How to treat energy storage as a transmission asset?
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PERSPECTIVE How to treat energy storage as a transmission asset?
Rao Konidena, Rakon Energy LLC, Roseville, MN, USA Address all correspondence to Rao Konidena at [email protected] (Received 3 May 2020; accepted 7 July 2020)
ABSTRACT For energy storage to be part of the transmission solution, storage developers need to work with transmission owners and follow the Regional Transmission Organization (RTO) transmission planning protocols. Federal Energy Regulatory Commission (FERC) Order 841 mostly treats Electric Storage Resource (ESR) as a generation asset. To date, no FERC order lays out a path for treating energy storage as a transmission asset. One of FERC-jurisdictional RTOs – Midcontinent Independent System Operator (MISO) – has sent a “storage as a transmission-only asset” proposal to FERC, which FERC did not reject but did not approve either. This MISO filing begs the question – how to treat energy storage as a transmission project? The industry needs to understand how RTO cost allocation works for new and existing transmission projects. To appreciate cost allocation, stakeholders need to grasp the fundamentals of transmission project categories. Because to put together a business case for storage, modeling is essential. And modeling for reliability and economic projects vary. Getting into the weeds of transmission planning is what it takes to treat storage as a transmission asset. Keywords: energy generation; energy storage; storage
FERC energy storage activity Federal Energy Regulatory Commission (FERC) had laid out an order on “electric storage resources” thoughtfully and deliberately. First, it released a Notice of Proposed Rulemaking (NOPR) in late 2016. Received comments from the industry and then released a final order 841 in early 2018,1 giving ISO/RTOs time until December 2018 to file compliance plans. Once Regional Transmission Organizations (RTOs) filed their plans to comply with the FERC order, FERC asked more questions of the RTOs in April 2019 due to rehearing requests. This extensive FERC record resulted in a re-affirmed order 841-A in May 2019.2 Now, D.C. Circuit of Appeals has the case brought on by the National Association of Regulatory Utility Commissioners (NARUC) and Edison Electric Institute (EEI). NARUC argues that FERC has overstepped its authority
DISCUSSION POINTS • How does one go about treating energy storage as a transmission project? • If energy storage is a regional policy mandate, how should an RTO evaluate policy impacts? • How to differentiate between an economic project and a policy project?
on distribution connected storage. In the meanwhile, RTOs are finalizing their market architecture to treat storage on par with other market resources. To treat storage as a generation asset in the wholesale market, RTOs are required to take the following seven actions: 1. The definition of Electric Storage Resources (ESRs) is “a resource capable of receiving electric energy from the grid and storing it for later injection of electric energy back to the grid”.3 2. Storage resources great
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