In a perfect world, grid-connected energy storage plants would never be needed. The diversity and inherent flexibility of thousands of generators and loads in a large power system would provide all the flexibility that we could need to continuously match supply and demand at a very low cost, even with variable renewables dominating our generation resources.
But the world is far from perfect. In the real world, there are numerous inefficiencies that restrict resources from offering their full capabilities, limit access by new resources, impact compensation for providing services, and make the interconnection and participation process very difficult. Wouldn’t it be great if there was a standardized way to offer a broad suite of energy, ancillary services and reliability services to the system operator that made this easier?
There might be. As I discussed in a companion blog post, FERC Order 841 requires electricity markets to create an energy storage participation model that allows storage to provide its full capabilities to the wholesale energy markets. But FERC could have gone further by using storage as the example for a general participation model to be used by all resources, simplifying the process for innovative resources to participate in the market in the future.
At first glance, Order 841 is a boon for storage but just an incremental step for other inverter-based or distributed energy resources to participate in wholesale energy markets. In practice, this new participation model for storage may help many other kinds of resources, even without moving toward a universal participation model. By embracing the participation of storage, which has capabilities far beyond conventional generation, FERC may have unintentionally created a new participation model for creative combinations of storage with high-voltage direct current (HVDC) transmission, wind, solar and conventional generation.
Thinking beyond storage in Order 841
FERC defines an energy storage resource as “a resource capable of receiving electric energy from the grid and storing it for later injection of electric energy back to the grid… regardless of [its] storage medium.” Though battery storage systems are the predominant type of energy storage resource contemplated by Order 841, the order does not say that allof the energy must come from the grid and be returned back to that same grid. An energy storage resource, or something that looks similar to one, could be used as a standardized way to interconnect and participate in the ISO/RTO markets.
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