FERC accepts market changes to accommodate energy storage in ISO-NE energy markets

The changes, which go into effect December 2018, provide greater flexibility for new storage technologies to participate in the wholesale electricity marketplace

On December 9, 2016, the Federal Energy Regulatory Commission (FERC) accepted changes to ISO New England’s market rules to allow energy storage to participate as dispatchable resources in the Day-Ahead and Real-Time Energy Markets, while continuing to participate as alternative technology regulation resources (ATRRs) in the Regulation Market.

Dispatchable energy resources are those that can start up, shut down, raise, or lower output when called upon by the ISO control room to meet current consumer demand. Regulation resources respond to second-to-second signals to help instantaneously balance the grid’s frequency and maintain scheduled interchange. System frequency must be kept within close tolerances in order to avoid damage to system components and/or potential blackouts. Scheduled interchange must be maintained in order to prevent overloading of transmission lines and energy imbalances.

New England’s energy storage resources, which have historically been pumped storage facilities, have participated in ISO energy markets for many years as dispatchable resources. However, new battery storage technologies, which are typically smaller (fewer megawatts and less megawatt-hour capability), are able to transition from supplying to consuming power relatively seamlessly. Existing rules limit ATRRs participation to the Regulation Market only; the new rules will enable storage technologies to also participate in the energy markets as price-based resources—on both the supply side and the consumption side—using the existing generation and dispatchable asset related demand (DARD) models. 

The ISO has made significant market enhancements in recent years to facilitate reliable operation and improve accurate price formation by bringing more and more resources, in both quantity and type, under economic dispatch in the energy markets. Storage technology is developing rapidly and is expected to have increased levels of participation in the markets in coming years as costs associated with storage continue to decline and levels of intermittent renewable resources in the markets continue to increase. Massachusetts officials recently announced the state intends to set a goal for energy storage deployment. Currently, more than 90 megawatts (MW) of storage systems are in the ISO’s interconnection queue, while a 16-MW battery facility was recently interconnected to the regional grid in Maine.

Learn more about how ISO New England has worked to make it easier for energy storage to participate in the region’s markets:

Inside ISO New England
energy markets, energy storage, FERC, regulation market