The Energy Storage Association (ESA), the national trade association for the energy storage industry, has announced its initial assessment of filings made one week ago by regional grid operators attempting to comply with directives issued last February by the Federal Energy Regulatory Commission (FERC) in its landmark Order 841.
While all regional grid operators opened market products to energy storage to some degree, with the exception of the California Independent System Operator (CA ISO), all other filings either left out key compliance parameters or suggested limitations contrary to the intent of FERC Order 841.
“The energy storage industry appreciates the decisive action and clear vision articulated by the FERC last February, when it acted in a unanimous and bipartisan manner to recognize the role storage can play, given a clear pathway to wholesale market participation,” said Kelly Speakes-Backman, CEO of ESA. “Acknowledging that each regional grid operator has a different level of experience with energy storage, we have made our assessments of each operator individually. While there are common threads contained within the filings to remove barriers to storage and enable its flexible operation, it appears that certain aspects are insufficient for – and even counter to – the intent of FERC 841, and we believe the FERC will agree.”
Order 841 offered expansive insight into the FERC’s vision for energy storage resources operating on the bulk power system, all pointing to the need for regional grid operators to establish participation models for electric storage.
“Make no mistake, we have made some progress in removing barriers to energy storage in wholesale markets with these filings. However, many concerns emerged with respect to the filings made by the grid operators representing the Mid-Atlantic and Northeast,” Speakes-Backman said. “In addition to the clear guidance from the FERC at the wholesale level, throughout 2018 policymakers in New York, Massachusetts, New Jersey and Maryland signaled their own intent to seize upon the benefits provided by storage as it enables a more resilient, efficient, sustainable and affordable electric grid for consumers.”
She added: “We expect PJM, NYISO, and ISO-NE to remove barriers and level the playing field, so as not to obstruct the policy objectives of the states they serve. With New Jersey’s goal of 600 MW of storage by 2021 and 2 GW by 2030; Massachusetts’ target of 200 MWh by 2020 and 1 GWh by 2025; and New York’s goal of 1.5 GW by 2025, it matters tremendously if the grid operators serving those states fail to comply with the intent of FERC Order 841.”
Below is an outline of ESA’s topline takeaways from each regional grid operator compliance filing.
- CA ISO: We commend the CA ISO for codifying its existing framework for storage participation in its wholesale market, which we view as largely already in compliance with the directives of FERC Order 841. The industry looks forward to continuing its engagement with the CA ISO on recommended improvements to the existing storage participation model.
- Midcontinent ISO (MISO): Although some areas of uncertainty remain, the compliance filing offered by the MISO represents a positive step forward toward enabling storage participation in the Midwest wholesale market. The commitment status categories reflected in the filing represent a potential best practice that other regional grid operators should consider, although we remain concerned about how MISO will apply transmission charges to storage. We look forward to engaging further with the MISO to ensure that its minimum size requirements align with the directives of FERC Order 841.
- Southwest Power Pool (SPP): With very little in terms of existing guidance for storage participation in its regional market, the filing made by the SPP presents a straightforward compliance approach, inclusive of potential best practice elements for transmission applications. There are several areas of uncertainty in the filing to be clarified in the next phases of the FERC process, such as the proposed technical requirements and standards for capacity accreditation.
- PJM: Their plan to implement an accounting system to separate wholesale and retail transactions is commendable. However, the lack of state-of-charge (SOC) parameters and requirement of a ten-hour capacity duration in PJM’s filing exemplify the barriers PJM proposes to erect, rather than remove in its filing for FERC Order 841. Given the progress already made by states in the PJM footprint looking to enable greater storage deployments, we are disappointed by the regressive elements of PJM’s filing.
- New York ISO (NY ISO): The changes in sub-hourly dispatch enable flexible use of storage. NY ISO is, however, non-compliant with Order 841 in that the NY ISO filing would prohibit storage from participating in both wholesale markets and utility programs. The filing also includes measures that run counter to the intent of Order 841, including a proposed market mitigation scheme that will serve as a barrier to entry for resources smaller than two megawatts.
- ISO New England (ISO NE): The ISO NE filing contains proposals representing potentially acceptable methods of compliance, but several crucial items are lacking, such as SOC parameters and a clear explanation of the mechanism by which storage will be eligible to provide all services in the New England market. We appreciate the ISO’s attempt to render its rules technology neutral and look forward to clarification of some of its included must-offer rules and other filing components.
“To be clear, there is more work to be done before the storage industry can endorse the participation frameworks envisioned by PJM, NYISO, ISO-NE, MISO, and SPP,” said Jason Burwen, vice president, policy of ESA. “We look forward to sharing our perspective with the regional grid operators and with FERC in its upcoming proceedings, and we look forward to working with the regional grid operators on appropriate implementation of approved frameworks. Doing so will set a strong foundation for energy storage participation in the electricity markets, and for enabling the electric grid to operate with greater flexibility.”
Next up: ESA awaits the FERC’s decision on its request to extend the compliance filing comment deadline by 45 days. With a date certain, ESA on behalf of its member companies will turn its attention to preparing detailed responses to each regional grid operator compliance plan.