critical to building a market for energy storage in the United States and supplemental grid services tied to reliability and integrating renewables.

The commission unanimously approved a draft to tweak Order 784, a rule that took effect last year requiring high-voltage interstate transmission operators to recognize the value of energy storage systems that can quickly and accurately dampen potentially dangerous disturbances in electrical frequencies.

FERC Commissioner Philip Moeller, a Republican, said the rule reflects the agency’s support for integrating renewables through transparent market mechanisms as opposed to mandates or subsidies.

“Although it will help the entire marketplace, frankly a lot of these changes are designed to help facilitate renewable and intermittent generation along with the newer technologies for faster frequency response or storage,” Moeller said. “I think the key takeaway is that this commission has been very amenable to trying to integrate intermittent resources.”

Regulators are trying to address increasing complications stemming from changes on the grid as more renewables — particularly distributed units — come online. Many of the concerns were outlined in a report the Electric Power Research Institute (EPRI) released earlier this month.

The commission last July issued Order 784, which allows storage systems to compete with traditional power generation that can’t react as quickly or accurately when the grid faces sudden imbalances. Energy storage fits into that category because it serves to supplement the grid by working in conjunction with wind and solar generators, taking up the slack when the wind dies down or the sun sets, for instance.

The Edison Electric Institute, Powerex Corp., WSPP Inc. and Southern California Edison Co. later asked for clarification. In response, FERC clarified yesterday that entities capable of delivering services “within the hour” can compete in the markets and provided guidance on when transmission providers must post information about data error.

The commission also announced it will hold a workshop April 22 to gather input about grid issues surrounding ancillary services, including the control of voltage and reactive power and regulations and frequency response services — all issues coming into play as the grid’s makeup changes.

FERC acting Chairwoman Cheryl LaFleur yesterday said the issues are indeed complex, but the rule — and the changes — reflects the agency changing with the times.

“Certainly with the increased reliance on renewable generation across so many areas of the country, I think ancillary services are sure to become an ever more important part of our energy services,” LaFleur said.

FERC Commissioner John Norris agreed. “This is where the engineers get to help us lawyers and economists figure this all out, and it gets pretty deep,” he said.