FERC Order 841 levels the playing field for energy storage
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COMMENTARY FERC Order 841 levels the playing field for energy storage
Rao Konidena, Rakon Energy LLC, Roseville, Minnesota 55113, USA Address all correspondence to Rao Konidena at [email protected] (Received 1 March 2019; accepted 20 March 2019)
ABSTRACT FERC Order 841 focused on standardizing electric storage resource (ESR) participation in wholesale energy, ancillary services, and capacity market ruleset, by treating storage as a generation resource. Treatment of storage as a transmission asset (SATA) is up in the air. Expect to see FERC action on ISO/RTO compliance plans in 2019. Energy storage is finally getting its due at the wholesale grid level, thanks to FERC Order 841. All the grid operators within FERC jurisdiction must comply with FERC order to allow “electric storage resource” to participate in their markets. Storage increases capacity value of renewables and decreases variability as the grid makes way for more renewables such as wind and solar. Market Monitors must understand that storage could “withhold” its capacity in early morning ramp hours for evening peak ramp hours, or participate in ancillary services regulation market without bidding into the energy market. At the same time, this resource could be a transmission asset, adding an additional level of complexity. This FERC Order 841 has its own challenges: (i) it treats storage as a generation asset, (ii) some (such as National Association for Utility Regulators) think FERC stepped on their toes, (iii) it does not address all the value stack benefits for storage-like transmission for example, and (iv) aggregation of distribution connected storage is side stepped. So the industry is watching for clear direction from their Federal regulator on this important technology, which is finally getting its due. Keywords: energy storage; electrical properties; recycling
DISCUSSION POINT • When will FERC decide on ISO/RTOs compliance filings for FERC Order 841? Will energy storage continue to pick up after FERC decision? Will transmission development companies embrace storage as a transmission asset? Will aggregation of electric vehicles bid into ISO/RTO markets? Will an Independent Market Monitor at an ISO/RTO penalize storage, for withholding their capacity?
Ellen Anderson’s1 article focuses on the conspicuous transformation of energy storage in the Midwest—a story no one else is telling. The Minnesota Energy Storage Alliance (MESA) convened two energy storage summits that were attended by audiences of more than 200 people, representing wide stakeholder segments, such as investor owned utilities (IOUs), independent power producers (IPPs), market participants, transmission owners, storage developers, Independent System Operators (ISO)/Regional Transmission Organization (RTO) and Public Utility Commission (PUC) staff, students, and industry leaders. A crowd of this size attending a conference in Minnesota is unheard of, unlike most energy storage conferences that are held either in San Francisco or San Diego. Her article addresses that unique MESA
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