Researchers at Pacific Northwest National Lab (PNNL) have developed a new framework for offsetting energy storage as a dual-use asset.
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PNNL researchers primarily study the function of energy storage as a transmission asset and its potential compensation as a market participant in energy markets.
As an example of storage being used as transmission, Jeremy Twitchell, PNNL’s principal energy analyst, explained in a webinar that Midwestern grid operator MISO has located a $13 million transmission project in Wisconsin as a transmission asset. selected a $12 million storage project in MISO’s storage as a transmission project will recover its costs through transmission system tariffs approved by the Federal Energy Regulatory Commission (FERC), and will not participate in energy markets.
The dual-use opportunity of such a project arises because “heavy use, even on fully contracted transmission lines, is unused capacity most of the time,” Twitchell said. “We build the network based on peak needs and reserve margin, but we are only at that peak for a few hours a year.”
That means the storage, when it’s not being used for streaming, “can do other things,” he said. FERC “recognized this in 2017,” Twitchell said, and issued a policy statement stating that storage deployed as a streaming asset can also provide marketplace services.
“FERC was doing this to reduce the cost of the system,” he said, adding that FERC has warned that a storage asset cannot recover all of its costs as a transmission asset, and that as a generation asset It can also recover all its costs in the form of “and keep everything”, since in that case there is no reduction in costs.
The California Independent System Operator (CAISO) and MISO began studying how to respond to FERC’s non-binding political statement, Twitchell said, and CAISO studied how to share market revenue with customers, but the two closed its proceedings. Compensation for dual-use storage.
Without clear compensation mechanisms that allow developers to recoup the costs of energy storage investments, the investment “will not be successful,” said Charlie Vartanian, a senior technician at PNNL who moderated the webinar.
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