FERC Removes Energy Market Barriers for Energy Storage; Will Study Aggregated DERs Next

On Thursday, February 15, 2018, the governing body that oversees the electric power grid in the U.S., the Federal Energy Regulatory Commission (FERC), voted unanimously in favor of adopting a new rule that would remove the market barriers that now prevent energy storage from participating in the wholesale energy markets, aka, the bulk power grid.

Specifically, the rule removes barriers to the participation of electric storage resources in the capacity, energy and ancillary services markets operated by Regional Transmission Organizations and Independent System Operators. FERC said in a press release that the 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. 

Commissioner LaFleur said that she is “very pleased to support today’s order on removing barriers to storage resource participation in RTO/ISO markets,” adding that while it might be clichéd to call energy storage a game changer, “it is also true.”

“Given the ongoing changes in our nation’s resource mix, and the changing capabilities needed to serve customers, electric storage is poised to provide a critically important role,” LaFleur said.

FERC voted to continue studying how aggregated distributed energy resources (DERs) like solar, electric vehicles, demand response and behind-the-meter batteries could participate in the wholesale markets, issuing a Notice of Technical Conference (RM18-9-000), that identifies questions to help gather additional information to determine what action to take regarding aggregated DERs.

Commission staff also will use the technical conference as an opportunity to discuss other technical considerations for the bulk power system related to distributed energy resources. 

Kelly Speakes-Backman, CEO of the Energy Storage Association, said in a statement that “Electric storage technologies already fulfill crucial functions in the bulk power system to provide reliable power and a more resilient grid.  With this morning’s unequivocal action, the FERC signaled both a recognition of the value provided by storage today, and more importantly, a clear vision of the role electric storage can play, given a clear pathway to wholesale market participation.”

Malcolm Woolf, senior vice president for policy at the Advanced Energy Economy said in a statement that the order takes a “significant step toward removing barriers that keep advanced energy technologies from competing in wholesale electricity markets on the basis of their ability to improve the reliability, resilience, and affordability of our energy system. Energy storage can help reduce costs to consumers and ensure that the lights stay on.”

In a second order, FERC revised its regulations for the provision of primary frequency response, amending the Commission’s pro forma Large Generator and Small Generator Interconnection Agreements to require that all new generating facilities install, maintain and operate a functioning governor or equivalent controls as a precondition of interconnection. 


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Jennifer Runyon has been studying and reporting about the world's transition to clean energy since 2007. As editor of the world's largest renewable energy publication, Renewable Energy World, she observed, interviewed experts about, and reported on major clean energy milestones including Germany's explosive growth of solar PV, the formation and development of the U.S. onshore wind industry, the U.K. offshore wind boom, China's solar manufacturing dominance, the rise of energy storage, the changing landscape for utilities and grid operators and much, much, more. Today, in addition to managing content on POWERGRID International, she also serves as the conference advisory committee chair for DISTRIBUTECH, a globally recognized conference for the transmission and distribution industry. You can reach her at Jennifer.Runyon@ClarionEvents.com

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