FERC to encourage storage technologies including hydro

The chairman of the Federal Energy Regulatory Commission has pledged to help reduce barriers and ensure appropriate tariff treatment for increased development of electricity storage technologies including pumped-storage hydropower.

Chairman Jon Wellinghoff testified Dec. 10, 2009, before the Senate Energy and Natural Resources Committee on the regulatory and technical issues related to the integration of electricity storage into the nation’s transmission grid.

“Energy storage offers the ability to ‘warehouse’ electrons for consumption later or to balance the variability of some renewable resources,” Wellinghoff said. “It alters the traditional assumption of a linear electrical network, which assumes that centralized generators send electrons through transmission and distribution systems to instantaneously match need.”

The chairman said storage can improve grid optimization via energy arbitrage, defer the need for transmission investments to meet peak load, provide backup power, and provide ancillary services such as regulation service.

Wellinghoff noted, to date, the most-used bulk electricity storage technology is pumped-storage hydropower.

“Presently, there are 24 pumped-storage projects around the nation with an installed capacity of over 19,500 MW,” he said. “But new storage technologies are under development, and in some cases being deployed, that could provide substantial value to the electric grid.”

The chairman particularly noted the development of closed-loop pumped storage that utilizes upper and lower reservoirs that are not linked to the natural ecosystem.

“This allows operational flexibility not available with a traditional pumped-storage hydroelectric system, which uses natural rivers and reservoirs and must regulate flow to avoid harming local ecosystems,” he said. “Currently, the commission has issued preliminary permits for pumped storage — both traditional and closed-loop — totaling over 27,000 MW of capacity. Over one-quarter of this capacity is closed-loop.”

Wellinghoff also touched on development of other storage technologies including flywheels, grid-scale batteries, and use of batteries in idle electric vehicles.

The chairman said tariff actions already are under way in New York, the Midwest, the Northeast, and the Mid-Atlantic region to encourage integration of electricity storage into grid systems. Additionally, FERC is looking at methods to remove regulatory barriers to the adoption of storage technology.

Wellinghoff noted he delivered a five-year strategic plan to Congress in October, in which FERC committed to address possible barriers to renewable energy, including the need to implement storage of intermittent renewable energy. (HydroWorld 10/8/09) FERC also adopted a Smart Grid Policy Statement setting priorities for development of standards it says are crucial to a reliable and “smart grid.” (HydroWorld 7/20/09) Those include storage technologies.

“Most existing tariffs or markets do not compensate resources for superior speed or accuracy of regulation response, but such payment may be appropriate in the future as system operators gain experience with the capabilities of storage technologies,” Wellinghoff said.

The chairman said fully opening wholesale markets to resources like storage will make it easier to meet renewable energy standards by efficiently matching renewable energy resources and demand resources with distributed storage resources to smooth variations in resource output.

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