FERC issues final rule that will compensate energy storage-based resources that provide reliability services on electric grid; ruling will begin to set structure for fast-responding resources to be paid for actual performance, Energy Storage Assn. says
October 20, 2011
– The Electricity Storage Association (ESA) commends the Federal Energy Regulatory Commission (FERC) for issuing a final rule on October 20, 2011, that will justly compensate energy storage-based resources that provide certain key reliability services on the electric grid. The ruling, which applies to all organized wholesale power market regions under FERC jurisdiction, will begin to set the structure for fast-responding resources to be paid for actual performance.
For resources like energy storage that can adjust their performance quickly and accurately in response to signals from grid system operators, this rule will allow for the true value of their superior frequency regulation performance to be measured and compensated. The ESA Advocacy Council had responded to FERC's Notice of Proposed Rulemaking with extensive comments, noting that paying for performance on the bulk power system will sustain the viability of existing advanced storage regulation plants; encourage investment in future storage facilities; and enable the grid and consumers to experience the economic, reliability and environmental benefits that fast-responding resources bring to the grid.
"We applaud FERC for its pro-active approach to ensuring that markets are just and reasonable for new fast-ramping storage resources," said Brad Roberts, Executive Director of ESA. "This rule lays the groundwork for significant revenue enhancement in the electricity markets for these advanced resource technologies."
"We have shovel-ready energy storage projects along with associated potential jobs that have been waiting for financial commitments from investors," said Judith Judson of Beacon Power and Chairperson of the ESA Advocacy Council. "With this final rule, we hope to see a much greater willingness by the private sector to support these new technologies. We urge FERC and the grid system operators to work toward timely implementation of the rule."
Katherine Hamilton, policy director of ESA, goes a step further. "This is, in fact, an appropriate role for government—putting the structures in place that can create a market for U.S. innovation to thrive. FERC has taken bold action to make economically sensible rules to value energy storage; now Congress and the states can take those next steps to moving our electric grid into the 21st century—with energy storage."
The ESA Advocacy Council will continue to work on issues with FERC, the states, and Congress to ensure that this new home-grown industry is fully supported by appropriate policies.
Headquartered in Washington, D.C., ESA is the preeminent trade association dedicated to fostering the development and commercialization of energy storage technologies as a means to solving the nation's energy and power challenges.
ESA's membership is comprised of a diverse group of electric utilities; energy service companies (ESCOs); independent power producers (IPPs); energy storage technology developers and suppliers; and those in the energy storage research community. The ESA Advocacy Council currently has eleven members, including: A123 Systems, Inc., AES Energy Storage, Altairnano, Aquion Energy, Beacon Power, FIAMM, Prudent Energy Corporation, S&C Electric Company, Saft America, Inc., SustainX, and Xtreme Power. The ESA is a 501(c)(6) trade association that was formed in 1996.