FERC eliminates barriers for energy storage - Smart Energy Decisions

Energy Efficiency, Energy Storage, Regulation  -  February 15, 2018

FERC eliminates barriers for energy storage

The Federal Energy Regulatory Commission (FERC) voted on Feb. 15 to remove barriers to the participation of electric storage resources in the capacity, energy, and ancillary services markets operated by Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs).

According to a statement from FERC, "This order 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." In Nov. 2016, the Commission noted that market rules designed for traditional generation resources can create barriers to entry for emerging technologies such as electric storage resources. This final rule helps remove these barriers by "requiring each regional grid operator to revise its tariff to establish a participation model for electric storage resources that consist of market rules that properly recognize the physical and operational characteristics of electric storage resources."” 

A report by Reuters noted that "the market for energy storage is small but growing as the costs of battery systems have fallen domestically. Batteries can help solve the intermittent nature of renewable energy - dependent on sun and wind - compared with more generation sources like gas and coal, which can run all the time."

RE executives welcomed the FERC decision, according to Reuters, noting it will level the playing field with conventional electric generation sources. “Solar [power] plus storage is getting near the point where it can compete with natural gas peakers and that’s a really big deal because it’s sort of the last stronghold for conventional thermal energy,” said Tom Werner, CEO of SunPower Corp. “What the FERC ruling allows is the most economic solution to be able to bid in and compete.”

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