By Rory D. Sweeney

WASHINGTON — Energy storage is providing tangible benefits to the grid, and rules need to be implemented to ensure it finds its proper place, a panel of experts told regulators last week at the National Association of Regulatory Utility Commissioners’ winter meetings.

Storage “all felt very on the fringe. And now, especially with the FERC [Notice of Proposed Rulemaking] that was just issued, it’s more in the mainstream,” said Public Utilities Commission of Ohio Chairman Asim Haque, who moderated the panel.

“I think almost everyone believes we’ll have more storage in the future than we do now, and I don’t think we know in the long run how it will develop. … I think if it develops to the extent that we think it might be developing, it will just be its own thing,” acting FERC Chairman Cheryl LaFleur said. “You’ll say electricity is: generation, transmission, distribution and storage, rather than fitting it into the others.”

‘Capacity Value’

With its ability to act quickly, storage is providing significant “capacity value,” ICF International’s Ken Collison said. Capacity value is the capability to provide firm energy in the hour of need: A combined cycle unit with a forced outage rate of 5% has a 95% capacity value, meaning it is available on a firm basis 95% of the time. ICF’s research found that a 100-MW storage system with one hour of stored energy can provide 46 MW of firm capacity (46% capacity value), while one with four hours of storage can provide 99 MW of firm capacity.

Storage is unique because it can be both a load when needed and a generation resource when needed, Collison said.

That reaction speed translates to value for customers. Ned Bartlett, Massachusetts’ undersecretary of energy and environmental affairs, said the hours with the top 1% of demand account for 8% of ratepayers’ costs, and the top 10% account for 40%. That represents “remarkable peak opportunities” for storage, he said.

However, storage’s flexibility also creates some regulatory issues, LaFleur said. Previous precedent has limited installations to either cost-based transmission rates or market-based services. FERC believes that is too limiting, she said, and issued a policy statement in January to clarify that the commission is open to opportunities for units to serve both roles but with protections to ensure they aren’t paid twice for the same service. (See Storage Can Earn Cost- and Market-Based Rates, FERC Says.)

LaFleur’s Dissent

“I dissented on that order. I was concerned with some of the broader language in the policy statement about the potential impacts on wholesale markets of having other payments streams,” she said. “I thought it came awfully close to implicating some of the questions we have pending before us now with respect to state policy initiatives and how they’re valued in the wholesale markets, which I know we’ll be looking at.” (See related story, LaFleur Plans Tech Conference on State Generator Supports.)

Among the flurry of orders the commission issued before former Chairman Norman Bay resigned Feb. 3, FERC also ruled on a complaint by Indianapolis Power and Light, finding that MISO’s Tariff unreasonably limits the services energy storage can provide. It ordered the RTO to craft more inclusive Tariff language within 60 days. (See MISO Ordered to Change Storage Rules Following IPL Complaint.)

Collison noted that one of the biggest advantages of storage is it presents less permitting and siting issues. “You can site it at the place of need,” he said.

And sometimes, it’s even mobile. “The number of people who come up to you and describe the different things they’re doing with car batteries, including charging at work, bringing it home and powering the house from it. Really exciting; really confusing at times,” Bartlett said.

Massachusetts’ “ambitious” goal is to have 300,000 electric vehicles on the road by 2025, he said.