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Energy Storage: Frequently Asked Questions


Energy Storage: Frequently Asked Questions

October 24, 2018

The use of Energy Storage Resources (ESRs) on the grid is growing in New York State. It has the potential to enhance energy production from clean energy resources while supporting improved grid efficiency and resilience. Here are some common questions about this burgeoning technology.

What do we mean by Energy Storage Resources (ESRs)?

ESRs are capable of receiving energy from the electric grid, and storing it for later injection back onto the grid. ESR technology includes grid-scale battery systems, pumped hydropower, fuel cells and flywheels (a device that stores rotational energy in a spinning wheel, generating power by resisting changes in speed).

Why is the NYISO working to integrate energy storage?

Advancements in storage technologies and capabilities are creating new opportunities for storage to contribute to system efficiency and reliability. The NYISO has been actively working with stakeholders and policymakers to develop new market design concepts to take better advantage of ESR capabilities. The Federal Energy Regulatory Commission (FERC) also saw integration of ESRs as a top national priority when it issued Order No. 841Electric Storage Participation in Markets Operated by Regional Transmission Organizations and Independent System Operators, which directs ISOs and RTOs to develop a participation model to integrate ESR participation in wholesale markets, including energy, capacity, and ancillary market services.

What are the benefits of energy storage?

Since grid operators must balance generation and consumption, the ability to store energy creates added flexibility for grid operators to use generation and transmission resources more efficiently by charging storage devices at times of low demand for later injection during times of high demand. Advances in technology and support from public policy have made energy storage more common and less expensive, creating greater potential for storage to support grid reliability and efficiency. Fully capturing these potential benefits requires developing comprehensive rules and capabilities to integrate storage resources into the NYISO’s markets.

How do ESRs help with integrating renewable resources onto the grid?

With the growth of intermittent energy resources such as solar and wind power in New York, ESRs are important tools to balance the varying output of these renewable resources. In this way, we can “firm” the intermittent nature of renewable generation by storing energy produced during periods of low demand, and responding during times of higher demand. This will increase the efficiency and overall value of clean energy resources and ESRs in the wholesale energy market.

What are some of the other benefits of ESRs?

Energy storage can reduce transmission congestion which arises when lower-cost energy in one region can’t be delivered to a different region due to the physical limitations of the transmission system. It can also improve the ability to shift power demand to respond to price signals and provide ancillary services such as voltage support services. With modifications and enhancements to the NYISO’s market design, ESRs will have the potential to participate in all of NYISO’s markets.

What is the NYISO’s history in integrating energy storage?

The NYISO was the first grid operator to develop market rules allowing energy storage to participate in wholesale markets as a regulation service provider. Through our 2017 State of Storage Report, the NYISO outlined an effort to expand the role of storage through a full-market participation model. That model allows grid operators and energy storage operators to take better advantage of the capabilities energy storage can provide to energy, capacity and ancillary services markets.

How is New York State promoting the growth of ESRs?

New York State committed $200 million in incentives to meet an energy storage target of 1,500 MW by 2025. The state Legislature has instructed the state Public Service Commission (PSC) to create energy storage procurement targets which are to be met by 2030. Through our shared governance process, the NYISO will continue to work closely with stakeholders and policymakers to expand opportunities for energy storage resources in wholesale markets.

Will the NYISO’s market rules allow behind-the-meter storage to participate?

Depending on the particular facility’s configuration, “behind-the-meter” energy storage assets (those designed to support a single building or facility) will be able to participate under the NYISO’s ESR participation model or its DER participation model. The DER participation model, detailed in the DER Roadmapleverages many of the concepts found in the market participation model being developed for ESRs. Through this model, aggregated DERs that include storage resources will be capable of participating in the NYISO’s energy, capacity, and ancillary services markets on an economic basis.

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About NYISO Author
We are an independent, not-for-profit corporation responsible for operating NY’s electricity grid. We administer wholesale electricity markets, conduct planning for the state’s long-term needs, and advance our technological infrastructure.

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