Energy storage is having an identity crisis in wholesale markets, and federal regulators are trying to fix it.
The question is simple: how do you define energy storage? For system operators, the answer is varied since storage can be categorized as generation, load or both.
To solve the conundrum, the Federal Energy Regulatory Commission opened a rulemaking for the nation’s six grid operators in order to make a place for energy storage in the markets.
As storage becomes cost-effective it can provide a litany of grid services and help alleviate concerns over the intermittency of renewable energy.
With that in mind, FERC opened a proceeding with a Notice of Proposed Rulemaking that will amend its regulations to “to remove barriers to the participation of electric storage resources and distributed energy resource (DER) aggregations in the capacity, energy, and ancillary service markets.”
Wholesale electric markets were not designed to consider energy storage, but the FERC proceeding “might solve that problem,” Shayle Kann, senior vice president at GTM Research said at at a recent storage summit.
“The rules may not create the economic case,” he said. “But the potential is there to open the markets.”
The new tariffs must accomplish two things, according to the NOPR.
First, they must establish market rules that recognize “the physical and operational characteristics of electric storage resources” and allow them to participate in the wholesale electricity markets.
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