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Title: Regulatory Policy and Markets for Energy Storage in North America

The last 5 years have been one of the most exciting times for the energy storage industry. We have seen significant advancements in the regulatory process to make accommodations for valuing and monetizing energy storage for what it provides to the grid. The most impactful regulatory decision for the energy storage industry has come from California, where the California Public Utilities Commission issued a decision that mandates procurement requirements of 1.325 GW for energy storage to 3 investor-own utilities in 4 stages: in 2014, 2016, 2018, and 2020. Furthermore, at the Federal level, FERC’s Order 755, requires the transmission operators to develop pay for performance tariffs for ancillary services. This has had direct impact on the market design of US competitive wholesale markets and the monetization of fast responding grid assets. While this order is technology neutral, it clearly plays into the fast-responding capability of energy storage technologies. Today PJM, CAISO, MISO, NYISO, and NE-ISO have implemented Order 755 and offer new tariff for regulation services based on pay-for-performance principles. Furthermore, FERC Order 784, issued in July 2013 requires transmission providers to consider speed and accuracy in determining the requirements for ancillary services. In November 2013, FERC issued Order 972,more » which revises the small generator interconnection agreement which declares energy storage as a power source. This order puts energy storage on par with existing generators. This paper will discuss the implementation of FERC’s Pay for Performance Regulation order at all ISOs in the U.S. under FERC regulatory authority (this excludes ERCOT). Also discussed will be the market impacts and overall impacts on the NERC regulation performance indexes. The paper will end with a discussion on the California and Ontario, Canada procurement mandates and the opportunity that it may present to the energy storage industry.« less
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Resource Type:
Journal Article
Resource Relation:
Journal Name: Proceedings of the IEEE, 102(7):1065-1072
Research Org:
Pacific Northwest National Laboratory (PNNL), Richland, WA (US)
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Country of Publication:
United States