Meeting #37: Storage: the Other Distributed Resource

Tuesday, March 3, 2015
10:00am – 3:15pm
Energy Hall, 25th Floor
2301 Market Street
Philadelphia, PA


This meeting began with an update on the status of PJM’s proposal for allowing Demand Response (DR) resources to participate in Base Residual (Capacity) Auctions. After that, we moved on to the main topic of the day: using storage systems as a distributed resource for the PJM electric grid.

In the U.S., there are currently 41 pumped storage facilities in operation, providing 21 GW of nameplate capacity – roughly 2% of total U.S. generating capacity. More than 5 GW of pumped storage capacity lies within the PJM footprint. For many decades, PJM and other grid operators have recognized that these utility-scale electricity storage systems can provide reliability and economic benefits to electric consumers. Smaller, distributed storage systems, on the other hand, have historically proven to be prohibitively expensive in most applications. But that is changing. The costs of distributed energy storage systems have dropped dramatically in recent years, and the number of installed systems has steadily grown. And with the even more rapid growth of variable energy resources like wind turbines and solar photovoltaics, the value of storage systems (utility-scale or distributed) for balancing and ancillary services is also improving. We are now at or near the point where distributed storage resources can no longer be categorically dismissed as unproven, impractical, or too expensive. This session thus explored the status of distributed storage technologies and applications, as well as a variety of issues regarding regulatory treatment and cost recovery.


9:30 – 10:00am
Networking with attendees

10:00 – 10:15am
The Honorable Lawrence Brenner, Maryland Public Service Commission
Janine Migden-Ostrander, Regulatory Assistance Project

10:15 – 11:30am
Update on PJM Proposal for DR in the Capacity Market
Pete Langbein and Denise Foster, PJM: PJM Stop Gap FERC filing to address EPSA order
Frank Lacey, Comverge: Potential Solutions to the "EPSA" Problem

At the December 2014 MADRI meeting, PJM provided an advance look at its proposal for including DR resources in the capacity market. This proposal was developed as a stop-gap in the midst of great uncertainty in the wake of the U.S. Court of Appeals for the D.C. Circuit Court decision in Electric Power Supply Association v. FERC. PJM filed the new proposal with FERC on January 14, 2015. In this first session, PJM provided a brief update on the status of their proposal and current plans for including DR in the capacity market. We then heard a response from a utility and a DR provider.

11:30am - 12:45pm

Storage – Status of Technologies and Applications 
Erich Gunther, Enernex: Energy Storage Update: Technology and Operational Implications
Anissa Dehamna, Navigant: Distributed Storage Market
John Fernandes, RES Americas: Energy Storage Market Overview

For the second panel, we heard from industry experts about the current status of distributed storage systems. We learned about the technologies that have been deployed, their capabilities and applications, and their costs. We also heard projections and predictions about what the future holds for distributed storage systems.

12:45 - 1:45pm

1:45 – 3:00pm
Storage – Regulatory Treatment and Cost Recovery
Imre Gyuk, U.S. Department of Energy: DOE Energy Storage: Projects, State Initiatives, and Evaluation Tools
Judy Chang, Brattle Group: The Value of Distributed Electrical Energy Storage in Texas

The electric power system is often described as having three fundamental components: generators, transmission systems, and distribution systems. Distributed storage systems do not fit nicely within this model. Depending on how they are operated and for what purposes, and depending on the time of day, these systems can consume energy, deliver energy, or provide ancillary services. The versatility and complexity of distributed storage systems raises interesting and difficult questions for regulators about regulatory jurisdiction (federal vs. state), access to competitive electricity markets, cost recovery of utility-owned assets, tariffs for customers with distributed storage (and possibly distributed generation), etc. Our final panel of the day explored these issues.

3:00 – 3:15pm
Wrap-Up, Adjournment
The Honorable Lawrence Brenner, Maryland Public Service Commission
John Shenot, Regulatory Assistance Project