FERC proposes new rule to increase participation of storage

23 November 2016

The USA’s Federal Energy Regulatory Commission has released its proposal for a new rule that, if adopted, would facilitate greater participation by electric storage resources (including batteries, flywheels, pumped-hydro, etc.) and distributed energy resource (DER) aggregators in organised wholesale electric markets. The proposal would allow these resources to sell all forms of grid services that they are technically capable of providing – including bulk energy services (eg capacity and energy) and ancillary services (eg regulation and reserves).

The proposed rule signals FERC’s recognition that electric storage resources and DER are continually improving and becoming increasingly competitive options in wholesale power markets. It also sends a clear message that FERC views such resources and technologies as critical to the future of the grid.

FERC’s proposal calls for regional transmission organisations (RTOs) and independent system operators (ISOs) to take the following actions:
1. Establish a "participation model" for electric storage resources, consisting of market rules that acknowledge the unique attributes and characteristics of storage, and that will allow storage to effectively participate in organized wholesale electric markets.
2. Allow DER aggregators, including electric storage, to participate directly in organised wholesale electric markets, and accommodate their participation through market rules.
The proposed rule would require RTOs/ISOs to include DER aggregators as a type of market participant, and allow them to register their aggregations under whichever tariff rules best suit their physical and operational characteristics.
RTOs/ISOs also must facilitate participation of DER aggregations by establishing market rules that address eligibility for direct participation in the organized market through a DER aggregator, locational requirements for DER aggregations that are as geographically broad as possible, distribution factors and bidding parameters for DER aggregations, information and data requirements for DER aggregations (including total capacity, operating limits, ramp rate, minimum run time, and default distribution factors),
metering and telemetry system requirements for provision of real-time data, and co-ordination among the RTO/ISO, DER aggregator and the distribution utility to avoid reliability or safety concerns.
The proposed rule also calls for RTOs/ISOs to ensure that their tariffs do not prohibit any particular type of technology, though FERC does not seek to upend existing RTO/ISO rules that explicitly prohibit certain technologies.
Comments on the proposed rule will probably be due in late January, a date based on its publication date in the Federal Register.

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