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Utility Dive: FERC order opens 'floodgates' for energy storage in wholesale markets

Posted by Peter Maloney on Feb 20, 2018


Utility Dive reported that the FERC commission unanimously directed grid operators to develop rules for storage to participate in the wholesale energy, capacity and ancillary services markets.  

Order 841 directs operators of wholesale markets — Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs) — to come up with market rules for energy storage to participate in the wholesale energy, capacity and ancillary services markets that recognize the physical and operational characteristics of the resource. They have months to file tariffs that comply with the order and another year to implement those tariff provisions.

FERC specifies that those rules must:

  • Ensure that a storage resource can provide all the services it is technically capable of providing,
  • Ensure that an energy storage resource can be dispatched and can set market clearing prices as both a buyer and a seller,
  • Account for the physical and operational characteristics of storage resources through bidding parameters or other means,
  • Establish a minimum size for participation in RTO/ISO markets that does not exceed 100 kW, and
  • Specify that the sale of electricity from the RTO/ISO markets to a storage resource that the resource resells must be at the wholesale locational marginal price.
The story included AEE's perspective: It is notable that the FERC order could allow storage to compete head-to-head against traditional resources such as peaking plants. “It is nice to see it come in as a market mechanism and not as a mandate,” Maria Robinson, director of wholesale markets at Advanced Energy Economy, a business advocacy group, told Utility Dive. “I would imagine this will allow energy storage companies to find new ways to compete,” she said. “Ultimately, it is all about scaling.”

See the full Utility Dive story here.

Topics: AEE In The News