Dive Brief:
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Stakeholders in the Midcontinent Independent System Operator (MISO) are wrestling with how to expand the participation of energy storage in the wholesale market into the medium-term market, defined as electrical output for up to four hours, RTO Insider reports.
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Several stakeholders are pushing to expand storage beyond participation as an ancillary service and also do not want to see storage limited by having it characterized as a single type of resource.
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MISO hopes to present a final near-term storage proposal to stakeholders in late summer or fall.
Dive Insight:
MISO is in the process of revising its policies regarding energy storage. MISO incorporated storage into its tariff in 2009, but storage has not grown as quickly as it has in MISO’s eastern neighbor, the PJM Interconnection.
Last week a MISO subcommittee discussed how it might include medium-term storage in the demand resource resource-type II dispatch model, which facilitates offers into the markets for energy, regulation, spinning and supplemental reserves, RTO Insider reports.
Medium term is defined as a storage technology that can sustain output to the grid for four hours.
“MISO needs to keep pace with market changes in order to meet its obligation to provide unbiased regional grid management and open access to transmission facilities for [storage] projects,” the Minnesota Energy Storage Alliance (MESA) said in written comments to the RTO. “Our generation mix in MISO is evolving, and energy storage technologies are becoming cost-effective in many applications,” MESA wrote.
MESA argues that storage can cut consumer costs by storing “otherwise curtailed generation,” and the group says storage could be classified as both a generation and transmission service.
There is already one storage project under way in MISO. AES Corp. subsidiary Indianapolis Power & Light in June announced plans for a 20-MW battery project in Marion County, Indiana, that will deliver enhanced grid reliability and ancillary services. The project would provide energy equivalent to 40 MW of flexible resource to the electric grid, and is expected online this summer.
Whether or not other projects follow suit could depend on how MISO sets the tariffs for storage.
John Fernandes, director of policy and market development for Renewable Energy Systems Americas, said restricting storage from providing services across operational buckets reduces the benefits that storage can provide.
Invenergy, which operates 68 MW of battery storage in PJM’s frequency regulation market but none in MISO, said the RTO has yet to clearly define the market need for storage. “Energy storage, and more specifically battery storage, is not the same as traditional generation and it should not be modeled or studied in the same way,” wrote Nicole Luckey, Invenergy manager of Midwest regulatory affairs.
Manitoba Hydro said storage will be increasingly required because of the growth of wind and solar resources, but in the absence of an adequate revenue stream for storage resources, there may well be a market failure to supply them.
“Some of these issues are beyond the [Market Subcommittee],” Yonghong Chen, MISO’s principal advisor of market development and analysis, told RTO Insider.
“I think we need a broader policy discussion,” he said. MISO, meanwhile, is debating setting up an energy storage task force.
Next month, staff will begin drafting a white paper, which could propose tariff or business practices manual revisions. MISO hopes to present a final near-term storage proposal to stakeholders in late summer or fall.