Energy Storage Feedback and
Next Steps
Market Subcommittee
March 1, 2016
Overview
Purpose of today’s discussion
• Provide stakeholders with a summary of feedback
received from January 5th Energy Storage Workshop
• Discuss next steps
• Request feedback on MISO-proposed timeline and work
plan
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Summary of Stakeholder Feedback
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Key Areas/Issues for Consideration
• Classification of resources/assets
– Examples
• Generation/transmission asset, LMRs, non-transmission alternatives, non-generating
resources similar to CAISO or new resource types
• Tariff and BPM considerations
– Examples
• Use Limited Resource, SER, DRR2, LMRs, Generators
• New market design enhancements and tools
– Examples
• 2nd AGC, elimination of barriers including min. size requirement, manage state of charge
• Market compensation
– Examples
• Pay for performance, fast ramp cost recovery, flexibility to choose cost recovery
mechanisms, station power
• Long-term resource adequacy considerations
– Examples
• Should be examined periodically, if reliability issues surface, or as penetration increases.
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Tariff & BPM Considerations
Stakeholder Comments
MISO Response
• MISO should develop “Asset Evaluation criteria and build off its “Use Limited
Resource” (ULR); add Tariff language for an “initial asset evaluation” that would
determine if the resource were treated as a generator/load or a transmission asset.
• MISO is reviewing
stakeholder feedback and
evaluating the benefits of
near-term tariff adjustments
to resource definitions,
including new definitions
that would facilitate more
efficient and flexible market
participation for energy
storage resources.
• Create a new class of assets, not use existing definitions. In the near term, MISO
should classify an energy storage resource as generation, transmission, or load
based on the primary service the resource provides. Should adopt FERCapproved NGR like CAISO.
• Recommends a fully vetted approach to tariff changes, noting changes can be
incremental.
• While the definitions are adequate in general, they are too prescriptive regarding
market products that the resources are eligible to provide.
• MISO will also develop plan
to work with internal and
external parties to address
more complex issues .
• MISO does not have tariff language in Attachment FF addressing energy storage
as a reliability asset. MISO should develop tariff provisions in Attachment FF that
allow for consideration of energy storage similar to its provisions for demand
response, energy efficiency, and generation
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Classification of Energy Storage Resources/Assets
Stakeholder Comments
MISO Response
• Energy storage resources may be classified as generation, transmission or other,
depending upon its characteristics.
• MISO does not seek to restrict
asset owners’ flexibility or
decisions regarding their own
resources; rather, our goal is to
remain technology neutral and
create a transparent path
forward for generation and
transmission assets under
ongoing FERC guidance.
MISO does believe that the
transmission planning process
is a critical element for study
and evaluation of all
transmission assets.
• Should consider energy storage as transmission assets in the MTEP process.
• Classification is up to FERC and the States to dictate
• Flexibility- asset owners should choose which classification based upon capability to
provide service(s).
• Initially, energy storage can be generation resources; not opposed to energy
storage as a transmission asset, with the expectation of recovering revenue
requirements under the MISO transmission settlements process requires
submission of the project to address a transmission problem, subject to the normal
transmission planning modeling and approval process
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Market Compensation
Stakeholder Comments
MISO Response
• Anything that addresses a specific reliability issue should go through
MTEP, designated as a transmission asset and receive no compensation
for capacity, energy, and ancillary services in the market.
• MISO recognizes the importance of
evaluating market compensation and
settlement issues efficiently. MISO
implemented pay-for-performance in
2012 to comply with FERC Order 755.
Some of the further improvement
opportunities have already been
identified and prioritized through the
Market Roadmap process which we
believe will yield the appropriate lead
time for development.
• Any compensation should not advantage a vertically integrated utility over
an IPP. Rather, MISO should implement pay for performance with a
bifurcated AGC signal, similar to PJM.
• MISO should ensure flexibility to choose revenue and cost recovery
mechanisms;
• FERC has already defined pay for performance for fast ramp resources
which should be implemented.
• Resources that have better performance, faster reaction times, greater
flexibility, higher reliability and greater ability to provide functions needed
by MISO should receive greater total compensation. Compensation and
pricing follow the value resources provide to the system.
• In terms of resource neutrality, energy used for charging storage should be
treated analogously to station power used by traditional generators.
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Market Design Enhancements & Tools
Stakeholder Comments
MISO Response
• Move forward with development of the 2nd AGC and pair with economic incentive
pricing.
• MISO has developed the
economic incentive pricing
for better and faster
regulation service with
• Eliminate market barriers such as the 5 MW minimum standard for market
regulation mileage MCP and
participation.
performance based
compensation. MISO
supports additional market
• Existing market products are adequate. Might examine the economic dispatch
enhancement concepts and
process to recognize the benefits that certain types of energy storage devices can
believes that they can be
provide.
prioritized over the mid-term
with the appropriate lead time
and evaluation of internal
resources.
• Prevent minimum capacity and aggregation barriers from limiting energy storage
market participation- 1 MW limit on SERs and examine currently existing limits to
the aggregation of SERs to the EPNode level. This limitation is more restrictive
than the CPNode aggregation limit placed on DR resources, which the Demand
Response Working Group (DRWG) has been pushing to eliminate.
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Long-term Resource Adequacy Issues
Stakeholder Comments
MISO Response
• Long term resource adequacy should be periodically reviewed and resource
requirements revised as necessary for reliability. Periodic review of long term
resource adequacy will allow MISO to resolve any concerns with storage devices if
their penetration increases.
• MISO concurs with this
concept and supports further
examination of resource
adequacy issues as part of a
more fully developed energy
storage strategy.
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Discussion of Next Steps
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Review of Market Roadmap Vision and Guiding
Principals
Market Vision
• Foster wholesale electric markets that deliver reliable and economically
efficient outcomes.
Guiding principles
• Support an economically efficient wholesale market system that minimizes
cost to serve load.
• Facilitate non-discriminatory market participation regardless of resource type,
business model, sector or regional location.
• Develop transparent market prices reflective of marginal system cost, and
cost allocation reflective of cost-causation and service beneficiaries.
• Support Market Participants in making efficient operational and investment
decisions.
• Maximize alignment of market requirements with reliability requirements of the
system.
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Phase-In Approach for Energy Storage
Goal- Prioritize initiatives while balancing costs and
benefits
• Near-term
– Relatively straight forward and low cost items
• Require minor tariff and BPM clarification, and minimum system
changes
• Provide clear picture of how storage can participate in the near term
• Medium-term
– Items that have been prioritized through market roadmap
– Tie to other on-going initiatives and stakeholder discussions
• Long-term:
– Items involving complexity
• Requiring broader regulatory or stakeholder discussion, or greater
investment
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Proposal of Near-term Adjustments
(2016- early 2017)
Clarification of the process for different types of participation
• Generation resource or transmission asset
• Participation in the capacity and/or Energy and Ancillary Service (AS) markets
Capacity market tariff and BPM clarification and minor adjustment
• Clarify functional requirements and set eligibility based on requirement instead of resource type
• Examples• How to allow 4-hour storage to offer capacity while participating as SER in the regulation market?
• How can behind meter storage participate as LMR, DRR or EDR (e.g., state of charge
requirement, discharging or charging capacity)?
Energy and Ancillary Service market clarification and minor adjustment
• Clarify how medium term storage (behind meter or in-front-of meter) can fit into existing resource
definition and market clearing software
• Examples
• Evaluate and define a new resource type to be dispatched similar to DRR-type II (i.e., to the
negative MW range), but settled differently.
Proposed timeline:
• Work with stakeholders on tariff and BPM clarification or potential minor revision from April to July
2016
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Medium-term considerations and potential projects
Mid-2017 forward
Items on the market enhancement roadmap that may impact
storage
•
•
•
•
•
•
•
•
AGC Enhancement for Fast Ramping Resources (high priority on market roadmap)
5-minute Settlement for Generation Schedules (high)
Pricing for VLR commitment (high)
Minimum MW Participation Limit (medium)
Aggregate load to meet minimum participation limit (low)
Cross-LBA DR participation (low)
Incentive for frequency response service (low)
Look ahead commitment-phase II (low)
Tie to other on-going initiatives and stakeholder discussions
• Market clearing software performance
• Other initiatives, e.g., non-transmission alternative and resource adequacy
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Longer-term considerations (2017-2019)
Start to develop processes and plans to address complex issues from 2016
• Clarify cross-functional needs and practical implication
• Identify the people and processes
• Leverage appropriate resources at MISO
Sample issues:
• Designation of transmission and generation assets: treatment of dual use
• Regulatory policy issue and link to non-transmission alternative discussion at Planning
Subcommittee
• Long term planning consideration of storage
• Resource adequacy
• Impact on generation interconnection and MTEP studies
• Energy and AS market impact
• Tariff and software design to be more functional orientated
• How to incorporate resource physical constraints at the same time?
• Managing state of the charge
• Software enhancement and impact on performance
• Consideration of storage constraints in SCUC and SCED
• Potential need for Look ahead dispatch
• Settlement issues
• Net energy, treatment of energy for charging, make whole payment, cost allocation, etc.
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Feedback on proposed work plan and
timeline due by Friday March 18th
Yonghong Chen [email protected]
and Jennifer Richardson [email protected]
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Contact Information
• Yonghong Chen
[email protected]
• Jennifer Richardson
[email protected]
• Jeff Bladen
[email protected]
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