Dive Brief:
- The Midcontinent ISO (MISO) announced its plans in a conference call last week for integrating storage resources into its markets in compliance with the Federal Energy Regulatory Commission's (FERC) Order 841, according to RTO Insider.
- MISO also announced it has implemented five-minute settlements across its energy market following a year-long collaboration with customers and stakeholders. The grid operator says the move aligns generator energy payments in real time with five-minute system dispatch and pricing signals.
- Federal regulators' February decision directed MISO and other operators to change their rules to give energy storage broader access to participate in wholesale energy, capacity and ancillary services markets.
Dive Insight:
In MISO, officials are working to bring energy storage into the fold while modernizing market mechanisms.
The five-minute settlements are "an important step ... that improves the efficiency of our market operations and ensures pricing transparency for the energy being delivered in real time," said Shawn McFarlane, MISO executive director of market operations, in a statement.
The Midcontinent grid operator signals changing power needs and corresponding prices to electric generators every five minutes. Previously, however, those prices were averaged across the entire hour. According to the grid operator's Aug. 21 announcement, the new five-minute settlement function allows energy payments based on each signal and actual price.
"This allows the market to compensate generators for the true value of energy and its production cost, which can vary from each five-minute interval depending on changing demand and market conditions," McFarlane said.
The five-minute settlement is expected to encourage generator flexibility in "adapting to conditions as signals change," he said.
MISO is also continuing work to incorporate energy storage into its markets, per a FERC order earlier this year. Order 841 directed RTOs to incorporate rules to give energy storage broader access to participate in wholesale energy, capacity and ancillary services markets.
The grid operator has proposed the capacity of an energy storage resource be gauged on two measurements — power and energy — designed to give more latitude for the projects to participate in capacity and energy markets.
In a conference call last week discussing the storage integration plans, RTO Insider reported that officials sketched out more specifics on how storage would be incorporated, including providing make-whole payments to address volatility and setting in place dispatch and performance standards.
Storage would also be exempt from some lift charges on resources, which grid operators use when market revenues are insufficient to cover the operating costs.
The work to incorporate energy storage into wholesale markets is complicated: batteries can be either supply and load, but RTO rules generally take a binary approach to power system resources. They must be one or the other, not both.
MISO is also proposing that storage assets connected to its transmission system will require either network resource interconnection service or firm transmission service. MISO would ensure deliverability for distribution connected storage resources on a case by case basis by checking with the distribution provider and transmission owner.
The five-minute settlements MISO has implemented also resulted form FERC direction. Order 825 required all regional transmission operators to implement five-minute settlements. MISO was among those supporting the change.
