US Federal Regulators to Examine Compensation Options for Energy Storage in Markets

The Federal Energy Regulatory Commission (FERC) last week said it will explore how it can ensure compensation for energy storage resources in U.S. energy markets.

FERC on Nov. 9 will convene a technical conference during which staff will identify circumstances under which energy storage resources can provide multiple services and whether transmission operators’ tariffs should include provisions to accommodate business models for those services.

The Energy Storage Association (ESA) on Oct. 3 commended FERC for its decision to hold the conference.

“FERC’s announcement recognizes that energy storage systems in particular are uniquely flexible resources that provide numerous benefits to grid operators and consumers,” Matt Roberts, executive director of the ESA, said in a statement. “Regulatory barriers in place today limit our ability to capitalize on improved system reliability and cost-savings. Unlike traditional grid technologies, flexible energy storage systems can provide both generator and transmission services at the same time — but we need regulatory policy to keep up with these advances in technology.”

FERC said in a Sept. 30 notice that the subject of the conference will be “the utilization of [energy] storage resources as transmission assets compensated through transmission rates, for grid support services that are compensated in other ways, and for multiple services.”

The discussion will include issues related to the following:

  • potential models for cost recovery for energy storage resources utilized as transmission assets, while also selling energy, capacity or ancillary services at wholesale
  • potential models to enable an energy storage resource to provide a compensated grid support service (like a generator providing ancillary services under a reliability must-run contract) rather than being compensated for providing transmission service
  • practical considerations for energy storage resources providing multiple services at once (i.e., providing both wholesale services and retail and/or end-use services)

The conference will be webcast via the FERC website here.

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