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Regulatory Policy and Markets for Energy Storage in North America

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1 Author(s)
Kintner-Meyer, M. ; Pacific Northwest Nat. Lab., Richland, WA, USA

The last five years have been one of the most exciting times for the energy storage industry. We have seen significant advancements in the regulatory process to make accommodations for valuing and monetizing energy storage for what it provides to the grid. The most impactful regulatory decision for the energy storage industry has come from California, where the California Public Utilities Commission issued a decision that mandates procurement requirements of 1.325 GW for energy storage to three investor-owned utilities in four stages in 2014, 2016, 2018, and 2020. Furthermore, at the federal level, the U.S. Federal Energy Regulatory Commission's (FERC's) Order 755 requires transmission operators to develop pay-for-performance tariffs for ancillary services. This has had a direct impact on the market design of U.S. competitive wholesale markets and the monetization of fast-responding grid assets. While this order is technology neutral, it clearly plays into the fast-responding capability of energy storage technologies. Today, PJM, CAISO, MISO, NYISO, and NE-ISO have implemented Order 755 and offer new tariff-for-regulation services based on pay-for-performance principles. Furthermore, FERC Order 784, which was issued in July 2013, requires transmission providers to consider speed and accuracy in determining the requirements for ancillary services. In November 2013, FERC issued Order 972, which revises the small generator interconnection agreement that declares energy storage as a power source. This order puts energy storage on par with existing generators. This paper will discuss the implementation of FERC's pay-for-performance regulation order at all independent service operators (ISOs) in the United States under FERC regulatory authority (this excludes ERCOT). Also discussed will be the market impacts and overall impacts on the NERC regulation performance indexes. The paper ends with a discussion on the California, New York, and Ontario, Canada, procurement man- ates and the opportunity tancillary services. This has had a direct impact on the market design of U.S. competitive wholesale marketshat it may present to the energy storage industry.

Published in:

Proceedings of the IEEE  (Volume:102 ,  Issue: 7 )