Dive Brief:

• Greensmith Energy and American Electric Power have struck a deal to install a 4 MW, 4 MWh energy storage system at two hydroelectric plants in Virginia.

• The companies say the energy installations at the Buck and Byllesby plants would be the first hybridized system of its kind to provide ancillary services.

• The system is slated to begin operation in first-quarter 2018, serving both of the PJM Interconnection’s frequency regulation markets.

Dive Insight:

Greensmith and AEP said the hybrid system will be the one of the first new energy storage systems since PJM’s adoption of new frequency regulation signals and requirements for regulation service.

PJM put the brakes on energy storage in 2015, imposing a cap on fast responding RegD resources. The cap limited RegD to no more than 26.2% of the regulation procurement during morning and afternoon ramp times. The cap was removed in August.

PJM imposed the cap because fast responding RegD resources were swamping the frequency response market and having adverse effects on traditional RegA resources.

PJM has since proposed rule changes aimed at creating a more level playing field for RegD and RegA resources. But the new rules have dimmed the interest of energy storage developers eager to tap PJM’s RegD market.

Greensmith and AEP said that by combining energy storage and hydroelectric plants, they will be able to serve both the RegA and RegD markets.

The hybrid project will “raise the standard for hydroelectric use-cases globally,” Greensmith CEO John Jung said in a statement. “The potential for hybridization is massive as hydroelectricity represents over 1,000 GW of generation globally, roughly a sixth of the world’s total.”