FERC Chairman Wellinghoff testifies before Senate Committee on Energy and Natural Resources

Thursday, December 10, 2009

This morning, Chairman Wellinghoff testified before the Senate Committee on Energy and Natural Resources on the role of grid-scale energy storage as it relates to U.S. energy and climate goals. You can find his testimony here (11 page PDF).

Highlights of Chairman Wellinghoff's testimony include:

  • As more states (and the federal government) adopt renewable energy standards (RES), we need to integrate new energy resources into the transmission grid. Many of these new resources have a lower capacity factor than traditional generation -- meaning they do not produce energy as constantly as other sources. (For example, the wind doesn't always blow, but coal supplies and feed rates can be constant.)
  • One approach involves matching load and generation variations through demand response and other distributed resources such as energy storage. Storage can be charged or filled off-peak by renewable energy and later provide a source of power during peak demand periods or periods when the sun or wind is not available, either through direct injection of energy into the grid or by enabling demand response.
  • Storage can also provide ancillary services to the grid, which adds the most value to the integration of variable resources such as wind and solar. For example, storage can provide regulation service, which means finely following load and matching generation exactly to tiny shifts in demand. This is traditionally done through combustion-turbine gas-fired generators, but storage will be a faster and cheaper solution with a lower carbon footprint.
  • Pumped storage is the most-used bulk electricity storage. Lower-cost energy is used to pump water uphill during off-peak times. When the water flows back downhill during peak demand, it flows through turbines which can generate electricity whose value is higher because it is available to satisfy peak demand. Currently 24 pumped storage projects in the USA have an installed capacity of over 19,500 MW -- just about 2% of total USA installed capacity. FERC has issued preliminary permits for another 27,000 MW of pumped storage capacity.
  • New technologies represent improvements, such as closed-loop pumped storage. These systems use two reservoirs that are disconnected from natural aquatic ecosystems, avoiding some environmental concerns. Flywheels may also be able to provide regulation service, as might grid-scale batteries or even the distributed fleet of batteries onboard electric vehicles.
  • Various RTOs are developing energy storage paradigms. FERC recently accepted a NYISO proposal to integrate energy storage devices into its day-ahead and real-time regulation service markets. (127 FERC ¶ 61,135). MISO, ISO-NE, and PJM are also exploring the issue.
  • FERC will continue to monitor the development of storage technologies to ensure that they receive tariff treatment comparable to other resources and receive compensation commensurate with the value of the services they provide to wholesale markets and the grid. Storage technologies which provide a more accurate and nearly instantaneous response to regulation signals can reduce the size, and hence overall expense, of the regulation market. It may make sense to compensate such resources for their superior speed or accuracy in the future.
How can we identify good options for energy storage?

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