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FERC approves 1st 2 filings to comply with landmark energy storage rule

The Federal Energy Regulatory Commission on Oct. 17 approved compliance filings from the PJM Interconnection and the Southwest Power Pool on FERC's Order 841, a pivotal rule aimed at removing barriers to energy storage resources' participation in wholesale markets.

The orders are the first two that the commission has approved to implement Order 841, which directed all FERC-jurisdictional grid operators to craft rules for accommodating energy storage in their capacity, energy and ancillary services markets.

"Electricity storage must be able to participate on an even playing field in the wholesale power markets that we regulate," FERC Chairman Neil Chatterjee said in a press release. "Breaking down these market barriers encourages the innovation and technological advancements that are essential to the future of our grid."

Despite approving the filings, the commission asked PJM and SPP to submit further compliance filings within 60 days, finding that neither grid operator's market tariff contained minimum run-time requirements for resource adequacy and capacity. As a result, FERC initiated proceedings under Section 206 of the Federal Power Act to address those issues and directed PJM and SPP to submit tariff provisions regarding rules and practices for resource adequacy and capacity minimum run-time requirements for all resource types.

In addition, the agency established paper hearing procedures to examine PJM's minimum run-time rules and procedures for capacity storage resources. During FERC's Oct. 17 open meeting, a commission staff member said the record in the PJM proceeding raised concerns that the grid operator's application of its minimum run-time requirements for capacity storage resources may be unjust, unreasonable, unduly discriminatory or preferential. Those concerns were not raised for the SPP proceeding, the staff member added.

U.S. Energy Storage Association CEO Kelly Speakes-Backman praised FERC's actions.

“FERC’s decision today that PJM must place rules regarding the capacity qualification of energy storage resources in its tariff is a tremendous step in fully removing barriers to energy storage in wholesale markets,” said Speakes-Backman. “Further, ESA is pleased to see FERC open a new proceeding on PJM’s proposed 10-hour duration requirement for qualifying energy storage capacity — which ESA has consistently stated is unjust and unreasonable."

The power industry has broadly viewed electric storage resources as key to greater deployment of wind and solar energy and distributed generation, as well as a way to bolster grid resilience and improve the efficiency of all resource types.

In total, around 33 GW of U.S. energy storage systems are under development, consulting firm Wood Mackenzie Power & Renewables and the Energy Storage Association said in a December 2018 report. But Wood Mackenzie recently slashed its forecasts for U.S. storage deployments in 2019 to 478 MW, citing delays of large-scale energy storage projects and a slower-than-expected second half of the year for behind-the-meter batteries.