PJM this week filed a proposal to facilitate the participation of energy storage resources in the capacity, energy and ancillary services markets in compliance with Order No. 841 of the Federal Energy Regulatory Commission (FERC).
The order, issued in February, requires all regional transmission organizations (RTOs) and independent system operators (ISOs) to remove barriers currently faced by such resources, allowing the resources to compete in all markets to the extent that they are technically capable of participating.
Energy storage resources (ESRs) take electric energy from the grid that can later be injected back into the system. Some examples are pumped hydroelectric storage, batteries and flywheels.
These resources may be connected at transmission, at distribution or behind a customer’s load meter. Currently, there are more than 5,300 MW of electric storage resources in PJM’s system, 96 percent of which are pumped hydro.
PJM’s proposed participation model gives these resources greater flexibility in managing their operations in the system when charging, discharging or providing continuous electrical service across their full dispatchable range. The model also ensures that such resources are capable of, and responsible for, performing in the markets in which they elect to participate.
PJM’s ESR participation model adheres to the four requirements of the FERC order:
- Ensure that ESRs are eligible to provide all capacity, energy and ancillary services they are technically capable of providing.
- Allow ESRs to be dispatched and set the wholesale market clearing price as sellers and buyers.
- Account for the physical and operational characteristics of ESRs.
- Establish a minimum size requirement for market participation of ESRs not greater than 100 kW.
PJM’s filing consists of two parts. The first is an accounting proposal that PJM is asking FERC to accept by Feb. 3.
Earlier approval of the accounting proposal would allow PJM to test its proposed metering and accounting practices, gaining real-world experience in identifying and addressing challenges, before implementing the new ESR participation model.
PJM has asked FERC to rule on the remainder of its participation model by May 30 so that it may be ready for the effective date mandated by the order of Dec. 3, 2019.
In developing its plan, PJM evaluated and proposed modifications, where necessary, to the capacity, energy and ancillary services markets, and associated support areas.
Regarding the capacity market, ESRs already participate in the form of pumped storage hydroelectric resources (currently about 5,000 MW). ESRs are not subject to the reliability pricing model must-offer requirement; however, ESRs may voluntarily elect to participate as a stand-alone Capacity Performance Resource or may participate by combining capabilities with other eligible resources to form an aggregate Capacity Performance Resource.
As a stand-alone resource, an ESR may participate at a megawatt level up to the resource’s capacity value, determined as the resource’s discharge/output capability that can be maintained over a continuous 10-hour period consistent with the expectations of all other dispatchable capacity resources.
PJM relies on the ability of all dispatchable capacity resources to maintain output at their stated capability levels for a minimum continuous duration of at least 10 hours in order to manage the system’s ability to meet the entire period of elevated demand throughout the afternoon and evening hours of a typical peak summer weekday. Energy Storage Resources can meet this requirement in a number of ways, including through aggregation of resources, modifying the operation of the resource, or through bids into the capacity market at adjusted levels to reflect any output limitations.
In the Energy Market, resources will manage their own state of charge through market offers and updates to their dispatchable ranges in real time. Moreover, ESRs can switch between continuous mode, charge mode and discharge mode. In continuous mode, a participant’s market offer would be based on both positive and negative megawatt amounts to account for an electric storage resource’s ability to both charge and discharge. In charge mode, participants only offer negative megawatt amounts; in discharge mode, only positive megawatt amounts.
ESRs already participate in the Regulation Market, part of PJM’s ancillary services markets. Under PJM’s proposal, a similar approach would also be extended to synchronized reserves. The filing also explains participation in other PJM ancillary services markets such as Reactive Service and Black Start.