On November 9, FERC staff held a technical conference on using electric storage resources in organized markets (“Utilization In the Organized Markets of Electric Storage Resources as Transmission Assets Compensated Through Transmission Rates, for Grid Support Services Compensated in Other Ways, and for Multiple Services,” Docket No. AD16-25-000, agenda here). The conference comprised three panels: (1) potential models for cost recovery for electric storage resources used as transmission assets (while also selling energy, capacity or ancillary services at wholesale); (2) potential models for an electric storage resource to provide a compensated grid support service (like a generator providing ancillary services under a reliability must-run contract), rather than being compensated for providing transmission service; and (3) electric storage resources providing multiple services at once (i.e., providing both wholesale service(s) and retail and/or end-use service(s)).
(1) Neil Miller from CAISO noted that none of the 17 battery storage projects proposed as transmission assets in CAISO have been successful, but that storage has had more success through capacity procurement. The ISO thus prefers that storage assets participate in the markets, rather than seeking transmission asset compensation; however, Mr. Miller remained skeptical about the ability of battery storage to provide black start services. John Fernandes of RES America suggested that transmission system modeling is not advanced enough to most efficiently provide for system needs.
(2) There seemed to be general opposition among the grid operators that using storage to provide grid support services akin to RMR contracts was not optimal. CAISO and PJM each have one generator with an RMR. Neil Miller of CAISO noted that RMRs are used to support existing units, rather than develop new ones, and were RMRs open to competitive bidding, new resources would find it difficult to compete with heavily depreciated units. Mike DeSocio of NYISO noted that RMRs are used to meet short-term needs, while markets address longer-term needs.
Eric Hsia of PJM did not oppose the potential of a bidding option that would allow rapidly deployable storage resources to compete with leaving generators. Jason Burwen of the Energy Storage Association noted that rapid deployment is expected in the industry, pointing to storage deployed in response to the Aliso Canyon leak in California. Mike DeSocio indirectly responded by pointing out that opening RMRs to competitive processes extends the timeline for their implementation.
(3) Storage can bid into 90% of NYISO markets, including regulation and ancillary services (excluding black start); it can bid into the capacity market if it can provide 1 MW for at least four hours, and into the regulation market if capable of providing 1 MW for one hour. In PJM, storage may provide black start services as long as it has a 16-hour run time, and capacity services may be provided with a five-hour run time. Bill Capp of Grid Storage Consulting noted that frequency response is an ideal application for storage and that the same asset can provide frequency response and voltage control.