N.Y. grid operator kicks off rules to boost battery storage

Source: By Arianna Skibell, E&E News reporter • Posted: Wednesday, September 9, 2020

New York’s grid operator has eliminated a key barrier for adding energy storage technologies to the power grid in an effort to meet the state’s ambitious climate targets.

The New York Independent System Operator yesterday announced that new rules are in effect to integrate energy storage resources such as batteries into its wholesale electricity markets, which are overseen by the Federal Energy Regulatory Commission.

“This is an exciting development for the state and consumers as we move toward meeting the mandates in the [Climate Leadership and Community Protection Act],” Rich Dewey, NYISO president and CEO, said in a statement.

New York’s aggressive climate law, enacted in 2019, mandates the state get 70% of its power from renewables by 2030 and eliminate nearly all greenhouse gas emissions by 2050.

“By allowing [energy storage resources] to fully participate in our markets, we open up new revenue streams that will attract greater private investment in these resources and spur innovation,” Dewey said.

The market rules come as a federal court recently upheld FERC’s Order No. 841, first issued in 2018, allowing distribution-level energy storage technologies to participate in regional wholesale markets, not just at the retail level.

FERC Chairman Neil Chatterjee praised the court’s decision, calling the order the “single most important act” the commission could take to “ensure a smooth transition to a clean energy future” (Energywire, July 14).

Chip Cannon, head of Akin Gump Strauss Hauer & Feld LLP’s energy regulation practice, said the order was a “landmark” one in that it opened additional revenue streams to energy storage resources.

“It’s extremely significant for the energy storage industry,” he said. “But it has taken almost 2 ½ years for the [grid operators] to revise their market rules and for FERC to accept them. NYISO is the first market through the gate in terms of complying with the requirements of Order No. 841.”

The nation’s six remaining regional grid operators have submitted their own market rule changes to FERC and are on track to implement them, Cannon said.

William Acker, executive director of New York Battery and Energy Storage Technology, called the technologies critical for New York to achieve its climate goals and enable renewable penetration into the grid.

“NYISO’s actions are an important first step to allow energy storage resources to participate in the wholesale markets,” he said in a statement.

NYISO said technologies like batteries and compressed air storage can help it meet demand, manage intermittent resources and potentially stay the need for costly transmission upgrades.

Adding energy storage “can also help improve the cost effectiveness of the system by charging during periods of low demand and low prices, and supplying energy to the grid during periods of high demand when prices typically rise,” NYISO spokesperson Zack Hutchins said.