US call for better energy storage rules in wholesale markets

Trade body the ACP has called for improvements in the way utility-scale batteries participate in wholesale energy, grid capacity, and grid-strengthening “ancillary services” markets.

The ACP described current wholesale market designs as “outdated” and said its recommended improvements would “improve grid reliability while ensuring Americans benefit from affordable, domestic clean energy.”

Across the three types of wholesale markets, energy markets procure kilowatt-hours while capacity markets procure on-demand capacity for reliability needs and ancillary services markets procure other on-call resources to help keep the grid running smoothly.

These wholesale markets are run by a handful of grid operators that serve either a single state – California, Texas, or New York – or a multi-state region. Each grid operator has different rules for compensating battery storage.

Roadmaps

The ACP and consultants from the Brattle Group have developed “roadmaps” calling for better compensation for energy storage participating in the wholesale markets of grid operators PJM, MISO, and NYISO.

A Brattle analysis showed that each of those grid operators has “already accomplished” specific reforms, and described in detail five “future reforms.” ACP has proposed those five reforms in a policy brief.

ACP said it is “committed to collaborating” with regional grid operators, state policymakers, and stakeholders to advance the reforms to “enhance grid reliability and lower costs for Americans.”

For each proposed reform, Brattle outlined a problem statement, the reform’s potential impact, and implementation progress across MISO, PJM, and NYISO.

Proposed reforms

The first proposed reform is a “day-ahead uncertainty product” that would provide transparent price signals for availability of dispatchable resources, aiding with reliability, especially during extreme weather.

The second is an “intrahour ramp and uncertainty product” that could reduce uneconomic cycling of thermal generators and ultimately reduce unnecessary renewable curtailment, while addressing power balance issues and price spikes.

The third is improved capacity accreditation, to more accurately recognize the capability of storage to meet reliability challenges under rapid load growth.

The fourth is “inter-hour opportunity cost bidding,” to allow storage to sell energy or ancillary services at prices above those forecasted for later in the day, given that storage cannot sell the same kilowatt-hour of energy twice in one day. MISO and NYISO already enable such bidding but PJM does not.

The fifth is enabling storage to meet local reliability needs after the retirement of a legacy generator.

The Brattle report is titled “Energy storage market design reforms: A roadmap to unlock the potential of energy storage.”

From pv magazine USA.