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NYISO implements rules for energy storage resources, including pumped storage hydro

The New York Independent System Operator (NYISO) has announced the final step in a years-long process to open its wholesale energy markets to energy storage resources (ESRs), including pumped storage hydropower.

This development makes NYISO the first ISO/RTO in the U.S. to allow full participation of these resources and helps position the state to meet the aggressive mandates in the Climate Leadership and Community Protection Act (CLCPA), according to a press release.

“This is an exciting development for the state and consumers as we move toward meeting the mandates in the CLCPA,” said Rich Dewey, president and chief executive officer of NYISO. “By allowing ESRs to fully participate in our markets, we open up new revenue streams that will attract greater private investment in these resources and spur innovation. The private investment will ensure the risks of investment remain on developers and not consumers. Combined with our broader Grid In Transition efforts intended to reliably integrate renewables into the grid, we are in a good position to help the state and the Climate Action Council as they continue their work on implementing the CLCPA.

ESRs — which include batteries, flywheels, pumped storage, and compressed air storage — have unique capabilities that can help grid operators meet demand, manage the variability of intermittent resources, and potentially defer transmission upgrades. Their ability to withdraw from and inject energy into the grid can provide resource flexibility and grid resilience. ESRs can also help improve the cost-effectiveness of the system by charging during periods of low demand and low prices and supplying energy to the grid during periods of high demand when prices typically rise.

These developments also help NYISO’s work with stakeholders in creating a “hybrid storage model,” which will allow ESRs to co-locate with generating resources like wind and solar. Developing a method for hybrid resource participation in the wholesale markets will potentially improve the performance of intermittent renewable resources, supporting policy efforts to integrate more clean energy into the grid, NYISO said.

NYISO is an independent, not-for-profit corporation responsible for operating the state’s bulk electricity grid, administering New York’s competitive wholesale electricity markets, conducting comprehensive long-term planning for the state’s electric power system, and advancing the technological infrastructure of the state’s electric system.