Page 29 - ESJ – ENERGY STORAGE JOURNAL

COVER STORY: US STATES TO WATCH

was laid during the past 12 months with
a number of developments that laid the Olinsky-Paul: A good number of people in top
groundwork for further market expansion
and new business-model development in positions are interested in making Massachusetts the
2019. Silicon Valley for storage, making the state a place
These developments, according to Wood
Mackenzie, include: that attracts industry to set up shop in Massachusetts
• Federal Energy Regulatory Commis- to gain early mover advantage.
sion Order 841 filings that expand the
opportunities for storage participation
in wholesale markets especially as system prices continue to de-
• Programs that implement residential cline.”
storage to provide grid services, creat- Brattle’s 2018 study Getting to 50 GW?
ing new revenue streams for a segment The Role of FERC Order 841, RTOs, States,
historically limited to backup power and Utilities in Unlocking Storage’s Poten-
• Record low solar-plus-storage PPA pric- tial estimated at least half of the total value
ing that illustrates the technology con- storage could provide would be achievable
tinues to compete head-to-head with in wholesale electricity markets, with the
incumbent generation remainder accruing at the transmission and
• Battery supply shortages, which plagued distribution and customer level.
the market in 2018, are set to abate in A statement by the group to herald the
early 2019, which will alleviate system report noted: “To fully realize the value of
pricing issues electricity storage, including benefits related
to reduced T&D costs and reduced custom-
Taken together, such activity shows clear er outages, the FERC wholesale market re-
opportunities for the expansion of storage forms will have to be matched with similar
deployment. efforts at the state regulatory level.”
In terms of policy, anything where devel- In essence, the Brattle study showed the
opers can ensure demand will be helpful market could increase up to five-times by
when looking at the main challenges of de- combining the policy with state-level ini-
ploying grid-scale ESS in the US. tiatives, compared to a future that limited
A major development came on February storage to capturing only wholesale market
15, 2018, when FERC passed Order 841. benefits.
The order, first proposed in November “Ultimately, the more sure the demand,
2016, sets out rules for the participation of the more likely industry is to start spend-
electric storage resources in the capacity, en- ing,” says Babinec.
ergy, and ancillary service markets.
The ruling stated its goal was: “To remove
barriers to the participation of electric stor-
age resources in the regional transmission Simon: Massachusetts and New York could pull
organization and independent system op-
erator markets.” ahead of Hawaii in the BTM market because policy
The draft Final Rule requires each RTO initiatives will lead to storage market growth in both
and ISO to revise its tariff to establish a states, starting in the early 2020s.
participation model consisting of market
rules that, recognizing the physical and op-
erational characteristics of electric storage
resources, facilitates their participation in
the RTO and ISO markets. In other words,
it removed barriers that prevented stor-
age resources from realizing multiple value
streams.
Although there are some concerns — eco-
nomic, regulatory and market barriers —
consulting firm Brattle Group found there
was a potential to add 50GW over the next
decade if storage costs continued to decline
and state regulatory policies built upon the
order.
“Policy changes are underway in New
York to open the door for more storage,”
says Simon. “These include opportunities
in wholesale markets spinning out of FERC
Order 841. As more BTM storage is able to
access wholesale market revenue streams,
we’ll see further opportunity for growth,

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