FERC 841 Compliance Update Hosted by Todd Olinsky-Paul, Project - - PowerPoint PPT Presentation

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FERC 841 Compliance Update Hosted by Todd Olinsky-Paul, Project - - PowerPoint PPT Presentation

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Energy Storage Technology Advancement Partnership (ESTAP) Webinar FERC 841 Compliance Update Hosted by Todd Olinsky-Paul, Project Director, CESA October 1, 2019 Housekeeping Join audio: Choose Mic & Speakers to use VoIP Choose

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FERC 841 Compliance Update

Hosted by Todd Olinsky-Paul, Project Director, CESA October 1, 2019

Energy Storage Technology Advancement Partnership (ESTAP) Webinar

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Housekeeping

Join audio:

  • Choose Mic & Speakers to use VoIP
  • Choose Telephone and dial using the

information provided Use the orange arrow to open and close your control panel Submit questions and comments via the Questions panel This webinar is being recorded. We will email you a webinar recording within 48

  • hours. This webinar will be posted on

CESA’s website at www.cesa.org/webinars

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www.cesa.org

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Energy Storage Technology Advancement Partnership (ESTAP) (bit.ly/ESTAP)

ESTAP Key Activities:

  • 1. Disseminate information to stakeholders
  • 2. Facilitate public/private partnerships to support joint

federal/state energy storage demonstration project deployment

  • 3. Support state energy storage efforts with technical, policy

and program assistance

  • ESTAP listserv >5,000 members
  • Webinars, conferences, information

updates, surveys.

Massachusetts: $40 Million Resilient Power/Microgrids Solicitation: 11 projects $10 Million energy storage demo program Alaska: Kodiak Island Wind/Hydro/ Battery & Cordova hydro/battery projects Northeastern States Post-Sandy Critical Infrastructure Resiliency Project New Jersey: $10 million, 4-year energy storage solicitation: 13 projects Pennsylvania Battery Demonstration Project Connecticut: $50 Million, 3-year Microgrids Initiative: 11 projects Maryland Game Changer Awards: Solar/EV/Battery & Resiliency Through Microgrids Task Force

ESTAP Project Locations:

Oregon: 500 kW Energy Storage Demonstration Project New Mexico: Energy Storage Task Force Vermont: 4 MW energy storage microgrid & Airport Microgrid New York: $40 Million Microgrids Initiative Hawaii: 6MW storage on Molokai Island and HECO projects

ESTAP is supported by the U.S. Department of Energy Office of Electricity and Sandia National Laboratories, and is managed by CESA.

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Webinar Speakers

Todd Olinsky-Paul Project Director, Clean Energy States Alliance (moderator) Dan Finn Foley Senior Analyst – Energy Storage, Wood Mackenzie Power and Renewables Jason Burwen Vice President – Policy, Energy Storage Association

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Thank you for attending our webinar

Todd Olinsky-Paul Project Director, CESA todd@cleanegroup.org Find us online: www.cesa.org facebook.com/cleanenergystates @CESA_news on Twitter

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Upcoming Webinar

Read more and register at: www.cesa.org/webinars

Replacing Power Plants with Low-Income Residential Solar+Storage

Thursday, October 10, 1-2pm ET In this webinar, East Bay Community Energy and Sunrun will share details of a new project in California that will deploy solar and battery storage systems in low-income single-family and multifamily homes to offset the need for reliance on fossil-fuel powered peaker plants.

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Energy Storage Markets and FERC Order 841

ESTAP Webinar

Jason Burwen Vice President, Policy October 1, 2019

www.energystorage.org

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SUBTITLE Click to edit Master title style Our Members

  • manufacturers
  • component suppliers
  • system integrators
  • developers
  • independent

generators

  • electric utilities
  • large end-users
  • law, finance,

consulting

Technologies represented

  • battery storage
  • thermal storage
  • mechanical storage
  • power-to-gas storage
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1) Intro to FERC Order 841 2) Current compliance activities & complaints 3) What comes after Order 841

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In this presentation

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  • “To remove barriers to the participation of electric storage

resources in the capacity, energy, and ancillary service markets operated by Regional Transmission Organizations (RTO) and Independent System Operators (ISO).”

  • “To enhance competition and, in turn, help to ensure that

the RTO/ISO markets produce just and reasonable rates.”

  • “Furthermore, due to electric storage resources’ unique

physical and operational … our actions here will help support the resilience of the bulk power system.”

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Why did FERC issue Order 841?

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  • Clarifies and regularizes energy storage participation in wholesale

markets for energy, ancillary services, and capacity

  • Lays foundation for greater flexibility in wholesale market operations
  • Compliance activities underway
  • Complaints by ESA and parties being litigated at FERC
  • Intended to have effective compliance by December 2019
  • Delays requested by NYISO, SPP, MISO
  • PJM & ISO-NE have been implementing manuals changes—face uncertainty from lack of

FERC action

  • FERC has re-affirmed Order 841 against rehearing requests
  • NARUC and others petitioning DC Circuit for review, concern over applicability to

DER storage as FPA violation

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What is FERC Order 841?

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  • Order 841 removes barriers to storage by requiring RTOs to implement

a “participation model” that…

  • Enables storage to provide all market services technically capable of providing
  • Implements bidding parameters or other means to reflect physical & operational

characteristics

  • Enables storage projects as small as 100 kW to participate (including DER storage)
  • Regularizes buying and selling of energy at wholesale LMP for storage
  • Order 841 does not…
  • Create or modify market products
  • Amend interconnection, transmission planning, or other RTO functions
  • Require larger changes to commitment, optimization, scheduling, and dispatch

What FERC Order 841 Does & Does Not Do

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  • PJM
  • Dispute 10-hour duration for capacity qualification and market participation
  • MISO
  • Dispute application of transmission fees to storage charging at ISO instruction – resolved in rehearing
  • rder
  • ISO-NE
  • Object to automatic redeclaration of storage energy output to meet reserve requirements – being

addressed in stakeholder committee

  • NYISO
  • Object to bias against self-management of state of charge & lack of make-whole payments for storage in

capacity market

  • Object to modifications of market mitigation rules – new dockets at FERC expand on this
  • Cross-cutting
  • Lack of or inappropriate utilization of commitment parameters (PJM, ISO-NE, NYISO)
  • Barriers to dual participation of DER storage (MISO, NYISO)
  • Prospective
  • Lack of clarity for how to apply to hybrid resources (i.e., storage + generation)
  • Unclear market mitigation rules

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ESA Concerns in RTO Order 841 Compliance Plans

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  • PJM proposes to base ICAP on non-hydro storage output over 10 hours
  • Based on 20% penetration of storage = 30 GW of storage (!)
  • ESA disputes PJM proposal as inappropriate barrier to capacity market
  • ESA-commissioned study finds 4 GW of 4-hr storage & 10 GW of 6-hr storage would

contribute full capacity value

  • Mirrors proposed change in NYISO to vary capacity value by duration & incremental

deployment level

  • MISO/SPP: 4-hr qualification for 100% capacity value; ISO-NE: 2-hr test (performance market)
  • If FERC accepts, PJM can dial up or down storage participation via manuals
  • Uniform “capacity value” in tension with heterogeneous resources
  • Storage has limited energy
  • Generators have forced outage conditions
  • Renewables lack dispatchability
  • Demand resources are block-loaded

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Capacity Value of Storage

Different reliability contribution profiles → relative capacity contributions, which may change with supply mix

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Recent Findings on Capacity Value of Storage

Analysis of PJM (Current) by Astrape Consulting Analysis of PJM Futures by NREL NYISO Tariff Filing

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  • While 100 kW units may participate, overall DER storage participation

can be unclear

  • MISO proposes to limit and phase in “very small” storage participation
  • NYISO proposes to require BTM storage to elect only wholesale or only retail energy

– de facto prohibition on dual participation

  • Subject to FERC rehearing on state authority to regulate DER participation
  • Compromise offered by AR PSC
  • Important for both behind-the-meter storage and front-of-meter

distribution-connected storage

  • Multiple-use frameworks sought to maximize utilization and value of storage for grid
  • Challenges on accounting for wholesale versus retail transactions,

method for conflicting dispatch

  • CA and NY seeking to enable dual participation providing guidance from retail side
  • More detail to come in FERC Docket RM18-9 on DER participation

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Dual Participation of DER Storage

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  • Unclear how Order 841 will be applied to hybrid

resources

  • ESA seeks a technical conference or notice of inquiry at

FERC

  • Several classes of issues merit discussion
  • Interconnection
  • Market participation
  • Capacity valuation
  • ESA + GridStrategies have released Enabling

Versatility: Allowing Hybrid Resources to Deliver Their Full Value to Customers

  • Summarizes main issues and potential remedies—

jumping off point for reforms

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Hybrid Storage + Generation Model

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  • Market products & designs to take advantage of storage flexibility
  • Fast frequency control
  • ERCOT to implement first US market for fast frequency response
  • Load/supply-shift product (as opposed to arbitrage
  • Improved energy price formation for flexibility
  • Interconnection updates
  • Study methods that account for intended use (i.e., not charging on peak)
  • Storage-as-transmission
  • Regulatory framework for “interconnection,” RTO/ISO control, cost recovery,

interactions with generation

  • Nov 5-6 FERC workshop may include discussion
  • Transmission planning methods and data

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Order 841 Starting Other Conversations

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Thank you

Jason Burwen j.burwen@energystorage.org

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Trusted Power and Renewables Intelligence woodmac.com

Potential effects of wholesale eligibility on the storage market

Dan Finn-Foley, Head of Energy Storage, Wood Mackenzie Power & Renewables

October 2019

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1 FERC order 841 compliance - potential effects of wholesale eligibility woodmac.com

woodmac.com

P O W E R & R E N E W A B L E S R E S E A R C H

Our market intelligence coverage includes:

GTM Research is now Wood Mackenzie Power & Renewables We focus on the critical intersections of technologies, policies and actors reshaping the energy landscape

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Our content is accessible through:

Topical market reports Recurring core datasets Direct analyst access Online data hub platform Exclusive executive council meetings Industry conferences

Contact power@woodmac.com to learn more about our power & renewables research suite.

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2 FERC order 841 compliance - potential effects of wholesale eligibility woodmac.com

Key policy – Massachusetts’ Clean Peak Standard New value stream relies on wholesale market participation to reach scale Key trends – California resource adequacy and duck curve response. Key Market – wind- heavy regions in the Midwest Bellwether market – NYISO incentives structures could provide signposts for future markets as costs drop What about Texas? First signs of BTM aggregation

  • ccurring in ISO-NE
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3 FERC order 841 compliance - potential effects of wholesale eligibility woodmac.com

Source: Wood Mackenzie Power & Renewables

Total FTM pipeline swells to over 67 GW following latest ISO cluster applications

This represents a 67% increase to the pipeline, following a pattern of rapid growth in Q2 and Q3 each year

U.S. front-of-the-meter energy storage pipeline market share, Q3 2015-Q2 2019 (%) U.S. front-of-the-meter energy storage pipeline by market, Q3 2015- Q2 2019 (MW)

 Most interconnection queues grew massively this quarter, which combined with several large-scale utility announcements increased the pipeline to record levels. While California did retake its position as the holder of more than 50% of the market, it only barely reached this benchmark, showing that other markets continue to see interest. 10,000 20,000 30,000 40,000 50,000 60,000 70,000

Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019

Total FTM energy storage pipeline (MW) Arizona California Colorado Florida Hawaii Massachusetts Nevada New Jersey New York PJM (Exc. NJ) Texas All Others 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019

Total FTM pipeline share over time (% of MW) Arizona California Colorado Florida Hawaii Massachusetts Nevada New Jersey New York PJM (Exc. NJ) Texas All Others

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4 FERC order 841 compliance - potential effects of wholesale eligibility woodmac.com

Name that ISO – occurrence of negative price signals by hour

0% 1% 2% 3% 4% 5% 6% 7% 8% 01:00 03:00 05:00 07:00 09:00 11:00 13:00 15:00 17:00 19:00 21:00 23:00 Percentage of 1-hour Intervals Zone - CAISO NP15 Zone - CAISO PG&E Zone - CAISO SCE Zone - CAISO SDG&E Zone - CAISO SP15 Zone - CAISO ZP26 Zone - California-Oregon Border (COB) Zone - Jim Bridger Zone - Mead Zone - Nevada Power North Zone - Nevada Power South Zone - Palo Verde Zone - Utah Zone - Wyoming

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5 FERC order 841 compliance - potential effects of wholesale eligibility woodmac.com

Name that ISO – occurrence of negative price signals by hour

0% 1% 2% 3% 4% 5% 6% 7% 8% 01:00 03:00 05:00 07:00 09:00 11:00 13:00 15:00 17:00 19:00 21:00 23:00 Percentage of 1-hour Intervals Zone - CAISO NP15 Zone - CAISO PG&E Zone - CAISO SCE Zone - CAISO SDG&E Zone - CAISO SP15 Zone - CAISO ZP26 Zone - California-Oregon Border (COB) Zone - Jim Bridger Zone - Mead Zone - Nevada Power North Zone - Nevada Power South Zone - Palo Verde Zone - Utah Zone - Wyoming

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6 FERC order 841 compliance - potential effects of wholesale eligibility woodmac.com

Name that ISO – occurrence of negative price signals by hour

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 01:00 03:00 05:00 07:00 09:00 11:00 13:00 15:00 17:00 19:00 21:00 23:00 Percentage of 1-Hour Intervals Zone - SPP Board of Public Utilities Kansas City Zone - SPP Empire District Electric Zone - SPP Grand River Dam Authority Zone - SPP Independence Missouri Zone - SPP Kansas City Power & Light Zone - SPP Lincoln Electric System Zone - SPP Missouri Public Service Zone - SPP Nebraska Public Power District Zone - SPP Oklahoma Gas & Electric Zone - SPP Omaha Public Power District Zone - SPP Southwestern Public Service Zone - SPP Springfield Missouri Zone - SPP Sunflower Electric Power Corporation Zone - SPP Westar Energy Zone - SPP Western Farmers Electric Cooperative Zone - SPP--WAPA Upper Great Plains Missouri East

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7 FERC order 841 compliance - potential effects of wholesale eligibility woodmac.com

Name that ISO – occurrence of negative price signals by hour

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 01:00 03:00 05:00 07:00 09:00 11:00 13:00 15:00 17:00 19:00 21:00 23:00 Percentage of 1-Hour Intervals Zone - SPP Board of Public Utilities Kansas City Zone - SPP Empire District Electric Zone - SPP Grand River Dam Authority Zone - SPP Independence Missouri Zone - SPP Kansas City Power & Light Zone - SPP Lincoln Electric System Zone - SPP Missouri Public Service Zone - SPP Nebraska Public Power District Zone - SPP Oklahoma Gas & Electric Zone - SPP Omaha Public Power District Zone - SPP Southwestern Public Service Zone - SPP Springfield Missouri Zone - SPP Sunflower Electric Power Corporation Zone - SPP Westar Energy Zone - SPP Western Farmers Electric Cooperative Zone - SPP--WAPA Upper Great Plains Missouri East

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8 FERC order 841 compliance - potential effects of wholesale eligibility woodmac.com

83 46 65 227 231 224 311 478 4,834

  • 500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 2012 2013 2014 2015 2016 2017 2018 2019E 2020E 2021E 2022E 2023E 2024E Energy storage deployments by segment (MW) Residential Non-Residential Front-of-the-Meter

Source: Wood Mackenzie Power & Renewables

U.S. energy storage annual deployments will reach over 4.8 GW by 2024

Utility procurements, changing tariffs and grid service opportunities all drive the market forward

U.S. energy storage annual deployment forecast, 2012-2024E (MW)

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9 FERC order 841 compliance - potential effects of wholesale eligibility woodmac.com

85 51 89 168 341 449 778 1,131 15,487

  • 2,000

4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 2012 2013 2014 2015 2016 2017 2018 2019E 2020E 2021E 2022E 2023E 2024E Energy storage deployments by segment (MWh) Residential Non-Residential Front-of-the-Meter

Source: Wood Mackenzie Power & Renewables

U.S. market will reach 15.5 GWh in annual deployments by 2024

4-hour systems becoming the norm for front-of-the-meter systems; average BTM durations inch toward 3 hours

U.S. energy storage annual deployment forecast, 2012-2024E (MWh)

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10 FERC order 841 compliance - potential effects of wholesale eligibility woodmac.com

Source: Wood Mackenzie Power & Renewables Note: GWh outlook analysis is included in the full report.

U.S. storage ITC forecast: Annual deployments reach 5.1 GW by 2024, up from annual deployments of 4.8 GW in base case

  • 1,000

2,000 3,000 4,000 5,000 6,000 2019E 2020E 2021E 2022E 2023E 2024E ITC case storage forecast (MW) Residential - Base Residential - Incremental Non-Residential - Base Non-Residential - Incremental Front-of-the-Meter - Base Front-of-the-Meter - Incremental

U.S. energy storage market outlook with storage ITC, 2019E-2024E (MW)

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11 FERC order 841 compliance - potential effects of wholesale eligibility woodmac.com

$249 $111 $135 $297 $314 $317 $487 $720 $5,122 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 2012 2013 2014 2015 2016 2017 2018 2019E 2020E 2021E 2022E 2023E 2024E Annual energy storage market size (million $) Residential Non-Residential Front-of-the-Meter

Source: Wood Mackenzie Power & Renewables. Note: Market size is reported as energy storage system deployment revenue (product of deployments and installed system prices).

U.S. energy storage will be a $5.1 billion market in 2024

Annual value to more double between 2019 and 2020

U.S. annual energy storage market size, 2012-2024E (million $)