电网规模电池存储

GRIDINTEGRATIONTOOLKIT

Grid-ScaleBatteryStorage

FrequentlyAskedQuestions

Whatisgrid-scalebatterystorage?

Batterystorageisatechnologythatenablespowersystemoperatorsandutilitiestostoreenergyforlateruse.Abatteryenergystoragesystem(BESS)isanelectrochemicaldevicethatcharges(orcollectsenergy)fromthegridorapowerplantandthendischargesthatenergyatalatertime

toprovideelectricityorothergridserviceswhenneeded.Severalbatterychemistriesareavailableorunderinvestigationforgrid-scaleapplications,includinglithium-ion,lead-acid,redoxflow,andmoltensalt(includingsodium-basedchemistries).1Batterychemistriesdifferinkeytechnicalcharacteristics(

seeWhatarekeycharacteristicsofbatterystorage

systems?

),andeachbatteryhasuniqueadvantagesanddisadvantages.

Thecurrentmarketforgrid-scalebatterystorageintheUnitedStatesandgloballyisdominatedbylithium-ionchemistries(Figure1).Duetotech-nologicalinnovationsandimprovedmanufacturingcapacity,lithium-ionchemistrieshaveexperiencedasteeppricedeclineofover70%from2010-2016,andpricesareprojectedtodeclinefurther(Curry2017).

Energy(MWh) Power(MW)

AnnualInstalledCapacity

250

200

150

100

50

Increasingneedsforsystemflexibility,combinedwithrapiddecreasesinthecostsofbatterytechnology,haveenabledBESStoplayanincreasingroleinthepowersysteminrecentyears.AspricesforBESScontinuetodeclineandtheneedforsystemflexibilityincreaseswithwindandsolardeployment,morepolicymakers,regulators,andutili-tiesareseekingtodeveloppoliciestojump-startBESSdeployment.

Isgrid-scalebatterystorageneededforrenewableenergyintegration?

Batterystorageisoneofseveraltechnologyoptionsthatcanenhancepowersystemflexibilityandenablehighlevelsofrenewableenergyintegration.Studiesandreal-worldexperiencehavedemonstratedthatinterconnectedpowersystemscansafelyandreliablyintegratehighlevelsofrenewableenergyfromvariablerenewableenergy(VRE)sourceswithoutnewenergystorageresources.2Thereisnorule-of-thumbforhowmuchbatterystorageisneededtointegratehighlevelsofrenewableenergy.Instead,theappropriateamountofgrid-scalebatterystoragedependsonsystem-specificcharacteristics,including:

Thecurrentandplannedmixofgenerationtechnologies

Flexibilityinexistinggenerationsources

Interconnectionswithneighboringpowersystems

Thehourly,daily,andseasonalprofileofelectricitydemand,and

0

'08'09'10'11'12'13'14'15'16'17

'08'09'10'11'12'13'14'15'16'17

Thehourly,daily,andseasonalprofileofcurrentandplannedVRE.

Chemistry

YearInstalled

Lead-acid Sodium-based

Lithium-Ion Other

RedoxFlow

Inmanysystems,batterystoragemaynotbethemosteconomicresourcetohelpintegraterenewableenergy,andothersourcesofsystemflexibilitycanbeexplored.Additionalsourcesofsystemflexibilityinclude,amongothers,buildingadditionalpumped-hydrostorageortransmission,increasingconventionalgenerationflexibility,

Figure1:U.S.utility-scalebatterystoragecapacityby

chemistry(2008-2017).Datasource:U.S.EnergyInformationAdministration,FormEIA-860,

AnnualElectricGeneratorReport

andchangingoperatingprocedures(Cochranetal.2014).

Forinformationonbatterychemistriesandtheirrelativeadvantages,seeAkhiletal.(2013)andKimetal.(2018).

Forexample,Lewetal.(2013)foundthattheUnitedStatesportionoftheWesternInterconnectioncouldachievea33%penetrationofwindandsolarwithoutadditionalstorageresources.Palchaketal.(2017)foundthatIndiacouldincorporate160GWofwindandsolar(reachinganannualrenewablepenetrationof22%ofsystemload)withoutadditionalstorageresources.

|

www.

/usaid-partnership

Grid-ScaleBatteryStorage:FrequentlyAskedQuestions

PAGE

2

Whatarethekeycharacteristicsofbatterystoragesystems?

Ratedpowercapacityisthetotalpossibleinstantaneousdischargecapability(inkilowatts[kW]ormegawatts[MW])oftheBESS,orthemaximumrateofdischargethattheBESScanachieve,startingfromafullychargedstate.

Energycapacityisthemaximumamountofstoredenergy(inkilowatt-hours[kWh]ormegawatt-hours[MWh])

Storagedurationistheamountoftimestoragecandischargeatitspowercapacitybeforedepletingitsenergycapacity.Forexample,abatterywith1MWofpowercapacityand4MWhofusableenergycapacitywillhaveastoragedurationoffourhours.

Cyclelife/lifetimeistheamountoftimeorcyclesabatterystoragesystemcanprovideregularcharginganddischargingbeforefailureorsignificantdegradation.

Self-dischargeoccurswhenthestoredcharge(orenergy)ofthebatteryisreducedthroughinternalchemicalreactions,orwithoutbeingdischargedtoperformworkforthegridoracustomer.

Self-discharge,expressedasapercentageofchargelostoveracertainperiod,reducestheamountofenergyavailablefordischargeandisanimportantparametertoconsiderinbatteriesintendedforlonger-dura-tionapplications.

Stateofcharge,expressedasapercentage,representsthebattery’spresentlevelofchargeandrangesfromcompletelydischargedtofullycharged.Thestateofchargeinfluencesabattery’sabilitytoprovideenergyorancillaryservicestothegridatanygiventime.

Round-tripefficiency,measuredasapercentage,isaratiooftheenergychargedtothebatterytotheenergydischargedfromthebattery.ItcanrepresentthetotalDC-DCorAC-ACefficiencyofthebatterysystem,includinglossesfromself-dischargeandotherelectricallosses.AlthoughbatterymanufacturersoftenrefertotheDC-DCefficiency,AC-ACefficiencyistypicallymoreimportantto

utilities,astheyonlyseethebattery’scharginganddischargingfromthepointofinterconnectiontothepowersystem,whichusesAC(Denholm2019).

Whatservicescanbatteriesprovide?

Arbitrage:Arbitrageinvolveschargingthebatterywhenenergypricesarelowanddischargingduringmoreexpensivepeakhours.FortheBESSoperator,thispracticecanprovideasourceofincomebytakingadvantageofelectricitypricesthatmayvarythroughouttheday.Oneextensionoftheenergyarbitrageserviceisreducingrenewableenergycurtailment.Systemoperatorsandprojectdevelopershaveaninterestinusingasmuchlow-cost,emissions-freerenewableenergygenerationaspossible;however,insystemswithagrowingshareofVRE,limitedflexibilityofconventionalgeneratorsandtemporalmismatchesbetweenrenewableenergysupplyandelectricitydemand(e.g.,excesswind

generationinthemiddleofthenight)mayrequirerenewablegeneratorstocurtailtheiroutput.Bychargingthebatterywithlow-costenergyduringperiodsofexcessrenewablegenerationanddischargingduringperiodsofhighdemand,BESScanbothreducerenewableenergycurtailmentandmaximizethevalueoftheenergydeveloperscansell

tothemarket.Anotherextensionofarbitrageinpowersystemswithoutelectricitymarketsisload-leveling.Withload-levelling,systemopera-torschargebatteriesduringperiodsofexcessgenerationanddischargebatteriesduringperiodsofexcessdemandtomoreefficientlycoordinatethedispatchofgeneratingresources.

FirmCapacityorPeakingCapacity:Systemoperatorsmustensuretheyhaveanadequatesupplyofgenerationcapacitytoreliablymeetdemandduringthehighest-demandperiodsinagivenyear,orthepeakdemand.Thispeakdemandistypicallymetwithhigher-costgenerators,suchasgasplants;however,dependingontheshapeoftheloadcurve,BESScanalsobeusedtoensureadequatepeakinggenerationcapacity.WhileVREresourcescanalsobeusedtomeetthisrequirement,theseresourcesdonottypicallyfullycounttowardfirmcapacity,astheirgenerationreliesontheavailabilityoffluctuatingresourcesandmaynotalwayscoincidewithpeakdemand.ButsystemoperatorscanimproveVRE’sabilitytocontributetofirmcapacityrequirementsthroughpairingwithBESS.PairingVREresourceswithBESScanenabletheseresourcestoshifttheirgenerationtobecoincidentwithpeakdemand,improvingtheircapacityvalue(seetextboxbelow)andsystemreliability.

FirmCapacity,CapacityCredit,andCapacityValueareimportantconceptsforunderstandingthepotentialcontributionofutility-scaleenergystorageformeetingpeakdemand.

FirmCapacity(kW,MW):Theamountofinstalledcapacitythatcanbereliedupontomeetdemandduringpeakperiodsorotherhigh-riskperiods.Theshareoffirmcapacitytothetotalinstalledcapacityofageneratorisknownasitscapacitycredit(%).3

CapacityValue($):Themonetaryvalueofthecontributionofagenerator(conventional,renewable,orstorage)tobalancingsupplyanddemandwhengenerationisscarce.

OperatingReservesandAncillaryServices:Tomaintainreliablepowersystemoperations,generationmustexactlymatchelectricitydemandatalltimes.Therearevariouscategoriesofoperatingreservesandancillaryservicesthatfunctionondifferenttimescales,fromsubsec-ondstoseveralhours,allofwhichareneededtoensuregridreliability.BESScanrapidlychargeordischargeinafractionofasecond,faster

SeeMillsandWiser(2012)forageneraltreatmentontheconceptofcapacitycredit.

thanconventionalthermalplants,makingthemasuitableresourceforshort-termreliabilityservices,suchasPrimaryFrequencyResponse(PFR)andRegulation.AppropriatelysizedBESScanalsoprovidelonger-durationservices,suchasload-followingandrampingservices,toensuresupplymeetsdemand.

TransmissionandDistributionUpgradeDeferrals:Theelectricitygrid’stransmissionanddistributioninfrastructuremustbesizedtomeetpeakdemand,whichmayonlyoccuroverafewhoursoftheyear.Whenanticipatedgrowthinpeakelectricitydemandexceedstheexistinggrid’scapacity,costlyinvestmentsareneededtoupgradeequipmentanddevelopnewinfrastructure.DeployingBESScanhelpdeferorcircum-venttheneedfornewgridinvestmentsbymeetingpeakdemandwithenergystoredfromlower-demandperiods,therebyreducingcongestionandimprovingoveralltransmissionanddistributionassetutilization.

Also,unliketraditionaltransmissionordistributioninvestments,mobileBESSinstallationscanberelocatedtonewareaswhennolongerneededintheoriginallocation,increasingtheiroverallvaluetothegrid.

BlackStart:Whenstartingup,largegeneratorsneedanexternalsourceofelectricitytoperformkeyfunctionsbeforetheycanbegingeneratingelectricityforthegrid.Duringnormalsystemconditions,thisexternal

electricitycanbeprovidedbythegrid.Afterasystemfailure,however,thegridcannolongerprovidethispower,andgeneratorsmustbestartedthroughanon-sitesourceofelectricity,suchasadieselgenerator,aprocessknownasblackstart.Anon-siteBESScanalsoprovidethisservice,avoidingfuelcostsandemissionsfromconventionalblack-startgenerators.Assystem-wideoutagesarerare,anon-siteBESScanprovideadditionalserviceswhennotperformingblackstarts.

Table1belowsummarizesthepotentialapplicationsforBESSintheelectricitysystem,aswellaswhethertheapplicationiscurrently

valuedinU.S.electricitymarkets(Denholm2018).Figure2showsthecumulativeinstalledcapacity(MW)forutility-scalestoragesystemsintheUnitedStatesin2017bytheservicethesystemsprovide.

Whereshouldbatteriesbelocated?

Utility-scaleBESScanbedeployedinseverallocations,including:1)inthetransmissionnetwork;2)inthedistributionnetworknearloadcenters;or3)co-locatedwithVREgenerators.ThesitingoftheBESShasimportantimplicationsfortheservicesthesystemcanbestprovide,andthemostappropriatelocationfortheBESSwilldependonitsintended-usecase.

MoststoragesystemsintheUnitedStatesprovideoperatingreservesandancillaryservices.Despitethiscurrentfocus,thetotalU.S.marketfortheseservicesislimited,andutility-scalestoragemaybeginprovidingmorefirmandpeakcapacityinthenearfuture.

OperatingReservesandAncillaryServices

Arbitrage,RECurtailmentReductionandLoad-levelling

FirmCapacityorPeakingCapacity

BlackStart

TransmissionandDistributionUpgradeDeferrals

0 100 200 300 400 500 600

Figure2:U.S.Utility-scalebatterystoragecapacitybyservice.Datasource:U.S.EnergyInformationAdministration,FormEIA-860,

AnnualElectricGeneratorReport

Inmanycases,aBESSwillbetechnicallycapableofprovidingabroadrangeofservicesinanyofthelocationsdescribedinthenextsection.Therefore,whensitingstorage,itisimportanttoanalyzethecostsandbenefitsofmultiplelocationstodeterminetheoptimalsitingtomeetsystemneeds.ConsideringallcombinationsofservicestheBESScanprovideateachpotentialsitewillprovideabetterunderstandingoftheexpectedrevenuestreams(

seeWhatisvalue-stacking?

)andimpactonthegrid.

IntheTransmissionNetwork

BESSinterconnectedtothetransmissionsystemcanprovideabroadrangeofancillaryandtransmission-relatedservices.Thesesystemscanbedeployedtoreplaceordeferinvestmentsofpeakingcapacity,provideoperatingreservestohelprespondtochangesingenerationanddemand,ortheycanbeusedtodefertransmissionsystemupgradesinregionsexperiencingcongestionfromloadorgenerationgrowth.Figure3belowshowstheconfigurationofautility-scalestoragesysteminterconnectedatthetransmissionsubstationlevel.

IntheDistributionNetworkNearLoadCenters

Storagesystemslocatedinthedistributionnetworkcanprovidealloftheservicesastransmission-sitedstorage,inadditiontoseveralservicesrelatedtocongestionandpowerqualityissues.Inmanyareas,itmaybedifficulttositeaconventionalgeneratornearloadinordertoprovidepeakingcapacity,duetoconcernsaboutemissionsorlanduse.Duetotheirlackoflocalemissionsandtheirscalablenature,BESSsystemscanbeco-locatednearloadwithfewersitingchallengesthanconventionalgeneration.Placingstoragenearloadcanreducetransmissionanddistributionlossesandrelievecongestion,helpingdefertransmissionanddistributionupgrades.Distribution-levelBESSsystemscanalsoprovidelocalpowerqualityservicesandsupportimprovedresilienceduringextremeweatherevents.

Table1:ApplicationsofUtility-ScaleEnergyStorage

Application

Description

DurationofServiceProvision

TypicallyValuedinU.S.ElectricityMarkets?

Arbitrage

Purchasinglow-costoff-peakenergyandsellingitduringperiodsofhighprices.

Hours

Yes

FirmCapacity

Providereliablecapacitytomeetpeaksystemdemand.

4+hours

Yes,viascarcitypricingandcapacitymarkets,orthroughresourceadequacypayments.

OperatingReserves

Veryfastresponsetounpredictablevariationsindemandandgeneration.

Seconds

Yes,butonlyinalimitednumberofmarkets.

PrimaryFrequencyResponse

Regulation

Fastresponsetorandom,unpredictablevariationsindemandandgeneration.

15minutesto1hour

Yes

ContingencySpinning

Fastresponsetoacontingencysuchasageneratorfailure.

30minutesto2hours

Yes

Replacement/Supplemental

Unitsbroughtonlinetoreplacespinningunits.

Hours

Yes,butvaluesareverylow.

Ramping/LoadFollowing

Followlonger-term(hourly)changesinelectricitydemand.

30minutestohours

Yes,butonlyinalimitednumberofmarkets.

TransmissionandDistributionReplacementandDeferral

ReduceloadingonT&Dsystemduringpeaktimes.

Hours

Onlypartially,viacongestionprices.

Black-Start

Unitsbroughtonlinetostartsystemafterasystem-widefailure(blackout).

Hours

No,typicallycompensatedthroughcost-of-servicemechanisms.

Co-LocatedwithVREGenerators

Renewableresourcesthatarelocatedfarfromloadcentersmayrequiretransmissioninvestmentstodeliverpowertowhereitisneeded.GiventhevariablenatureofVREresources,thetransmissioncapacityusedtodeliverthepowermaybeunderutilizedforlargeportionsoftheyear.

ABESScanreducethetransmissioncapacityneededtointegratetheseresourcesandincreasetheutilizationoftheremainingcapacitybyusingstoragetochargeexcessgenerationduringperiodsofhighresourceavailabilityanddischargeduringperiodsoflowresourceavailability.

ThesameBESScanbeusedtoreducethecurtailmentofVREgen-eration,eitherduetotransmissioncongestionoralackofadequatedemand,aswellasprovideabroadrangeofancillaryservices.

Whatisvalue-stacking?Whataresomeexamplesofvalue-stackingopportunitiesandchallenges?

BESScanmaximizetheirvaluetothegridandprojectdevelopersbyprovidingmultiplesystemservices.Assomeservicesarerarelycalledfor(i.e.,blackstart)orusedinfrequentlyinagivenhour(i.e.,spinningreserves),designingaBESStoprovidemultipleservicesenablesahigheroverallbatteryutilization.Thismulti-useapproachtoBESS

isknownasvalue-stacking.Forexample,aBESSprojectcanhelpdefertheneedfornewtransmissionbymeetingaportionofthepeakdemandwithstoredenergyduringaselectfewhoursintheyear.Whennotmeetingpeakdemand,theBESScanearnrevenuebyprovidingoperatingreserveservicesforthetransmissionsystemoperator.

DC

LVAC

MVAC

=

+

inverter/charger

~

~~

set-uptransformer

tie-line

-

setpoints

batteries

sinfo

system

operator *BatteryManagementSystem

BMS*

statu

Figure3:KeycomponentsofBESSinterconnectedatthetransmissionsubstationlevel.LVACrepresentsalow-voltageACconnection,whileMVACrepresentsamedium-voltageACconnection.4Source:Denholm(2019)

SomesystemservicesmaybemutuallyexclusivedependingontheBESSdesign(e.g.,ashortdurationstoragedeviceusedtosupplyregulatingreserveswouldhavelimitedvaluefordeferringtransmissionordistributionupgrades).EvenifaBESSistechnicallycapableofpro-vidingmultipleservices,theadditionalcyclingofthebattery(charginganddischarging)maydegradethebatteryandshortenitslifetime

andeconomicviability.Finally,aBESScanonlyprovidealimiteddurationofanysetofservicesbeforeitrunsoutofcharge,whichmeansbatteriesmustprioritizetheservicestheyprovide.

RegulatorshaveavarietyofoptionstoenableBESStomaximizeitseconomicpotentialthroughvalue-stacking.Forexample,theCaliforniaPublicUtilitiesCommission(CPUC)developedcategoriesofservicesBESScanprovidebasedontheirimportanceforreliabilityandlocationonthegrid,aswellas12rulesforutilitieswhenprocuringservicesfromBESS(CPUC2018).TheCPUCrules:

DictatethatBESSprojectscanonlyprovideservicesatthevoltageleveltowhichtheyareinterconnectedorhigher,butnotlower5;

Prioritizereliabilityservicesovernon-reliabilityservicesandensurestoragecannotcontractforadditionalservicesthatwouldinterferewithanyobligationtoprovidereliabilityservices;

RequirethataBESSprojectcomplywithallperformanceandavail-abilityrequirementsforservicesitprovidesandthatnoncompliancepenaltiesbecommunicatedinadvance;

RequirethataBESSprojectinformtheutilityofanyservicesitcurrentlyprovidesorintendstoprovide;and

TakemeasurestopreventdoublecompensationtoBESSprojectsforservicesprovided.

TheseCPUCrulesarejustoneexampleofhowregulatorscanhelpensureBESSprojectscanselectthemostcost-effectivecombinationsofservicestoprovidewithoutnegativelyimpactingthereliabilityofthegrid.

HowareBESSoperatorscompensated?

BESSoperatorscanbecompensatedinseveraldifferentways,includinginthewholesaleenergymarket,throughbilateralcontracts,ordirectlybytheutilitythroughacost-of-servicemechanism.In

awholesaleenergymarket,theBESSoperatorsubmitsabidforaspecificservice,suchasoperatingreserves,tothemarketoperator,whothenarrangesthevalidbidsinaleast-costfashionandselectsasmanybidsasnecessarytomeetthesystem’sdemands.IftheBESSoperator’sbidisselectedandtheBESSprovidestheservice,theoperatorwillreceivecompensationequaltothemarketprice.Thisprocessensurestransparentpricesandtechnology-agnosticconsideration;however,manyservicesarecurrentlynotavailableinthemarket,suchasblackstartortransmissionanddistributionupgradedeferrals.Alternatively,BESSoperatorscanenterintobilateralcontractsforservicesdirectlywithenergyconsumers,orentitieswhichprocureenergyforend-con-sumers.Thisprocessdoesnotensuretransparencyandcontractscandifferwidelyinbothpricesandterms.Finally,someBESSareowneddirectlybytheutilitiestowhomtheyprovideservices,suchasupgradedeferrals.Inthesecost-of-servicecases,theutilitypaystheBESSoperatoratthepredeterminedpriceandrecoversthepaymentsthroughretailelectricityrates.Insomejurisdictions,however,BESSmaybepreventedfromextractingrevenuesthroughbothwholesalemarketsandcost-of-serviceagreements(Bhatnagaretal.2013).

ANSIC84.1:ElectricPowerSystemsandEquipment–VoltageRatings(60Hz)definesalow-voltagesystemashavinganominalvoltagelessthan1kVandmediumvoltageashavinganominalvoltagebetween1kVand100kV.

BESSinterconnectedatthedistributionlevelcanprovidedistributionortransmissionlevelservices,butBESSinterconnectedatthetransmissionlevelcanonlyprovidetransmission-levelservices.

HowdoesthevalueofbatterieschangewithrenewableenergydeploymentandincreasedVREpenetration?

TheamountofrenewableenergyonthegridcaninfluencethevalueandtypesoftheservicesprovidedbyaBESS.Increasedlevelsofrenewableenergymayincreasetheneedforfrequencycontrolservicestomanageincreasedvariabilityanduncertaintyinthepowersystem.IncreasedlevelsofVREpenetrationcanalsochangetheshapeofthenetload,

ortheloadminustheVREgeneration,influencingBESSprojectsthatprovideloadfollowing,arbitrage,peakingcapacity,orsimilarservices.

ModelsoftheCaliforniasystemhaveshownastrongrelationshipbetweensolarPVdeploymentandBESS’abilitytoreplaceconventionalpeakingcapacity,alsoknownastheBESScapacitycredit(DenholmandMargolis2018).Astheshapeoftheloadcurveaffectstheabilityof

storagetoprovidepeakingcapacity,resourcessuchasPVthatcauseloadpeakstobeshorterwillenableshorterdurationbatteries,whicharelessexpensive,todisplaceconventionalpeakingcapacity.

4,841MWh,

2019MW

10,385MWh,

4296MW

PVPenetration

0%PV

20%PV

Initially,lowlevelsofPVpenetrationmayflattentheloadcurve,reducingBESS’abilitytocost-effectivelyoffsettheneedforconventionalpeakingplants.6AthigherlevelsofsolarPVpenetration,however,thenetloadcurvebecomespeakier,increasingtheabilityandvalueofBESStoreducepeakdemand.Figure4illustrateshowincreasinglevelsofPVgenerationchangetheshapeofthenetload,causingittobecomepeakier.TheshadedareasaboveandunderthenetloadcurvesindicateBESScharginganddischarging,whilethetextboxesshowtheamountofnetloadpeakreduction(MW)andthetotalamountofenergymetbyBESSduringthenetloadpeak(MWh).

60,000

50,000

NetDemand(MW)

40,000

30,000

20,000

10,000

0

0 6 12 18 24

HourofDay

Figure4:ChangeinCalifornianetloadshapeduetoPV.

AdaptedfromDenholmandMargolis(2018)

WhatarethekeybarrierstoBESSdeployment?

Barrierstoenergystoragedeploymentcanbebroadlygroupedintothreedifferentcategories:regulatorybarriers,marketbarriers,anddataandanalysiscapabilities.

RegulatoryBarriers

LackofrulesandregulationstoclarifytheroleofBESS.Althoughstoragemaybetechnicallyabletoprovideessentialgridservices,ifnoregulationsorguidelinesexplicitlystatethatstoragecanprovidetheseservices,utilitiesandmarketoperatorsmaybeunwillingtoprocureservicesfromBESS.Furthermore,withoutaguaranteethatservicesprovidedbyaBESSprojectwill

becompensated,storagedevelopersandfinancinginstitutionsmaybeunwillingtomakethenecessarycapitalinvestments.FederalEnergyRegulatoryCommission(FERC)Order841addressedthisissueinU.S.wholesalemarketsanddirectedmarketoperatorstodeveloprulesgoverningstorage’sparticipationinenergy,capacity,andancillaryservicemarkets.Amongotherrequirements,therulesmustensureopenandequalaccesstothemarketforstoragesystems,takingintoconsiderationtheiruniqueoperatingandtechnicalcharacteristics(FERC2018).

Restrictionsorlackofclarityaroundifandhowstoragecanbeusedacrossgeneration,transmission,anddistributionroles.Thevarietyofdifferentservicesstoragecanprovideoftencutsacrossmultiplemarketsandcompensation

sources.Forinstance,frequencyregulationmaybecompensatedinawholesalemarket,buttransmissionordistributioninvestmentdeferralsmaybecompensatedasacostofservicebytheutilityorsystemoperator.Insomejurisdictions,providingservicesacrossdifferentcompensationsourcesisrestrictedbyregulation.Limitingtheservicesbatteriescanprovidebasedonwheretheserviceisprovidedorhowitiscompensatedcaninfluencehowoftentheyareutilizedandwhethertheyremainaneconomicinvestment(Bhatnagar2013).

MarketBarriers

Lackofmarketsforsystemservices.Alackofmarketsforservicesthatbatteriesareuniquelysuitedtoprovidecanmakeitdifficultfordeveloperstoincludethemaspotentialsourcesofincomewhenmakingabusinesscase,deterringinvestment.Forexample,inmostU.S.IndependentSystemOperator(ISO)

markets,generatorsarecurrentlyexpectedtoprovideinertialandgovernorresponseduringfrequencyexcursionswithoutmarketcompensation.AlthoughBESScanprovidethesameservices,currentlythereisnowayforBESStoseekmarketcompensationfordoingso.Furthermore,thepriceformationforaservicemayhaveevolvedforconventionalgenerators,meaningthepresence

ThisisdemonstratedbyDenholmandMargolis(2018)fortheCaliforniasystem.

ofbatteriesinthemarketcoulddistortprices,affectingstoragesystemsandconventionalgeneratorsalike(Bhatnagar2013).

Lackofdiscernmentinqualityandquantityofservicesprocured.Forsomeservices,suchasfrequencyregulation,thespeedandaccuracyoftheresponse