November 4, 2016
ESA Comment on NYISO DER Roadmap
The most concerning changes that NYISO is proposing in the DER Roadmap involves the calculation of Capacity value for DER. The Roadmap would likely reduce the earnings potential of limited-duration resources, both behind the meter and in front of the meter. If the entire Capacity market is redesigned to value all resources based on their duration—rather than maintaining the current status quo of allotting full Capacity value to resources with at least four hours of duration—shorter duration resources, including many types of energy storage, will have less incentive to provide their services to the bulk power system. It’s not just duration, but time of deliveries that matters; a short-duration resource can have equal value to a longer-duration resource even if it supplies Energy or other products only during peak hours, and such a resource could conceivably provide more value than traditional generation can if it is available to be dispatched and ramped to full power nearly instantaneously. Any changes in the Capacity value of limited duration resources needs to account for the full value of these resources relative to what the system needs, and not categorize them simply by duration. Furthermore, work to develop new Capacity values for DER should not negatively affect the Capacity value of front-of-meter resources—specifically Energy Limited Resources. To allow changes in the DER Roadmap to affect front-of-meter resources, or to even leave the possibility open and thus expose the market to uncertainty, would have a chilling effect on the development front-of-meter storage.