NERC & CAISO Confirm Energy Storage Central to California's Energy Future

An integral component of California's future electric grid

Washington, D.C. – The North American Electric Reliability Corporation (NERC) and the California Independent System Operator Corporation (CAISO) recently issued a joint report that confirmed energy storage as an integral component of California's future electric grid. Among other recommendations, the joint report underscored that CAISO will partner with storage and continue to enhance market mechanisms to promote energy storage participation as a reliability and flexibility tool.

The report highlights how CAISO is pursuing market enhancements such as pay-for-performance regulation modeled after FERC Order 755, which has proven highly beneficial to integrating storage in other markets like PJM. NERC and CAISO also discuss storage as a solution that can address system reliability and flexibility needs such as managing over-generation, providing frequency response and delaying transmission upgrades.

"The Electricity Storage Association is pleased that NERC and CAISO also view energy storage as an integral part of California's energy future. In light of CPUC's announced energy storage target for 2020, we believe storage will be essential to making a resilient, efficient, clean and cost-effective grid. We look forward to working with all stakeholders to achieve these goals, foster innovation and create sustainable jobs," said Darrell Hayslip, Chair of the Electricity Storage Association.

Below are excerpts from the report, "2013 Special Reliability Assessment: Maintaining Bulk Power System Reliability While Integrating Variable Energy Resources – CAISO Approach"

* "CAISO also plans on partnering with storage and incenting load shifting during hours of low net load demand," page 10.

* The report recommends, "conducting technical studies to determine the optimal flexibility needs of the fleet, including storage," Table 2, page 12.

* The report also recommends, "investigating market mechanisms to ensure adequate frequency response from energy storage," Table 3, page 17.

* "Distributed storage could be a valuable resource for reliability purposes if considered properly in planning and operating the BPS (bulk power system)," page 23.

* "Market enhancements are intended to provide an orderly transition that offers an opportunity for a variety of solutions, including…storage…," page 39.

* "CAISO is actively pursuing several market enhancements to integrate renewable resources. Examples include…pay-for-performance regulation…," page 39.

* "The regulation energy management functionality allows nongenerator resources such as energy storage devices and demand response resources to bid their capacity more effectively into the CAISO regulation market. This product adds depth to the regulation market by enabling nontraditional resources to provide more and potentially faster regulating resources," page 40.

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