FERC OKs CAISO Energy Storage Rules
FERC last week approved rule changes to improve the ability of energy storage resources to participate in CAISO’s markets (ER16-1735).
The changes will allow “non-generator resources” to submit their state-of-charge as a bid parameter in the day-ahead market and manage their own state-of-charge and energy limits for the purposes of bidding into the market.
Non-generator resources are those that can be dispatched to generate, consume or curtail consumption of energy to any operational level within their specified capacity range.
The non-generator resource model is the primary means by which energy storage devices currently participate in CAISO’s market, enabling batteries to continuously operate across a range that includes both charging and discharging. For bidding purposes, the ISO assumes that the available energy from a storage resource is a function of the resource’s state-of-charge — information the ISO obtains through telemetry.
While that approach is sufficient for real-time operations, CAISO contends that it does not provide a storage resource’s scheduling coordinator a “usable” bid parameter for the day-ahead market.
Under current day-ahead bidding practices, CAISO assumes that a resource’s initial state-of-charge is the ending value from the previous day’s day-ahead award. If there was no such award, the ISO assumes the charge to be 50% of the resource’s megawatt-hour limit.
The Tariff change will allow a scheduling coordinator to replace the ISO’s assumed state-of-charge values with its own bids “to better reflect actual conditions” for a storage resource, CAISO said in its proposal.
“CAISO contends that non-generator resources choosing to self-manage their energy limits and state-of-charge will be able to maintain their states-of-charge at an optimal level through their bidding strategies, enabling resources to better account for dynamic needs in real time and avoid uninstructed imbalance energy settlements,” the commission’s order explained.
The commission’s ruling will also enable CAISO to implement a mechanism to allow energy storage devices to more effectively participate in the ISO’s demand response programs. Those programs measure demand reductions by comparing actual consumption relative to a baseline of expected consumption.
