FERC Order 841 levels the playing field for energy storage

Abstract

ABSTRACTFERC Order 841 focused on standardizing electric storage resource (ESR) participation in wholesale energy, ancillary services, and capacity market ruleset, by treating storage as a generation resource. Treatment of storage as a transmission asset (SATA) is up in the air. Expect to see FERC action on ISO/RTO compliance plans in 2019.Energy storage is finally getting its due at the wholesale grid level, thanks to FERC Order 841. All the grid operators within FERC jurisdiction must comply with FERC order to allow “electric storage resource” to participate in their markets. Storage increases capacity value of renewables and decreases variability as the grid makes way for more renewables such as wind and solar. Market Monitors must understand that storage could “withhold” its capacity in early morning ramp hours for evening peak ramp hours, or participate in ancillary services regulation market without bidding into the energy market. At the same time, this resource could be a transmission asset, adding an additional level of complexity. This FERC Order 841 has its own challenges: (i) it treats storage as a generation asset, (ii) some (such as National Association for Utility Regulators) think FERC stepped on their toes, (iii) it does not address all the value stack benefits for storage-like transmission for example, and (iv) aggregation of distribution connected storage is side stepped. So the industry is watching for clear direction from their Federal regulator on this important technology, which is finally getting its due.