PJM to Implement Order 841 Model Dec. 3

The new rules, among the first to be FERC-approved, will enhance market participation by energy storage resources.

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PJM will implement an improved market participation model for energy storage resources on Dec. 3, meeting a compliance deadline set by the Federal Energy Regulatory Commission for Order 841.

The Commission accepted PJM’s proposal Oct. 17, subject to a further compliance filing to be made within 60 days. It also approved Southwest Power Pool’s (SPP) filing, subject to an additional compliance filing.

Order 841, issued in early 2018, aims to remove barriers to the participation of energy storage resources in the capacity, energy and ancillary services markets of all independent system operators and regional transmission organizations under FERC’s jurisdiction. Doing so, FERC reasoned, will enhance competition and help ensure those markets produce just and reasonable rates.

‘Even Playing Field’

In a news release accompanying the acceptance of the PJM and SPP filings, FERC called Order 841 “landmark storage rulemaking.”

“Electricity storage must be able to participate on an even playing field in the wholesale power markets that we regulate,” FERC Chairman Neil Chatterjee said. “Breaking down these market barriers encourages the innovation and technological advancements that are essential to the future of our grid.”

In related but separate action, FERC established a Section 206 proceeding and directed PJM to submit Tariff provisions by Dec. 12 reflecting its current rules and practices regarding “minimum run-time requirements” (i.e., sustained output capability requirements) for all resources in the capacity market.

In the same docket, FERC initiated a separate paper hearing to investigate whether PJM’s minimum run-time rules and procedures are just and reasonable as applied to capacity storage resources, outside of its compliance with Order No. 841. PJM employs a 10-hour duration requirement for all resources, which reflects the period of customer demand during a peak summer day. PJM will be submitting its initial brief by Dec. 12.

PJM’s History with Storage

PJM already was in compliance with several of Order 841’s directives. Energy storage resources already had full access to its markets. In fact, batteries on average represent more than 80 percent of fast-responding frequency regulation resources. (See Energy Storage in PJM: A Perspective.)

PJM has long recognized the unique value of storage, which adds important flexibility to the supply mix as the amount of renewables on the bulk power grid expands.

Currently, PJM has more than 5,300 MW of energy storage resources on the system, excluding demand response. Of this, 96 percent is from five pumped-storage hydroelectric plants.

The AES Laurel Mountain facility near Elkins, West Virginia, combines wind generation with battery storage. (Courtesy: AES)

Plan Empowers ESRs

Andrew Levitt, a senior business solution architect in PJM’s Applied Innovation Department, updated members on FERC’s directives in a presentation at the Oct. 30 MC Information Webinar.               

FERC found that PJM’s compliance filing generally enables electric storage resources to provide all services they are capable of providing in PJM’s wholesale electric markets. The plan also allows those resources to be compensated for the wholesale services they provide in the same manner as other resources that offer these services. And, PJM’s compliance filing contains market rules that appropriately recognize the unique physical and operational characteristics of electric storage resources and facilitate their participation in PJM’s wholesale markets, FERC found.