November 21, 2016—The Federal Energy Regulatory Commission took a strong step on Thursday to expand markets for energy storage across the nation. The proposed rule, on which stakeholders will have 60 days to submit comments after it’s published in the Federal Register, would require each regional transmission organization and independent system operator to create rules for energy storage to participate in wholesale markets. The rule would recognize “the physical and operational characteristics of electric storage resources,” which differ from typical resources in that storage can act as both a load and a supply source, and perform a multitude of functions. PJM has already created a frequency regulation market and become the largest US market for energy storage with 250.5 MW of deployed since 2013, according to GTM Research. The California ISO established a “non-generator” resource type that allowed storage to compete in markets, becoming the second largest US market for storage, with 73.2 MW deployed. ISOs and RTOs serve about 70 percent of US electricity load, so the rule, if adopted as proposed could quickly go nationwide, Greentech Media opined.
The proposed rule also directs grid operators to adjust their rules so that distributed energy resource (DER) aggregators can compete in wholesale markets, which could expand the market potential for storage massively for distributed resources like demand response, energy efficiency, storage, and renewables. “This isn't just clarifying existing rules; it's redefining the rules to acknowledge the fact that energy storage cannot adequately participate right now,” said Daniel Finn-Foley, senior analyst for energy storage at GTM Research. “It's a really big deal.”