Grid operators file plans with FERC on integrating storage into wholesale markets
FERC may have allowed the floodgates to open for energy storage when it issued Order 841 in February, but with the compliance filings in after a Dec. 3 deadline, the floodgates will likely open slowly, not suddenly.
There is not going to be a “top down” approach to energy storage accommodation, Avi Zevin, an attorney at the Institute for Policy Integrity at the New York University School of Law, told Utility Dive. In other words, FERC is not dictating a response; the responses are coming from the RTOs and they are different because each RTO or ISO has a different market structure, Zevin said.
California, arguably, is the furthest along in integrating energy storage into its market. In 2010, the state established the first energy storage target in the nation with passage of AB 2514, which established a target of 1,325 MW of energy storage by 2020 for the state’s three investor-owned utilities (IOUs).
California since then has added a new target with passage of AB 2868, which calls for 500 MW of behind-the-meter storage, or 166.6 MW for each IOU. “California is furthest along and had the least changes to make,” so their filing was mostly demonstrating to FERC how they are already in compliance with 841, Zevin said.
California is also different than eastern grid operators because it does not have to account for the complications of a capacity market when it is trying to accommodate energy storage. PJM, ISO New England and the New York ISO, on the other hand, all have capacity markets, but each has a different structure and different rules.
Capacity markets usually require that a resource be available for a certain minimum time. In PJM, it is 10 hours, which is difficult for most storage resources to meet. In New England, it is two hours and in New York, it is four hours.