Storage Grows Up

Deck: 

More than just energy, it's becoming part of the grid.

More than just energy, it's becoming part of the grid.

Fortnightly Magazine - September 2015

REV, also known by its formal name, "Reforming the Energy Vision," marks a bold initiative from New York to help increase the efficiency, reliability, and resiliency of the electric grid across the state. REV essentially re-envisions the state's future grid as a system fueled by wind, solar, and other distributed generation sources, and then enhanced by smart technologies and tools including microgrids, efficiency programs, and demand response. One of the most striking aspects of REV is the unique role it assigns to energy storage.

REV will follow two tracks of implementation and each will examine energy storage. The first track aims to establish a policy approach to encourage technologies, while the second track focuses on the regulatory changes needed to implement it. Significantly, Track 1 defines the role of distribution utilities in the deployment of distributed energy resources (DERs), proposing that distribution utilities should act as distributed system platforms (DSPs) to incorporate assets into grid operations. Ideas coming out of Track 1 already appear to redefine the role of storage in New York, but the significance of these changes will likely resonate well beyond the state.

Part of the Fabric

Figure 1 - Placement on the Grid

In its Track 1 decision (Order Adopting Regulatory Policy Framework and Implementation Plan, Case 14-M-0101, Feb. 26, 2015), the New York Public Service Commission (PSC) generally forbade utility ownership of distributed generation. But in the case of energy storage it carved out an exception - an exception that all but swallows the rule. Importantly, the PSC found that utilities may own distributed storage without concern over the competitive implications when it becomes a part of the very fabric of the distribution network:

"Storage technologies integrated into grid architecture can be used for reliability and to enable the optimal deployment of other distributed resources, and we agree with Staff that this application of storage technology should be permitted without the need for a market power analysis ." (REV Order, pp. 68-69.)

The rationale for this exception is rooted in the conviction that energy storage upholds grid reliability and resiliency. Thus, this conviction represents a significant shift in regulatory policy. New York clearly has recognized both the value of energy storage and the broadening of its role in the grid of the future.

Historically, storage has often provided backup power for commercial and industrial applications. Increasingly today, storage integrates renewables - particularly in systems that are enclosed, or "islanded" That's where the lack of flexibility of the grid creates hurdles to integrating large percentages of renewables. And with its fast response capabilities, storage is made to order for frequency regulation - a better alternative to relying on the open market to purchase wholesale energy. In fact, policymakers just now are beginning to adopt storage as a tool to augment reliability and resiliency at the grid