A New Vibe in Energy Storage
Breaking Down ACP’s 2022 Energy Storage Policy Forum
By Cecil Philip, Business Development Manager & Hannah Mason, Interconnection & Transmission Specialist
“Great things are done by a series of small things brought together.” – Vincent Van Gogh
Success Starts Here
As Energy storage systems have recently come to the forefront of the renewable renaissance era, the trajectory and continuous expansion of energy storage interconnection queue positions has been exciting to watch on a monthly and annual basis. This rapid expansion is proof that developers and utilities have reached their goal of making energy storage a big player in the renewable energy industry. However, now that the goal has been achieved, we must shift our focus onto continuing to develop technologies, procurement strategies, policies, and methodologies to transition energy storage into a position of providing reliability and resilience to the electric grid.
Knowing these changes are critical, we must have the capacity to self-discipline, act dutifully, and strive for achievement. Our industry must continue with conscientiousness as we take the next steps towards progressive change, become more proactive in developing the future of energy policy and system growth, and put our mentalities through a vibe shift.
Shifting in Storage Strategy
Storage has proven to be a powerful player in the renewable energy sector, and as needs and demands continue to evolve, energy storage is starting to see a shift in duration. Although short duration storage has shown its strength in application, the industry must continue to look towards future needs. The focus is turning towards long duration storage projects that will have the ability to utilize energy storage's biggest advantage--moving electricity through time. This transition will serve to support multi-day storage, as it aims to reduce the strain on the grid and supplement energy when renewable generation is low.
Energy Storage demands also illuminate the need for new technologies and procurement strategies. Supply chain issues have become a limiting factor in the construction of new energy storage facilities, showing the need to become open minded to alternative chemistries and investing in domestic supply chains.
Proactive in Policy
Energy storage has seen an exponential progression in growth. A technology application that was in its infancy a few years ago has seen grid-scale installations quadruple in the first quarter of 2022 as compared with 2021. This trend is not slowing down. As more battery storage is integrated into the grid, more dynamic policies and requirements are being developed to help make the renewable transition flow smoothly. Changes in policy will be crucial to reduce interconnection queue timelines and transmission line overbuilding. We need to study energy storage projects more realistically and utilize storage as an asset instead of creating a redundant transmission grid.
A DEEPER DIVE IN POLICY REFORM
FERC’s Proposed Interconnection Reform
Federal Energy Regulatory Commission (“FERC”) has recently proposed a new rule signaling a much-needed reform of interconnection requirements. The proposal highlights four key areas of reform to address the rapidly changing resource mix and aims to allow clean energy projects to progress through the queue more quickly, providing a much sought-after clarity of the interconnection process.
Implement a first-ready, first-served cluster study process:
The first-ready, first-served cluster study process rule would provide increased efficiency and minimize delay times in the interconnection process by clustering interconnection studies. To mitigate risk within these studies, readiness milestones and financial commitments would be imposed onto the interconnecting customer.
Incorporate technological advancements into the interconnection process:
This proposal would allow for multiple co-located resources at single point of interconnection on a shared site to submit only one interconnection request. Incorporating this rule would efficiently remove barriers and provide a more standardized process for co-located resource configurations. Additionally, the rule proposal seeks to allow interconnecting customers to add a generating facility to an existing interconnection request without having to reapply into the study process and the option to require transmission providers to consider alternative transmission solutions if requested.
Reduce interconnection queue processing speed
FERC’s proposed rule to reduce interconnection queue processing speed would be able to address one of the largest hurdles for energy storage development and penetration. The proposal seeks to impose firm deadlines and associated penalties for delays where force majeure is not applicable. The notice of proposed rulemaking also seeks to standardize specified modeling and proforma affected system agreements along with simplifying the process of interconnection requests within mandated resource or same state-authorized solicitations.
Update modeling and performance requirements for system reliability:
Not all resources are created equal, especially non-synchronous renewable energy generation as they do not provide a rotational inertia compared to the more traditional synchronously connected generators. FERC addresses the situational awareness of the changing resource mix with a notice of proposed rulemaking to adjust certain modeling and performance metrics for non-synchronous generating facilities to allow for better alignment with the resource’s specific use case in supporting reliability.
Capacity Accreditation Market Reform
Effective Load Carrying Capacity “ELCC” - Capacity Accreditation
For years, capacity accreditation frameworks have been based on the historical performance of dispatchable resources; however, FERC has recently started to reevaluate market specific capacity accreditation rules. As more intermittent and distributed generation resources enter the grid, each market’s specific capacity accreditation rules will shape renewable development by having a direct influence on quantity procured, capacity payments, and market saturation. Inconsistencies between market design principles and policy objectives can undermine the importance of ensuring capacity market prices which guide investors’ long-term entry and exit decisions. The potential capacity accreditation market reform could cause a disruption across the energy industry as methods of calculation are fundamentally different.
PJM - Adjusted Class Average - Effective Load Carrying Capacity
PJM's analysis has indicated that the high deployment of intermittent renewables coming onto the grid will displace traditional unlimited resources and shift the summer risk to later in the day. To align and quantify the resource adequacy value of resources under a high deployment of renewables and storage, PJM re-filed their capacity accreditation proposal to include storage and other resources using the Adjusted Class Average ELCC methodology to determine a resource’s capacity accreditation. This approach calculates the reliability contribution of all ELCC Resources as a portfolio, then assigns intermittent resources an individual class rating that sets the amount of capacity a resource can provide and adds a calculated unit-specific performance adjustment. The total of each of the individual resource values equals the average capacity contribution of all ELCC resources.
NYISO - Marginal – Effective Load Carrying Capacity
NYISO has indicated that the Buyer Side Mitigation rules implemented in 2008 created a large barrier to renewable energy participation in New York’s clean energy transition. To further the State’s goals, NYISO proposed implementing a Marginal ELCC methodology which calculates capacity accreditations by location and resource class of intermittent resources, including storage, and combining it with factors that derate incremental units to define individual resources uncapped capacity quantities. The most significant concern with the Marginal ELCC approach is that it could undervalue intermittent resources by not capturing resource diversity.
MISO – Capacity Accreditation
MISO’s largest hurdle for renewable penetration within the region is the lack of market rules to accommodate the growing amount of renewable hybrid solutions in their interconnection queue; however, recently FERC approved MISO’s request to formally define hybrid resources in its tariff and establish a methodology to accredit the capacity value of hybrids. Unlike NYISO and PJM, MISO believes that ELCC methodologies could enable more nuanced capacity accreditation because they can capture interactions between hybrid components. To accomplish this, MISO has proposed two methodologies. The first proposes that capacity accreditation be based on the sum of the hybrid technologies through the established credit values of their component technologies up to their firm transmission service level. The second is based on the historical availability and performance of existing hybrid resources.
Success is Continuous
“Never confuse movement with action.” – Ernest Hemingway
The development and rapid growth of energy storage pipelines has helped progress us towards meeting the various clean energy goals set throughout the nation. However, the job doesn’t end here. We must now focus on shifting the vibe by proactively engaging and taking action to reform policies, develop new technologies, and create improved procurement strategies, setting the stage for a dynamic renewable renaissance. It is now time for energy storage to play a more critical role in the reliability and resilience of the grid.
Let’s charge the way.
References
FERC. (2022, June 16). FERC proposes interconnection reforms to address queue backlogs. Federal Energy Regulatory Commission. Retrieved July 7, 2022, from https://www.ferc.gov/news-events/news/ferc-proposes-interconnection-reforms-address-queue-backlogs