Roundup: Looking at Electric Storage, Energy Price Formation, System Operations


Market Implementation Committee Special Session: Electric Storage Participation (FERC Order 841)

PJM on Aug. 3 presented a straw proposal at a special session of the Market Implementation Committee to remove barriers to electric storage resource participation in the markets in response to FERC Order 841.

The straw proposal defines electric storage as a resource capable of receiving electric energy from the grid and storing it for later injection back into the grid. Demand response is not included.

These resources may be connected at transmission, at distribution or behind a customer’s meter. Currently, there are more than 5,300 megawatts of electric storage resources (ESRs) in PJM’s system, 96 percent of it pumped hydro. None of the current ESR connected behind a customer’s meter inject into the grid.

Among the plan’s highlights:

Participation model

  • ESRs would be modeled as one continuous resource.
  • PJM would not make commitment decisions, nor manage the state of charge.
  • There would be three modes of operation: continuous, charge and discharge.
  • Parameters would be offered in through Markets Gateway.

Synchronized reserves

  • ESRs would opt in for synchronized reserves.
  • Similar to resources in the regulation market, ESRs would be able to offer synchronized reserves without an energy offer.
  • Amounts would need to be updated in real time.

Capacity market

  • A minimum 10-hour duration would need to be maintained.

Among the issues still under discussion: What will the Day-Ahead Market must-offer requirement look like for capacity ESR? And, how will make-whole adjustments be made?

Scott Benner, senior lead engineer – Advanced Analytics, said that ESR participants would be expected to input maximum and minimum limits that reflect their realistic capability to inject electric energy over various time periods.

PJM’s filing is due to FERC Dec. 3, 2018, with implementation to follow by Dec. 3, 2019.

The last special session on the issue is scheduled for Sept. 14, and a draft proposal is expected to go before the Operating Committee on Oct. 9.

Significant discussion at the Aug. 3 meeting focused on interpretations of PJM’s status quo regarding the capability of generation capacity resources.

According to PJM, Manual 21 mandates a 10-hour default duration requirement for capacity.

In its presentation, the Energy Storage Association stated that electric storage resources are eligible to offer capacity based on the output they can maintain for four hours. Their viewpoint is that the Tariff states that storage, renewables and energy efficiency may offer capacity based on expected average output during peak hours, and that there are no more than four peak hours in any day.

The association also reviewed a variety of electric storage technology types at or near commercial viability.

Andrew Levitt, senior business solutions architect – Applied Innovation, shared an update on the Distributed Energy Resource Subcommittee. (See Roundup: Distributed Energy Resources, Primary Frequency Response, Summer-Only Demand Response.)

Energy Price Formation Senior Task Force

PJM presented a high-level summary of its proposal to address the short-term goals of the Energy Price Formation Senior Task Force at its Aug. 6 meeting.

Previously, the group had hoped to be able to vote on a package following its Aug. 22 or Sept. 10 meetings in order to advance it to the Markets and Reliability Committee for a first read at its Sept. 27 meeting. That timeframe now seems too optimistic, said facilitator Dave Anders, director – Stakeholder Affairs.

The group, convened in January, is tasked with identifying ways to enhance energy market pricing so that prices accurately reflect the true cost of serving electricity demand and minimize the need for out-of-market uplift payments.

The PJM proposal is an iteration of a paper that PJM published in late June and has reviewed with the task force.

The three main areas slated for change are synchronized reserves, reserve sub-zone modeling and the operating reserve demand curve for shortage pricing.

Of particular discussion at the Aug. 6 meeting was the operating reserve demand curve (ORDC).

Some members took issue with a change to PJM’s approach since the July 17 presentation regarding out-of-market adjustments made by dispatchers in which they commit units based on reliability needs. Under the current thinking, if those actions are not intended to create additional reserves on the system – for example, if they are to resolve reactive or voltage needs – they would not be added to the minimum reserve requirement portion of the curve.

Catherine Tyler of Monitoring Analytics, the independent market monitor for PJM, discussed an alternative proposal to the PJM ORDC proposal under development by the IMM.

The PJM proposal, she said, would lead to carrying more online capacity than PJM has historically.

The IMM does see a value in extending the ORDC but recommends a less dramatic change that Tyler said could produce the desired results at a lower cost.

System Operations Subcommittee

At their Aug. 2 meeting, members received updates on a July 10 low frequency event and the July 18 Lonesome Pine load shed event (See Operating Committee rolls out new stakeholder communication tool, reviews July events).

Chris Pilong, director – Dispatch, also presented the PJM July operations summary, noting that the month saw five spinning events, more than usual. The incidents were short and unrelated, but PJM is analyzing them to see if there is any insight to be gained going forward. There were seven hot weather alerts.

The updated PJM Transmission Owner Operator certification exam launched Aug. 1. There will be a blackout period in October in order to determine a cut score, and which 90 items will be scored for the exam. In the meantime, test-takers will have to wait for their grade, but their certification will be retroactive to the day they sat for the test.

All transmission companies are compliant with training and certification requirements. One company each from generation, small generation and curtailment service providers is noncompliant for training. One generation company is noncompliant for certification.

Members also heard a first read on changes to Manual 1 Revision 39, as well as a reliability compliance update.