FERC request could boost energy storage

Source: Christa Marshall, E&E reporter • Posted: Wednesday, April 20, 2016

The Federal Energy Regulatory Commission is seeking input on “barriers” to energy storage in a move that could spur the technology, according to analysts.

FERC requested a response from independent system operators and regional transmission operators this week on whether obstacles for electricity storage in wholesale markets create “unfair and unreasonable” rates. The language signals that FERC is supportive of more energy storage, according to Yayoi Sekine, an analyst at Bloomberg New Energy Finance.

While the request focuses on grid storage, some “behind the meter” storage systems — like linked systems tied to rooftop photovoltaics — are also included in the scope, according to the Energy Storage Association. The commission cited all types of storage technologies that can receive electric energy from the grid and store it for later injection back to the grid.

Grid operators have until May 2 to comment on the measure, which directs them to outline regulations, market rules and tariffs that are in place for storage within their regions, Sekine explained. The request asks for specific examples of where electric storage resources are prohibited from participating in markets, and when RTO and ISO tariffs may be unclear “as to whether electric storage resources are eligible.”

“Staff seeks comment on potential tariff revisions in specific markets or general rules for all markets that could help clarify the eligibility of electric storage resources as market participants and remove any undue barriers,” the request states.

Sekine said the request is a “big deal.” To date, there often has been “little transparency” on how storage can participate in wholesale markets, she said. In some cases, it’s often not clear what storage regulations exist, as they can differ greatly from region to region.

“Oftentimes, if you want to connect to the grid as a stand-alone storage asset, there is often not necessarily a clear way for you to do so,” Sekine added.

Others say there needs to be a clearer definition of storage, which can be classified as either infrastructure or energy supply, among other things.

Jason Burwen, policy and advocacy director at the Energy Storage Association, said in a statement that many energy storage project developers have experienced difficulty accessing wholesale markets and that grid operations and markets were not originally designed with energy storage in mind. “Basically, FERC seems to be suggesting that they think there’s a very good chance that storage will be a part of ensuring least-cost solutions for reliability, for making sure markets are efficient. … In addition to this being a systematic review, which is good in itself, this indicates that FERC is leaning forward on this one,” Burwen said.

The association reported in March that the U.S. energy storage market surged 243 percent in 2015 — its best year of all time. Much of the 2015 growth was in the PJM Interconnection, the regional transmission organization that coordinates the movement of wholesale electricity through swaths of the East Coast and Midwest.

However, the technology still is in an emerging stage in the United States, Sekine said. She said she expected FERC to support additional regulation “that will accelerate the development of energy storage in slower-moving ISOs/RTOs,” such as the Midcontinent Independent System Operator in the Midwest.

A public comment period on the request will begin after May 2.