Energy storage’s unique ability to act as both generation and load makes it a round peg in the square peg board of utility regulation.
That mismatch is destined to come into sharper relief as a rulemaking on energy storage in Texas moves forward, highlighting some of the contentious issues the technology raises in competitive power markets.
At the wholesale level, there is no problem installing an energy storage project in Texas. The state is already home to a number of storage projects, including the 2 MW Elbow Creek project deployed by NRG Energy and Toshiba in Howard County and the nearly 20 MW Texas Waves project near Roscoe that E.On brought online earlier this year.
“The separation of competitive and regulated entities has been very strict and thorough in Texas. It is a framework that everyone jealously guards.”
Michael Jewell
Attorney, Jewell & Associates
But deploying storage on the distribution grid can be challenging, as AEP Texas and Oncor Electric have discovered, and that can limit energy storage’s potential revenue streams. “There can be some wholesale market rules that make it harder to capture the full value,” Johannes Pfeifenberger, a principal at The Brattle Group, told Utility Dive.
The issue goes to the heart of the structure of Texas’ power market and what has enabled it to work so well, Michael Jewell, an attorney with Jewell & Associates, told Utility Dive. “The separation of competitive and regulated entities has been very strict and thorough in Texas. It is a framework that everyone jealously guards.”
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