Landmark Energy Storage Tariff for Frequency Regulation Approved for Midwest ISO Power Grid

[Fledermaus]

This is important. It will help integrate intermittent renewable energy into the grid.

“This decision by FERC is the most progressive and important step yet taken by regulators to encourage open-market access for energy storage technologies,” said Bill Capp, Beacon president and CEO. “The commissioners voiced their appreciation of the benefits that energy storage can bring to the grid, including higher reliability and lower CO2 emissions. In approving this tariff, they have underscored that technical innovation remains a top FERC priority.”

Judith Judson, director of regulatory and market affairs for Beacon, added, “We believe the Midwest ISO market rule structure is an excellent model that other ISOs might consider for their markets. We have encouraged that thinking in our comments and regulatory filings related to other ISO regions. The Midwest ISO is to be commended for its forward thinking and timely actions in developing this new tariff. We’re also grateful to FERC for its visionary leadership and recognition of the value of stored energy resources for grid regulation, including Beacon Power’s fast-response flywheels.”

In voting unanimously to approve the tariff structure, several FERC commissioners cited the benefits of energy storage in providing the regulation ancillary service. Commissioner Suedeen Kelly said, “I also wanted to note my support for the role that stored energy resources will have in the ancillary services market. These are important resources and I believe the market will function better by allowing them to participate.”

http://in.sys-con.com/node/788005

[kristopher]

1. It could be important, but more information is needed to know if it is good for renewables

Quoting the FERC press release:
"FERC accepted the Midwest ISO’s plan to limit the applicability of scarcity pricing to situations of true scarcity. Specifically, the Commission accepted the Midwest ISO proposal to share ramp capability among energy and operating reserve products, similar to procedures used by other ISOs, and to cap the regulating reserve price at the cost of a peak generator during periods of short-term, or transitory, scarcity."

To "cap the regulating reserve price at the cost of a peak generator" might be a way of pushing storage off the stage by limiting the very high peak prices that the open markets deliver. I'm not saying it is bad or good, but this press release doesn't give enough information to judge.

[Fledermaus]

2. Peak generation has the highest cost that an ISO will pay.

[kristopher]

3. That isn't true.

The highest cost is set at at electronic auction. It is a combination of factors that determines the price; for example, if there is a shortfall that generation couldn't fill, but storage could at a higher cost then the possibility of establishing a market for storage in that niche MAY BE eliminated.

I'm not saying this is a bad rule, I'm just saying there isn't enough information to determine its effect on the future development of renewables and storage. This stuff is really, really complex to the point where it takes real legal expertise to make the determination of the consequences. Even then, legal experts will (as usual) often disagree.

Merry Christmas and make sure you leave some alternative fuel for the cars.

[Fledermaus]

4. Link please