The Federal Energy Regulatory Commission has given every grid operator in the country a December deadline for submitting plans for integrating energy storage into capacity, energy and ancillary services markets.

We’ve been covering some of the details of this momentous grid policy development at GTM Squared, including a deep dive into PJM’s latest straw proposal for meeting this mandate. 

At the same time, FERC has also given each independent system operator (ISO) and regional transmission organization (RTO) leeway to meet Order 841’s requirements in ways that build on energy storage integration work already in progress. And in some cases, ISOs and RTOs are making big changes in energy storage-market integration well ahead of Order 841’s schedule.  

That description fits the ISO New England’s recently filed proposal for integrating batteries and other fast-acting storage assets into its energy markets. While the “Storage Revisions” plan filed with FERC earlier this month doesn’t take ISO-NE all the way to full Order 841 compliance, it does contemplate important and valuable changes in market rules for batteries and other “continuous storage facilities” coming as early as April 2019, eight months before Order 841’s implementation deadline. 

Much of the energy storage industry’s focus has been on mid-Atlantic grid operator PJM, which holds nearly 40 percent of the country’s existing large-scale battery storage power capacity, and has been updating its straw proposal for Order 841 compliance ahead of a December filing deadline. 

ISO-NE doesn’t have nearly as many grid-connected batteries as PJM. According to its straw proposal, 19 megawatts of battery storage facilities are participating in the regional market. But that number is expected to grow rapidly, under state mandates like Massachusetts’ statutory goal of 1,000 megawatt-hours of energy storage by the end of 2025. And the queue is staggering — as of September 1, 2018, there were over 800 megawatts of proposals for standalone storage, all of it batteries, in the ISO New England interconnection queue.  

Since the late 1970s, however, ISO New England has had a lot of pumped hydro, now accounting for nearly 2,000 megawatts of power and nearly 12,000 megawatt-hours of stored energy. These turbine-powered, water-moving batteries now participate in ISO-NE markets either as a generator when they’re discharging, or as a “Dispatchable Asset Related Demand” when they’re charging. 

But the market structures built for pumped hydro, which can’t rapidly switch between charging and discharging, won’t work for batteries. The storage resources in the ISO New England interconnection queue are capable of moving continuously and rapidly between charging and discharging. They are also capable of providing regulation services while charging or discharging.

To capture these features in the market design, ISO-NE has created a set of rules meant to “provide a means for batteries (and other storage technologies capable of continuously and rapidly transitioning between charging and discharging) to participate simultaneously in the energy, reserves, and regulation markets.”

ISO-NE’s proposal splits up the discussion of its Continuous Storage Facility rules into seven topics: 1) the commitment process; 2) energy market offers and energy market clearing; 3) the regulation market; 4) real-time telemetry; 5) reserves, sustainability, and operating limit adjustments; 6) self-dispatch; and 7) settlement. 

The first, commitment, describes a rule that requires pumped hydro resources to declare in advance whether they’ll be charging or discharging during certain set periods of time in the coming day. That doesn’t make sense for batteries that can switch between charging and discharging at a moment’s notice, so the storage rule proposes giving them “the option to entirely avoid the commitment process,” something that hasn’t been done for its energy markets in the past. 

Continuous storage facilities will still have to follow most of the existing energy market offering and clearing rules, although with some important additions to account for their limits as batteries. These include “Maximum Daily Energy Limit and Maximum Daily Consumption Limit” parameters that each battery operator can set in order to avoid clearing more megawatt-hours than it can provide. 

One important innovation in ISO-NE’s proposal is the idea of allowing batteries to provide frequency regulation services at the same time they’re charging or discharging for other purposes. To do this, it proposes modeling continuous storage facilities as both energy market resources and “Alternative Technology Regulation Resources” for regulation services. That will allow ISO-NE to send dispatches that combine regulation signals with energy market dispatch signals, as well as to allow a storage facility to “’partition’ its energy and regulation capability as it sees fit.” 

ISO-NE’s filing makes it clear that its storage revisions don’t cover all aspects of complying with FERC Order 841. It chose to submit them anyway, since they “will greatly facilitate market participation by emerging storage technologies.” The ISO is working on the remaining elements required for full compliance with Order 841 and plans to file those separately before the December 3 deadline.


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