‘Watershed moment in energy transformation’: Industry reacts to FERC Order 841 ruling
In the US, as with most other parts of the world, distributed energy storage can help homeowners and businesses to reduce the carbon footprint of their electricity use, back up their loads in case of emergencies and allow them a degree of energy independence from the grid.
While these are all important and worthy use cases, distributed energy storage could do so much more. The fact that the bulk of the value of that energy storage remains with the end user means that the benefits to the electricity network of putting storage on the grid are limited, while also providing barriers to capturing the value of that storage. For instance, electric utilities could make much better use than they are able to today of solar-charged energy storage systems to meet their peak electricity demand, provide grid services or defer costly investment in distribution (and transmission) network infrastructure.
Ultimately, this could provide something of a virtuous circle and mean that end users would benefit economically from widely enrolling their home and commercial battery installations into utility virtual power plant (VPP), demand response and other programmes, offering a much better return on investment and reduced payback times.
Since 2016, the US’ Federal Energy Regulatory Commission (FERC) has been pushing forward to do exactly this, through FERC Order 841 which demands independent system operators (ISOs) and regional transmission operators (RTOs) allow distributed storage to participate in wholesale markets. After negotiating many hurdles, including a ruling last week by a court in DC that confirmed FERC’s jurisdiction to enact the Order, this looks finally set to happen. Energy-Storage.news has collected a wide range of reactions and views from industry participants on what it means:
Interstate Renewable Energy Council (IREC)
Works state-by-state across the US, offering regulatory policy engagement and best practice resources for the “rapid adoption of clean energy and energy efficiency”.
Sky Stanfield, a lawyer with Shute, Mihaly and Weinberg, who represents IREC in regulatory proceedings
FERC Order 841 is a significant step forward in enabling distributed energy storage to participate in wholesale markets. It also clarifies some of the jurisdictional questions surrounding interconnection of those resources. In doing so, however, it is important to recognize that, since distributed storage resources will be interconnected using state jurisdictional interconnection procedures, there could still be significant obstacles for those projects to navigate.
While FERC and the DC Circuit clarified that energy storage projects can participate in the markets and that states cannot “opt out”, there is still substantial work to be done in order to ensure that state interconnection procedures require that utilities study projects in a manner that recognises the capabilities of these systems to address and mitigate grid impacts.
Hitachi ABB Power Grids
Power and automation technology providers for sustainable energy systems.
By upholding Federal Energy Regulatory Commission’s (FERC) Order 841, the courts provide clarity to industry by accelerating the development of innovative energy storage solutions. This clears a path toward a stronger, smarter, greener power grid, and greater access to electricity for those who are distanced from the main grid.
Efficient, intelligent, and flexible energy storage is a necessity to that vision. With this ruling, energy storage will have fair access to markets, unlocking new revenue opportunities for partners across the electric utility network. It also enables battery storage solutions, microgrids, and other grid edge solutions, to flourish by encouraging green initiatives and reliability.