U.S. energy regulators have issued a final rule designed to help electric storage resources participate in the capacity, energy and ancillary services markets operated by regional grid operators. The Federal Energy Regulatory Commission said its Order No. 841 would remove barriers to the participation of electric storage resources in wholesale markets operated by regional transmission organization and independent system operators.
Electricity storage technologies have been around for some time, and some technologies like pumped hydropower storage have been deployed on a significant scale -- but new electric technologies are developing on top of these traditional technologies. New England's regional grid operator recently cited fast-responding energy storage devices as among the new technologies entering its markets. Many states have recognized the opportunities created by storage, and are enacting incentives to support its development and integration into microgrids. At the same time, regulators are grappling with how to fit energy storage resources into existing markets and incentive programs, like retail net metering.
The Federal Energy Regulatory Commission has considered electric storage for some time, including stakeholder workshops, data requests, and technical conferences. The Commission expressed concerns that barriers to electric storage resources participation in organized wholesale markets could lead to unjust and unreasonable wholesale electricity rates. In November 2016, the Commission proposed a rule to facilitate electric storage resources' participation in organized wholesale markets. In January 2017, the Commission issued a policy statement addressing how electric storage resources may provide services at a mix of cost-based and market-based rates.
In issuing Order No. 841 on February 15, 2018, the Commission adopted a final rule requiring each RTO and ISO to revise its tariff to establish a "participation model" for electric storage resources. As envisioned by the Commission, these participation models will consist of market rules that facilitate electric storage resources' participation in organized wholesale markets, while recognizing storage resources' physical and
operational characteristics.
The new rule provides that each RTO and ISO must adopt its own participation model for electric storage resources, within certain guidelines. First, the participation model must ensure that storage resources using it are eligible to
provide all capacity, energy, and ancillary services they are technically capable of providing. Second, the participation model must ensure that participating storage resources can be dispatched and
can set the wholesale market clearing price as both a wholesale seller
and wholesale buyer, consistent with rules that govern the conditions
under which a resource can set the wholesale price. Third, the participation model must account for the
physical and operational characteristics of electric storage resources
through bidding parameters or other means Fourth, it must a minimum
size requirement for participation in the RTO and ISO markets that does
not exceed 100 kW.
The rule also requires that the sale of
electric energy from the RTO or ISO market to an electric storage
resource that the resource then resells back to those markets must be at
the wholesale locational marginal price.
In an accompanying statement, Commissioner LaFleur described electric storage as "like a 'Swiss army knife' that can serve customers in multiple ways," including including providing energy, particularly
in conjunction with variable renewable generation (example: Deepwater Wind has proposed offshore wind plus storage in response to the pending Massachusetts offshore wind solicitation) as well as providing frequency regulation and other ancillary services, and helping defer
distribution and transmission needs. Commissioner Powelson noted its consistency with the Commission's "longstanding commitment to fostering innovation and competition by
reducing and eliminating barriers to entry." Commissioner Glick said Order No. 841 "will facilitate the development of a class of technologies—ranging from batteries to pumped hydro—that has the
potential to play a leading role in the transition to the electricity
system of the future, but that has heretofore been hindered by market
rules that were designed primarily to accommodate more conventional
means of electric generation."
Once it takes effect, the final rule gives RTOs and ISOs 270 days to develop and file their proposed rule changes, and a year for their implementation.
Energy powers society; society's choices shape energy policy. A blog about our energy resources and the choices they present for society.
Showing posts with label integration. Show all posts
Showing posts with label integration. Show all posts
Energy Department offers $4 billion loan guarantee program for renewable energy and efficiency projects
Tuesday, July 8, 2014
The U.S. Department of Energy has announced a $4 billion loan guarantee program for renewable energy and energy efficiency projects.
The Renewable Energy and Efficient Energy Projects Loan Guarantee program is intended to support the first commercial-scale deployments of the next wave of innovative clean energy technologies. Through the program, the Energy Department solicits applications for loan guarantees. When a successful applicant borrows money for project finance from a commercial bank, the federal government promises to assume the borrower's debt obligation if that borrower defaults. This guarantee serves as a credit backstop for the borrower, ultimately reducing its cost of financing because the lender knows it has resort to federal funds if the borrower cannot repay the loan.
The current program follows a series of previous Energy Department loan guarantee programs. These programs have helped finance projects including the NRG Solar, LLC's 290-megawatt Agua Caliente solar photovoltaic array (the world's largest), NRG Energy, Inc.'s 392-megwatt Brightsource concentrating solar power (CSP) plant (also the world's largest), the 845-megawatt Caithness Shepherds Flat wind project, and Abengoa Bioenergy Biomass of Kansas LLC's cellulosic ethanol plant. While not all of the previous programs' awardees have been successful -- for example, failed solar panel maker Solyndra -- the Department touts the programs as aligned with President Obama's Climate Action Plan, by supporting investment in domestic energy resources and reductions in greenhouse gas emissions.
To be eligible for the present solicitation (48-page PDF), a project must be located in the United States and meet both of the following criteria:
Under the solicitation, the first round of application materials is due on October 1, 2014. For more information on the opportunity, contact the Energy Department, or consult a professional experienced with financing and developing energy projects.
The Preti Flaherty team advises our clients on all aspects of energy project development, including the pursuit of federal funding and financial support. For more information, please contact Todd Griset at 207-623-5300.
The Renewable Energy and Efficient Energy Projects Loan Guarantee program is intended to support the first commercial-scale deployments of the next wave of innovative clean energy technologies. Through the program, the Energy Department solicits applications for loan guarantees. When a successful applicant borrows money for project finance from a commercial bank, the federal government promises to assume the borrower's debt obligation if that borrower defaults. This guarantee serves as a credit backstop for the borrower, ultimately reducing its cost of financing because the lender knows it has resort to federal funds if the borrower cannot repay the loan.
The current program follows a series of previous Energy Department loan guarantee programs. These programs have helped finance projects including the NRG Solar, LLC's 290-megawatt Agua Caliente solar photovoltaic array (the world's largest), NRG Energy, Inc.'s 392-megwatt Brightsource concentrating solar power (CSP) plant (also the world's largest), the 845-megawatt Caithness Shepherds Flat wind project, and Abengoa Bioenergy Biomass of Kansas LLC's cellulosic ethanol plant. While not all of the previous programs' awardees have been successful -- for example, failed solar panel maker Solyndra -- the Department touts the programs as aligned with President Obama's Climate Action Plan, by supporting investment in domestic energy resources and reductions in greenhouse gas emissions.
To be eligible for the present solicitation (48-page PDF), a project must be located in the United States and meet both of the following criteria:
1. Use renewable energy systems; efficient electrical generation, transmission, and distribution technologies; or efficient end-use energy technologies; andBeyond these general criteria, the Energy Department's Loan Programs Office has identified five target areas for awards:
2. Meet both of the following requirements : a) Avoid, reduce, or sequester anthropogenic emission of greenhouse gases; and b) employ new or significantly improved technology as compared to commercial technology in service in the United States.
- Advanced Grid Integration and Storage: mitigating issues related to variability, dispatchability, congestion, and control of renewable energy systems by incorporating technologies such as demand response or local storage, enabling enhanced integration of renewable energy into the grid.
- Drop-In Biofuels: developing biofuels that are more compatible with today’s engines, delivery infrastructure and refueling station equipment, enabling nearly identical bio-based substitutes for crude oil, gasoline, diesel fuel, and jet fuel.
- Waste-to-Energy: projects using waste materials which are otherwise discarded, such as landfill methane and segregated waste, as energy sources.
- Enhancement of Existing Facilities: incorporating renewable generation technology into existing renewable energy and efficient energy facilities to significantly enhance performance or extend the lifetime of the generating asset.
- Efficiency Improvements: projects incorporating new or improved technologies to further improve on energy efficiency that would substantially reduce greenhouse gases.
Under the solicitation, the first round of application materials is due on October 1, 2014. For more information on the opportunity, contact the Energy Department, or consult a professional experienced with financing and developing energy projects.
The Preti Flaherty team advises our clients on all aspects of energy project development, including the pursuit of federal funding and financial support. For more information, please contact Todd Griset at 207-623-5300.
July 27, 2011 - why FERC issued Order No. 1000, and what it means
Wednesday, July 27, 2011
I've been covering FERC Order 1000, a landmark regulatory decision that will reshape the U.S. electric grid.
To understand what FERC's Order No. 1000 means for the U.S. transmission system, you need to understand the direction in which the electric industry is changing. A shift in the generation mix coupled with a sharp uptick in transmission line construction are largely responsible for the need for reforms.
Utility investment in transmission lines is booming. For example, utility members of the Edison Electric Institute reported $55.3 billion in new transmission facility investment, while another report commissioned by EEI suggests about $298 billion in new transmission facility needs between 2010 and 2030. In the next five years, new transmission line mileage will be built at a rate nearly three times higher than the historical average.
Why is so much new transmission line being built? FERC points to changes in the generation mix. Between air emissions regulation, state renewable portfolio standards, and fuel costs, the mix of energy resources used to generate electricity is shifting. An increasing reliance on natural gas and large-scale integration of renewable generation means new transmission lines are needed to connect these new generators to markets. Meanwhile, while coal-fired generation continues to be significant, some facilities like the Salem Harbor Power Station are being retired. The existing electric grid was not built to accommodate these shifts in the energy mix.
With so much transmission line development underway, the stakes are high. How lines are planned affects whether society finds the least-cost solution to our electric needs. How the costs of new transmission lines are split affects whether users of the electric grid -- including both consumers and generators -- get fair treatment. In issuing Order No. 1000, FERC concluded that the status quo can lead to inefficient and higher-cost decisions being made:
To understand what FERC's Order No. 1000 means for the U.S. transmission system, you need to understand the direction in which the electric industry is changing. A shift in the generation mix coupled with a sharp uptick in transmission line construction are largely responsible for the need for reforms.
Utility investment in transmission lines is booming. For example, utility members of the Edison Electric Institute reported $55.3 billion in new transmission facility investment, while another report commissioned by EEI suggests about $298 billion in new transmission facility needs between 2010 and 2030. In the next five years, new transmission line mileage will be built at a rate nearly three times higher than the historical average.
Why is so much new transmission line being built? FERC points to changes in the generation mix. Between air emissions regulation, state renewable portfolio standards, and fuel costs, the mix of energy resources used to generate electricity is shifting. An increasing reliance on natural gas and large-scale integration of renewable generation means new transmission lines are needed to connect these new generators to markets. Meanwhile, while coal-fired generation continues to be significant, some facilities like the Salem Harbor Power Station are being retired. The existing electric grid was not built to accommodate these shifts in the energy mix.
With so much transmission line development underway, the stakes are high. How lines are planned affects whether society finds the least-cost solution to our electric needs. How the costs of new transmission lines are split affects whether users of the electric grid -- including both consumers and generators -- get fair treatment. In issuing Order No. 1000, FERC concluded that the status quo can lead to inefficient and higher-cost decisions being made:
We conclude that the narrow focus of current planning requirements and shortcomings of current cost allocation practices create an environment that fails to promote the more efficient and cost-effective development of new transmission facilities, and that addressing these issues is necessary to ensure just and reasonable rates.Order No. 1000 aims to fix these shortcomings through new requirements on the transmission planning and cost allocation processes.
July 21, 2010 - balancing wind into the grid; underperforming community wind turbine; China's Three Gorges Dam flooding
Wednesday, July 21, 2010
License plate seen in Maine:
How much wind can we really integrate into today's power grid? An interesting article in the Oregonian highlights the challenges. Take, for example, what happened on May 19, when the wind shifted and Bonneville Power Authority grid operators had to make room on the wires for 1000 turbines' worth of wind (nearly 2000 MW). This is a lot of power: more power than the BPA control area needs, more than the amount of hydro production that could be ramped down, and more than BPA could export to neighboring control areas. So what did BPA do? It told wind generators to feather their blades and cut their production -- a less than ideal solution.
In a parallel scenario, Venezuela is undergoing rolling blackouts. Venezuela relies on hydroelectricity for 70% of its power, and a long-lasting drought has crippled power production. Critics also point to chronic mismanagement and underinvestment by the nationalized companies that operate the power grid.
The City of Saco, Maine, is in a bit of a pickle over its community wind project. Back in 2007, Saco bought the turbine and tower for $207,000 from Entegrity Wind Systems. (As mentioned in an earlier blog post, Kittery also bought a turbine from Entegrity. It did better than Saco's, but Kittery's turbine underperformed as well.) At the time, community-scale wind was all the rage. The Maine Legislature had directed the Maine Public Utilities Commission to organize a stakeholder process to evaluate the state's opportunities for community wind. Although this process ultimately resulted in a report concluding that community wind was not generally economic under current conditions, many people and communities decided to pursue small- and medium-scale renewable project for their civic, educational and environmental values.
When Saco bought the turbine, Entegrity told Saco that the unit would generate 90,000 kilowatt-hours annually (about $12,600 worth of electricity) for 10 years. The unit came online in February 2008. It never performed as well as Entegrity had represented. At some point, former Entegrity head James Heath offered to buy the turbine back for $130,000. Then the turbine broke. In the meantime, Entegrity Wind Systems went bankrupt. The City was left holding the underperforming turbine.
Now, the Saco City Council is considering its options. Repair the turbine? Sell the turbine? Negotiate with James Heath? Litigation?
In other news: China's Three Gorges Dam is facing record flooding, comparable to the 1988 floods that killed over 4000 people. The dam had been touted as offering protection against floods. So far the dam is holding, but the massive reservoir is within 20 meters of full. More water is on its way.
A new report by the Maine State Chamber of Commerce and the Maine Development Foundation suggests that Maine businesses' most critical challenges come from health insurance costs, energy, taxes, regulations and transportation, in that order. A Lewiston Sun Journal editorial calls for an end to "destructive regulatory practices" that drive money, businesses and people out of Maine.
WCSH 6 reports on the plans of Ocean Energy Institute founder Matt Simmons to transform Maine into the "Silicon Valley of ocean energy". The Ocean Energy Institute has previously expressed interest in exploring links between offshore wind and ammonia production for energy storage.
 |
| From Energy Policy Update |
How much wind can we really integrate into today's power grid? An interesting article in the Oregonian highlights the challenges. Take, for example, what happened on May 19, when the wind shifted and Bonneville Power Authority grid operators had to make room on the wires for 1000 turbines' worth of wind (nearly 2000 MW). This is a lot of power: more power than the BPA control area needs, more than the amount of hydro production that could be ramped down, and more than BPA could export to neighboring control areas. So what did BPA do? It told wind generators to feather their blades and cut their production -- a less than ideal solution.
In a parallel scenario, Venezuela is undergoing rolling blackouts. Venezuela relies on hydroelectricity for 70% of its power, and a long-lasting drought has crippled power production. Critics also point to chronic mismanagement and underinvestment by the nationalized companies that operate the power grid.
The City of Saco, Maine, is in a bit of a pickle over its community wind project. Back in 2007, Saco bought the turbine and tower for $207,000 from Entegrity Wind Systems. (As mentioned in an earlier blog post, Kittery also bought a turbine from Entegrity. It did better than Saco's, but Kittery's turbine underperformed as well.) At the time, community-scale wind was all the rage. The Maine Legislature had directed the Maine Public Utilities Commission to organize a stakeholder process to evaluate the state's opportunities for community wind. Although this process ultimately resulted in a report concluding that community wind was not generally economic under current conditions, many people and communities decided to pursue small- and medium-scale renewable project for their civic, educational and environmental values.
When Saco bought the turbine, Entegrity told Saco that the unit would generate 90,000 kilowatt-hours annually (about $12,600 worth of electricity) for 10 years. The unit came online in February 2008. It never performed as well as Entegrity had represented. At some point, former Entegrity head James Heath offered to buy the turbine back for $130,000. Then the turbine broke. In the meantime, Entegrity Wind Systems went bankrupt. The City was left holding the underperforming turbine.
Now, the Saco City Council is considering its options. Repair the turbine? Sell the turbine? Negotiate with James Heath? Litigation?
In other news: China's Three Gorges Dam is facing record flooding, comparable to the 1988 floods that killed over 4000 people. The dam had been touted as offering protection against floods. So far the dam is holding, but the massive reservoir is within 20 meters of full. More water is on its way.
A new report by the Maine State Chamber of Commerce and the Maine Development Foundation suggests that Maine businesses' most critical challenges come from health insurance costs, energy, taxes, regulations and transportation, in that order. A Lewiston Sun Journal editorial calls for an end to "destructive regulatory practices" that drive money, businesses and people out of Maine.
WCSH 6 reports on the plans of Ocean Energy Institute founder Matt Simmons to transform Maine into the "Silicon Valley of ocean energy". The Ocean Energy Institute has previously expressed interest in exploring links between offshore wind and ammonia production for energy storage.
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