FERC Seeks to Open Wholesale Markets to Storage

In November 2016, FERC issued a notice of proposed rulemaking to address barriers in wholesale markets that have thus far limited participation of energy storage and aggregated distributed energy resources.

Key Details

  • The proposed rule would require RTOs and ISOs to “establish market rules that recognize the physical and operational characteristics of energy storage and accommodate their participation in the organized wholesale electric markets”
  • The rule would also require RTOs and ISOs to allow distributed energy resources aggregators to participate directly in organized wholesale markets according to their specific attributes
  • Current market rules such as those requiring resource size or duration of output were written for traditional resources and may limit storage participation
  • Storage does not easily fit into traditional definitions of generation, transmission, or distribution—the categories which define traditional benefits assessment and monetization
  • Existing regulatory structures do not always address assets that either fall in between, or span, operational categories. As a result, classifying resources under current wholesale constructs has been problematic for energy storage adoption
  • Comments on the proposed rule are due 60 days after the rule is published in the Federal Register

Implications

Once all comments are received and considered, a final rule will be issued determining the extent of the proposed changes. Further, opening wholesale markets to energy storage and distributed energy resources will create opportunities to participate in markets where they are limited or do not exist today. With the potential opening of all wholesale markets to energy storage, we may see increased participation and expanded growth in energy storage.

Additional Contributing Author

Kevin Hernandez, manager at ScottMadden

Additional Resources

ScottMadden: Beyond Renewable Integration: The Energy Storage Value Proposition

Utility Dive: FERC seeks comment on new rules for energy storage in wholesale power markets

SNL: FERC rule would help storage, distributed resources participate in markets

Greentech Media: FERC Proposes to Open Up Wholesale Markets for Energy Storage and Aggregation

This report is part of the Clean Tech & Sustainability Minute series. To view all featured Minutes, please click here.

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