Market Barriers Lifted for Energy Storage Systems

Electrical Grid

The FERC encourages efforts to remove market barriers for Energy Storage Systems

The Energy Storage Association (ESA) applauds the Federal Energy Regulatory Commission (FERC) for advancing their formal inquiry into market participation and barriers to entry for safe and reliable energy storage systems. By improving grid flexibility, reliability and efficiency, energy storage has already proven how valuable it is in the regional electricity markets under FERC jurisdiction. The Commission is taking a thorough and judicious approach to expanding the types of markets storage can participate in and the valuable services it can provide.

Jason Burwen“Energy storage is lowering costs, increasing reliability and enabling a more flexible electric grid everywhere that it is eligible to participate,” said Jason Burwen, Policy and Advocacy Director. “We applaud FERC for undertaking this endeavor. The Energy Storage Association will continue to work closely with FERC on advancing the Commission’s goal of ensuring least cost solutions for reliable energy and for making sure markets operate efficiently.” 

 

The review by FERC, according to ESA, is a signal that the Commission is working to ensure that market rules stay up-to-date with rapidly advancing storage technology. With market barriers removed, ratepayers will ultimately benefit from lower costs and more reliable and responsive electricity. In its public comments filed with FERC on Electric Storage Participation in Regions with Organized Wholesale Electric Markets (Docket AD 16-20), ESA asked FERC to: 

  • Enable energy storage to compete in an open market.
    Direct Regional Transmission Organizations (RTOs) and Independent Service Operators (ISOs) to establish resource categories, qualification criteria, and performance requirements that explicitly enable energy storage to compete fully in all market services. 
  • Establish rewards for more flexible resources at utility scale.
    ​Make markets more competitive by modifying capacity and ancillary services market designs to enable and reward participation of flexible resources like storage, including when paired with renewable energy generation and other resources. 
  • Support distributed storage at both utilities and consumer side.
    Ensure a path forward for fuller participation of distributed storage, whether on a utility system or operating onsite at a business or residence. Enabling energy storage to participate in all grid services ensures that electricity markets remain fully competitive and keep electricity costs as low as possible.

Energy storage systems can function in a variety of ways and are technically capable of participating in all market services. However, market rules—that were originally designed years ago around the limitations of traditional fossil generation—create potentially inadvertent and inappropriate barriers to storage. Storage projects, for instance, can respond nearly instantaneously at full output in either charge or discharge mode, providing flexibility and performance that generators are incapable of - yet certain market rules either constrain or penalize storage from operating in this manner. In addition to grid stabilizing services that storage already provides in some RTOs and ISOs, storage offers unique capabilities to manage transmission congestion and meet peak system capacity needs as well. As Mr. Burwen said: “The energy storage industry looks forward to working closely with the Commission to address these systemic barriers and enable storage to compete side-by-side with traditional resources in all the wholesale markets.".

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