What happens when the most important market signal for energy storage gets stripped away virtually overnight? That’s what happened earlier this year when the regional transmission operator PJM put in place new rules for storage as a provider of frequency regulation.
Between 2011 and 2015, hundreds of megawatts' worth of storage were put in place to balance the grid in PJM territory. A strong market signal made development extremely easy, causing an explosion of growth.
We’re in a different world today. New rules have lowered revenue for a 20-megawatt/5-megawatt-hour storage system from $623 in 2014 to $86 today, according to GTM Research's analysis.
Storage developers are now looking to other markets and other types of grid services to make money.
GTM Research Senior Storage Analyst Dan Finn-Foley has been tracking the regulation of frequency regulation in PJM and other markets. This week, we chatted about the impact on America's storage industry. We also looked to future revenue models in other regional markets.
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