September 20, 2019

The Time is Now to Begin Removing Barriers to Hybrid Energy StoragePLUS Generation

Why StoragePLUS Generation Makes Sense Like PB&J

As energy storage continues its rapid advances in performance and cost, more and more renewable power and thermal generation projects are being planned with fully integrated energy storage. Particularly for wind and solar power, “hybridization” with energy storage turns an otherwise non-dispatchable resource into a far more controllable and ultimately valuable supplier of electricity, capable of reacting to the demands of the electric system. Indeed, storage and renewables are often said to go together like peanut butter and jelly for that reason!

While over 56,000 MW of hybrid storage-plus-generation resources are waiting in line for an interconnection to the electric grid, the surge of market interest in hybrids is moving faster than the evolution of electricity market rules. Much of the challenge of such hybrid resources is that present market rules will represent them as deviations from existing resource types—that is, either as a variable generator that is also dispatchable, or as a storage resource that has onsite fuel. Each formulation brings its own challenges, either by inheriting the constraints from each resource type, or removing salient accommodations for each. In other words, what the electric system sees is not a PB&J sandwich, but rather one piece of jam-spread bread and one piece of peanut butter-spread bread pushed together.

Produced in collaboration with Grid Strategies, our latest report, Enabling Versatility: Allowing Hybrid Resources to Deliver Their Full Value to Customers, assesses barriers to, and proposes solutions for, enabling storage-plus-generation hybrid resource deployment on the electric grid. In addition to providing a set of near-term market reforms to better facilitate hybrid resource interconnection and market participation, the paper also sketches a vision for hybrids to be treated as a fully-integrated single resource in electricity markets, which would be optimal for market operators and participants alike and unlock the full value of hybrids for electric service. Let’s see that PB&J as a sandwich!

We strongly recommend that regional grid operators and the Federal Energy Regulatory Commission (FERC) begin the process of reform now. Broad groups of market participants are requesting a clearer regulatory framework for hybrids. The rationale underlying FERC’s Order 841, which was focused on removing wholesale market barriers for storage resources, justifies an effort to remove similar barriers for hybrid resources.

We hope that this paper provides a useful starting point for the discussion of needed reforms. And now I’m going to go make myself a PB&J sandwich.

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