Last week, the Federal Energy Regulatory Commission (FERC) approved a rule to foster the development of energy storage, a vastly improved form of generation we think will be fundamental in supporting a grid congested with variable power supplies.
FERC Order 841 will “enhance competition and promote greater efficiency in the nation’s electric wholesale markets, and will help support the resilience of the bulk power system,” the commission said.
The order enables energy storage resources to compete in wholesale power markets and levels the playing field with conventional sources of generation. It removes barriers to participate in capacity, energy, and ancillary services markets administered by Regional Transmission Organizations (RTO) and Independent System Operators (ISO) by recognizing the “physical and operational characteristics” of the resource.
The order comes more than a year after FERC concluded the rules governing the wholesale purchase of conventional sources of generation barred energy storage from participating in the markets offered by RTOs and ISOs.
This may be the beginning of a boon in the development of utility-scale storage in the U.S., and will thus lead to greater efficiency. That’s because energy storage can absorb and store electricity produced by wind and solar power projects for later use when demand is higher. What’s more, further decline in the cost of energy storage is highly likely as development accelerates.
The new order, however, does not include aggregated distributed energy resources (DER), despite demands to give DERs the ability to participate in wholesale markets. FERC said it wanted to gather more information before eliminating the barriers preventing DERs from competing in wholesale markets.
A Public Necessity
Energy storage projects using rechargeable batteries will give grid managers the solutions they need to fill production gaps created by sharp fluctuations in wind and solar power. The ability to supply utility-scale power on demand will be key to ensuring reliability and achieving integration amid this renewable revolution.
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