| | Nov - Dec 20208RESOURCE ADEQUACY AND GRID FLEXIBILITY DEPEND ON ANALYTICS FOR ENERGY STORAGEGrid flexibility is a critical piece of today's energy landscape. It is becoming clear that in markets with a high percentage of renewable power, making sure that clean energy is available when and where it is needed, often referred to as `resource adequacy' (RA), is becoming a central issue in evolving utility markets. Nowhere is this more evident than in California, with the recent decision to give the state's two largest utilities an expanded role in the procurement plan for grid reliability and it's affect on how renewable resources are able to participate in the state's RA requirements. Energy storage has the opportunity to play a significant role in meeting the RA needs of grid operators, whether they have mandated RA requirements like California or there is a market-based approach to capacity like ERCOT.The idea behind RA is simple enough, grid operators want to make sure that there is enough power capacity to meet demand despite potential changes to that demand related to weather, power plant maintenance or grid emergencies. RA is a form of insurance that can de-risk the operation of the grid by essentially paying or otherwise incentivizing power producers to have additional generation capacity on standby. California's RA program was developed in response to the crisis of 2000-01 where rolling blackouts and pricing spikes led to customer dissatisfaction and chaotic markets. The state does not run a capacity market but instead relies on retailers to provide RA. In other markets, like PJM or ISO-NE, reserve margin procurement is driven more by modelling demand curves and generators bid into a capacity market auction. ERCOT has a market-based approach to RA whereby pricing is expected to drive power producers to make capacity available to the grid when needed. All of these markets have one thing in common and that is the impact that clean energy goals are having on how reserve capacity is viewed and what role energy storage will play in the wholesale and retail markets going forward. Energy storage has traditionally meant pumped hydro storage, which currently accounts for over 90% of grid energy storage in the United States, but the increased use of battery energy storage systems (BESS) due to reduced cost and increased flexibility in how the BESS can participate in the market has led to a rethinking of the role of battery storage in capacity and ancillary services markets. BESS participation in these markets can vary across ISO's and RTO's, but with FERC Order 841, the rules now necessitate fair compensation for BESS participation in wholesale markets and may open up opportunities in grid markets like By Sean Halloran, Vice President of Wellsite Technology at Ensign Energy ServicesIN MY OPINION
< Page 7 | Page 9 >