ISO New England Lays Out Its Energy Storage Market Integration Plans

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 New England ISO’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 NE-ISO all
the way toward 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 stand-alone storage proposals, all of them battery
storage, on the ISO New England interconnection queue.  

Since the late 1970s, however, New England ISO 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,” or DARD, 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 on the ISO New England
interconnection queue are capable of moving continuously and nearly
instantaneously between charging and discharging. They are also
capable of providing regulation services while charging or
discharging.” 

To capture these features in market design, NE-ISO has designed
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, to avoid clearing more megawatt-hours than it can
provide. 

One important innovation in NE-ISO’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, and allow storage facilities to
“’partition’ its energy and regulation capability as it sees
fit.” 

ISO-NE’s filing makes 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.

Source: FS – GreenTech Media
ISO New England Lays Out Its Energy Storage Market Integration Plans