The Federal Energy Regulatory Commission unanimously voted Thursday morning to remove long-standing barriers to energy storage in power markets, an emerging technology that can solve renewable energy’s most persistent problem: how to use it when the sun isn’t shining or the wind isn’t blowing.
The FERC order requires regional grid operators, the Regional Transmission Organizations and Independent System Operators, to revise their pricing to recognize the benefits of energy storage and allow the technology to compete with generators in wholesale power markets.
RTOs and ISOs must file price changes in 270 days and will have one year to implement them.
Allowing energy storage to bid in power markets will enhance grid resilience, said Republican FERC Chairman Kevin McIntyre.
“Our job is not to pick winners and losers” but to ensure that all resources can compete fairly, he said.
Other commissioners said the rule is consistent with maintaining competitive market principles. FERC in 2016 determined that current market rules impose barriers to emerging technologies such as energy storage, because the rules were designed when regulators did not envision such innovations.
“Not only is this rulemaking a win for both consumers and industry, but it is also the kind of positive regulatory action that removes barriers to competition, allowing emerging technologies to compete in the marketplace,” said Neil Chatterjee, a Republican commission member. “Ultimately, that means greater reliability and lower costs for the American people. Put simply, it’s a good regulatory policy that people from all political backgrounds can support.”
Energy storage is not a power source. Rather, a battery or other energy storage resource carries excess energy that can be used when the sun sets and demand peaks later in the day.
About 800 megawatts of battery energy storage is deployed across the U.S. currently, according to the Energy Storage Association.
Industry forecasts predict installed energy storage in the country will grow by 750 percent in five years, mostly due to the declining cost of lithium-ion batteries, said FERC Commissioner Richard Glick, a Democrat.
A number of states, including California, New York, and Arizona, recently have proposed plans to expand the use of energy storage.
FERC members said they wanted to make the rollout of storage easier, with multiple members calling the technology a “game changer” as the grid transitions to depend more on renewable energy sources.
Renewable energy for the first time is generating nearly as much electricity as the nation’s entire fleet of 99 nuclear power plants, a new report issued Thursday by the Business Council on Sustainable Energy and Bloomberg New Energy Finance.
“Given the ongoing changes in our nation’s resource mix, storage is poised to provide a critically important role,” said Cheryl LaFleur, a Democrat on the commission. “Storage is like a Swiss army knife that can serve customers in multiple ways, including that it can provide energy, particularly in conjunction with variable renewable generation.”