ESA: Power Plants with Energy Storage Can Boost Electric Market Competition and Lower Costs
New Industry White Paper on Hybrid Resources Examines Unlocking Value, Removing Barriers to Entry
September 19, 2019 -- As electricity markets innovate with new technologies to increase system reliability and efficiency, a new industry white paper released recently (9/16) shows how energy storage projects integrated with power plants, such as wind and solar power, are crucialto providing greater value to the electric grid, facilitating greater market competition and lowering electricity costs for consumers.
The white paper, entitled Enabling Versatility: Allowing Hybrid Resources to Deliver Their Full Value to Customers, is the product of a collaboration between Grid Strategies and the U.S. Energy Storage Association (ESA). This white paper assesses barriers and proposes solutions to enable “storage-plus-generation” hybrid resource deployment on the bulk power system, particularly in organized wholesale markets. The report was developed through interviews with developers of hybrid resources, grid operators, and transmission owners.
“The surge of market interest in hybrids is moving faster than the evolution of market rules, as the report concludes,” said ESA CEO Kelly Speakes-Backman. “This is why changes surrounding energy storage deployment—whether they be market rules, state regulations or federal legislation, like the enactment of a stand-alone Investment Tax Credit for energy storage—must happen quickly if we are to guarantee a flexible, modern electric grid that meets demand for the next several decades.”
Among the biggest trends occurring in electricity industry today is the rush to develop “hybrid resources”—i.e., energy storage-paired generation—which offer enhanced capabilities and can respond to economic signals more flexibly than traditional generators. However, the deployment of hybrid resources faces barriers, both on the electric grid and in participation in electricity markets. Ultimately these barriers limit competition and opportunities to lower the wholesale cost of electricity. In examining the problem and finding solutions, the study:
- Recommends both near- and long-term changes to interconnection and market participation rules to better integrate hybrid resources
- Outlines industry practices, market rules, and regulations that need updating
- Explains why the Federal Energy Regulatory Commission (FERC) and regional grid operators must act quickly to ensure the development of these resources is not stunted or driven in inefficient directions
The study’s findings also discuss the operational priorities and differences between an owner-operated facility and that of a grid-operated focus. Just as FERC’s Order No. 841 enabled participation of stand-alone energy storage resources on the electric grid, a similar rule is needed to enable participation of hybrid resources.
Also of Interest from SGO:
6th Demand Response & DER World Forum, October 16-17, 2019, San Diego
3rd CyberSecurity International Symposium, November 4-5, 2019, Chicago
4th Smart Cities International Symposium, January 21-23, 2020, Chicago
11th Microgrid Global Innovation Forum – North America, March 10-11, 2020, Chicago