Energy storage underused as transmission asset amid unresolved questions, experts say

Dive Brief:

• Projects in Wisconsin and California show that bulk energy storage is a potentially valuable transmission grid asset, panelists said Sept. 17 on a Heatmap Labs webinar. The projects flagged by the panel include a first-of-its-kind partnership between Pacific Gas & Electric and East Bay Community Energy that replaced a 165-MW jet fuel-fired Oakland peaker plant with 43.25 MW/173 MWh of battery storage while boosting reliability.
• The Federal Energy Regulatory Commission has determined that energy storage can be classified as a transmission asset when “[it does] something for the grid that it can’t do through a market,” including mitigating thermal overload, delivering voltage support or reactive power, and providing backup when high-voltage transmission lines fail, said panelist Jeremy Twitchell, an energy policy analyst at Pacific Northwest National Laboratory.
• But energy storage remains underused in the transmission grid due to unresolved regulatory and market design questions at the grid operator level, especially around “dual-use” storage assets that provide both market and reliability services, Twitchell said.

Dive Insight:

The regulatory framework governing the role of energy storage as a transmission grid asset was developed in the years following the enactment of the Energy Policy Act of 2005, which laid the legal groundwork for the classification, Twitchell said.

FERC’s responses to two California energy storage developers’ requests for their respective projects to be classified as transmission — “no” in 2008 to a Nevada Hydro pumped hydropower facility to be managed by the California Independent System Operator, and “yes” in 2010 to a Western Grid molten salt battery facility that FERC said “resolved the issues presented in Nevada Hydro” — established that energy storage facilities classified as transmission assets must provide “a demonstrated contingency on the transmission system,” he said.

The Western Grid project’s only purpose was to provide voltage support and thermal overload protection, CAISO said in a 2018 report.

“Every one of these contingencies is going to be different…and from a storage perspective, the solution is going to look different too,” Twitchell said.

In the years since, grid planners have only sporadically identified least-cost energy storage alternatives to conventional transmission investments, and most deployments have been small, Twitchell said. But a few notable projects have or soon will come online, including the Oakland installation and a smaller 2.5-MW/5-MWh project under construction in rural Wisconsin that the Midcontinent Independent System Operator selected as a cheaper alternative to rebuilding double 115-kV transmission lines, he said.

Energy storage systems with higher c-rates, or discharge speeds, may be more versatile as transmission assets, said panelist Jay Bellows, president of battery cell developer KORE Power.

A “short-duration” battery installation can throttle its discharge to remain useful in longer-duration applications, such as frequency regulation, or ramp up to full discharge to mitigate the impacts of a transmission line outage, he said.

Additionally, energy storage systems can benefit the transmission grid even when they’re not classified as transmission assets, such as by alleviating pressure on the grid through siting near load centers or by absorbing excess renewables generation that would otherwise be curtailed, Bellows said.

For example, distributed battery installations built by KORE Power near Denver benefit the local distribution grid by absorbing excess rooftop solar generation, but also provide “resiliency, redundancy and ultimately disaster recovery” for the transmission grid, he said.

“Literally everywhere we put systems, there’s a benefit to the location…that could have a huge benefit to transmission as well,” Bellows said.

FERC issued a policy statement in 2017 allowing energy storage systems classified as transmission assets to provide ancillary market services that return some revenue to customers as well, Twitchell said. Such “dual-use” assets can in theory take advantage of generally shorter transmission grid interconnection queues while increasing revenue opportunities, but the reality is more complicated, Bellows said.

Though CAISO and MISO began proceedings to develop dual-use tariffs, neither they nor any other grid operator has resolved the inherent tension between “a regulated function and a competitive market function,” Twitchell said. Reliability is the primary purpose of energy storage systems classified as transmission assets, so they must be available and at an appropriate state of charge during designated reliability windows, he said.

This is a challenge not only for grid operators but for storage system owners whose priorities may conflict with the “reliability-first” imperative, Bellows said. For example, a hospital’s behind-the-meter battery is most likely to be called upon for grid support during a peak load event, when it’s also most likely to be needed to provide critical backup power for its owner, he said.

“What it ultimately comes down to…[is] how can you guarantee that the system has energy,” he said.

In any event, since no grid operator has finalized rules around dual-use systems, the point is moot for now, Twitchell said.

“Even though you philosophically are allowed to do this, technically you can’t yet,” he said.

SDGs, Targets, and Indicators

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 7: Affordable and Clean Energy
• SDG 9: Industry, Innovation, and Infrastructure
• SDG 11: Sustainable Cities and Communities
• SDG 13: Climate Action

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 7.2: Increase the share of renewable energy in the global energy mix
• SDG 9.1: Develop quality, reliable, sustainable, and resilient infrastructure
• SDG 11.2: Provide access to safe, affordable, accessible, and sustainable transport systems
• SDG 13.2: Integrate climate change measures into national policies, strategies, and planning

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Yes, the article mentions indicators that can be used to measure progress towards the identified targets. These indicators include:

• Deployment of bulk energy storage projects
• Replacement of fossil fuel-fired power plants with battery storage
• Regulatory and market design questions around dual-use storage assets
• Identification of least-cost energy storage alternatives to conventional transmission investments
• Throttling discharge of short-duration battery installations for longer-duration applications
• Alleviating pressure on the grid through siting energy storage systems near load centers
• Absorbing excess renewables generation that would otherwise be curtailed
• Development of dual-use tariffs for energy storage systems

SDGs, Targets, and Indicators

Source: utilitydive.com