On Monday, August 9, NAATBatt filed comments with the Federal Energy Regulatory Commission (FERC) in response for FERC’s solicitation for guidance from industry on how to better regulate and administer grid-connected energy storage technology. This topic is of critical interest to the advanced battery industry as well as to automakers hoping to produce plug-in electric vehicles (PEV’s) that will be acceptable to mass market consumers. It seems increasingly clear that one of the most effective ways of reducing the cost of PEV batteries, and therefore reducing the cost of PEV’s so that many consumers will want to buy them, is by using the grid-connected stationary power market to increase advanced battery production volumes and to provide a secondary use for retired PEV batteries.
In our comments to FERC we asked for three things. First, we asked FERC to recognize that the only way that distributed energy storage—the type of storage most likely to use batteries that are compatible with PEV applications—can be commercially successful is if distributed storage facilities are permitted to recover multiple streams of revenue for the multiple functions that a single facility can perform on the grid. For example, a group of community energy storage (CES) units linked together by a single CES hub can provide local back-up power to a local community during peak times but also sell aggregated, multi-megawatt power into the wholesale market during non-peak times. The regulatory scheme for electricity sales in the United States does not currently contemplate or easily permit such multi-function sales.
Second, we called FERC’s attention to an issue that has been the subject of this column in the past: The possible inability of distributed energy storage facilities to access FERC transmission incentive rates that are available, under FERC’s Western Grid Development order, to larger, centralized bulk energy storage facilities, such as NaS battery and pumped hydro storage facilities. The FERC incentive transmission rates are intended to provide greater than usual returns on investments in transmission technology in order to encourage the modernization of the grid. The problem, of course, is that distributed energy systems, even though they can relieve congestion and otherwise impact the transmission system, physically interconnect into local distribution systems, rather than farther up line into the distribution system itself. As a consequence it is not clear that distributed energy storage systems can ever be subject to FERC jurisdiction and incentive transmission rates, even though they can perform the same transmission-related function as centralized bulk storage facilities. We have asked FERC to look into this problem and to help “level the playing field.”
Finally, we have asked FERC to convene a technical workshop on distributed energy storage technology. There would be much for such a workshop to discuss. In addition to the two other issues highlighted in our comments, participants would need to think through how to define the different functions that distributed energy storage facilities serve for purposes of compensation, how best to account for and report those functions, and what business models are likely to evolve by which these multifunction distributed energy facilities will be developed and operated. While distributed energy storage facilities share many of these same issues with centralized bulk energy storage technologies, which have largely been the focus of FERC’s attention to date, distributed energy storage involves additional issues and complexities that must be better understood and worked through. NAATBatt has asked FERC to examine those issues specifically and hopes to be an important resource for FERC as its position on distributed energy storage technology develops and evolves.
NAATBatt’s next effort to promote distributed energy storage technology will be to meet with representatives of state public utilities commissions and call their attention to many of the same issues that NAATBatt raised in its comments to FERC. NAATBatt hopes to sponsor an industry meeting with the National Association of Regulatory Utility Commissioners (NARUC) in the fall. Details will follow soon.
A full text of the comments that NAATBatt filed with FERC on Monday can be found at: http://naatbatt.org/publications/articles/.
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NAATBatt Files Comments with FERC Highlighting the Opportunities and Challenges of Distributed Energy Storage
by James Greenberger on August 13, 2010
On Monday, August 9, NAATBatt filed comments with the Federal Energy Regulatory Commission (FERC) in response for FERC’s solicitation for guidance from industry on how to better regulate and administer grid-connected energy storage technology. This topic is of critical interest to the advanced battery industry as well as to automakers hoping to produce plug-in electric vehicles (PEV’s) that will be acceptable to mass market consumers. It seems increasingly clear that one of the most effective ways of reducing the cost of PEV batteries, and therefore reducing the cost of PEV’s so that many consumers will want to buy them, is by using the grid-connected stationary power market to increase advanced battery production volumes and to provide a secondary use for retired PEV batteries.
In our comments to FERC we asked for three things. First, we asked FERC to recognize that the only way that distributed energy storage—the type of storage most likely to use batteries that are compatible with PEV applications—can be commercially successful is if distributed storage facilities are permitted to recover multiple streams of revenue for the multiple functions that a single facility can perform on the grid. For example, a group of community energy storage (CES) units linked together by a single CES hub can provide local back-up power to a local community during peak times but also sell aggregated, multi-megawatt power into the wholesale market during non-peak times. The regulatory scheme for electricity sales in the United States does not currently contemplate or easily permit such multi-function sales.
Second, we called FERC’s attention to an issue that has been the subject of this column in the past: The possible inability of distributed energy storage facilities to access FERC transmission incentive rates that are available, under FERC’s Western Grid Development order, to larger, centralized bulk energy storage facilities, such as NaS battery and pumped hydro storage facilities. The FERC incentive transmission rates are intended to provide greater than usual returns on investments in transmission technology in order to encourage the modernization of the grid. The problem, of course, is that distributed energy systems, even though they can relieve congestion and otherwise impact the transmission system, physically interconnect into local distribution systems, rather than farther up line into the distribution system itself. As a consequence it is not clear that distributed energy storage systems can ever be subject to FERC jurisdiction and incentive transmission rates, even though they can perform the same transmission-related function as centralized bulk storage facilities. We have asked FERC to look into this problem and to help “level the playing field.”
Finally, we have asked FERC to convene a technical workshop on distributed energy storage technology. There would be much for such a workshop to discuss. In addition to the two other issues highlighted in our comments, participants would need to think through how to define the different functions that distributed energy storage facilities serve for purposes of compensation, how best to account for and report those functions, and what business models are likely to evolve by which these multifunction distributed energy facilities will be developed and operated. While distributed energy storage facilities share many of these same issues with centralized bulk energy storage technologies, which have largely been the focus of FERC’s attention to date, distributed energy storage involves additional issues and complexities that must be better understood and worked through. NAATBatt has asked FERC to examine those issues specifically and hopes to be an important resource for FERC as its position on distributed energy storage technology develops and evolves.
NAATBatt’s next effort to promote distributed energy storage technology will be to meet with representatives of state public utilities commissions and call their attention to many of the same issues that NAATBatt raised in its comments to FERC. NAATBatt hopes to sponsor an industry meeting with the National Association of Regulatory Utility Commissioners (NARUC) in the fall. Details will follow soon.
A full text of the comments that NAATBatt filed with FERC on Monday can be found at: http://naatbatt.org/publications/articles/.
Tagged as: comments, community energy storage, distributed energy storage, electricity distribution, electricity transmission, Federal Energy Regulatory Commission, ferc, lithium batteries, Lithium-ion, NAATBatt, NARUC, NaS, PEV, PEV's, plug-in electric vehicle, transmission, transmission incentive rates