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Energy Storage: Frequently Asked Questions

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Energy Storage: Frequently Asked Questions

September 4, 2019

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 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 recognized the value of added energy storage on the electric grid by releasing the DER Roadmap in early 2017. 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. This directs ISOs and RTOs to develop a model to integrate ESR participation in wholesale markets, including energy, capacity, and ancillary market services. The NYISO submitted its proposal to comply with the directives of Order No. 841 to FERC in December 2018.

What are the benefits of energy storage?

Since grid operators must balance generation and consumption, the ability to store energy has the potential to add flexibility for grid operators to use generation and transmission resources more efficiently. 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 balance 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.

How is New York State promoting the growth of ESRs?

The Climate Leadership and Community Protection Act directs the state Public Service Commission (PSC) to establish programs to promote installation of 3,000 MW of energy storage by 2030. New York State has committed $200 million in incentives to meet an energy storage target of 1,500 MW by 2025.

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. More recently we have worked with stakeholders through our shared governance process to create additional rules in our energy and capacity markets that help integrate renewables. This proposal was filed in June 2019 with FERC (see next question for more information).

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) would be able to participate under the NYISO’s proposed ESR participation model or its proposed Distributed Energy Resource (DER) participation model. The proposed DER participation model leverages 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.  Following extensive discussions and an affirmative vote by the Management Committee, we submitted a proposed DER & Aggregation Market Design to FERC that will expand the rules governing small resource (including ESR) participation in our wholesale markets. If accepted by FERC, the new market design would expand opportunities for these resources to participate in our capacity, energy, and ancillary service markets.

NYISO
About NYISO Author
We are an independent, not-for-profit corporation responsible for operating the state’s bulk electricity grid, administering New York’s competitive wholesale electricity markets, conducting comprehensive long-term planning for the state’s electric power system, and advancing the technological infrastructure of the electric system serving the Empire State.

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