Key update on #EnergyStorage-as-transmission! @FERC accepted @misoenergy's "storage-as-transmission-only asset" (SATOA) proposal, subject to a further tariff filing by 9/24 elibrary.ferc.gov/IDMWS/common/o…
A thread on the issues in the order and some observations 1/
A thread on the issues in the order and some observations 1/
First, FERC approves the basic premise of MISO's SATOA, noting it as an extenstion of the Western Grid precedent that established storage-as-Tx. No real suprise there, other than that it re-affirms the distinction from NTAs 2/
FERC approves MISO's requirement only TOs may own SATOA, since MISO functional control depends on a Tx Owners Agreement; this seems to eliminate the possibility of a TO contracting for a SATOA asset, and thus would require non-TOs to become merchant TOs to offer SATOA 3/
FERC tells MISO to file clarifications that SATOA will only be evaluated for resolving non-routine reliability issues that cannot be addressed by market solutions, which reinforces the "unique capabilities" approach MISO proposed and seems to narrow the use-cases for SATOA 4/
FERC dismisses arguments that MISO SATOA is discriminatory toward non-TOs. Says that revisiting TO right-of-1st-refusal is out of scope and that "both SATOAs and NTAs will be considered appropriately" in Tx planning. FERC then says cost-recovery for NTAs is beyond scope 5/
Next, FERC accepts the use of operating guides to bound SATOA charge/discharge behavior, dismissing concerns about it being unproven. FERC stops short of requiring public terms, instead "encourages" public terms to give mkt participants predictability on SATOA charge/discharge 6/
FERC agrees that MISO should direct the use of SATOA & that a TO may manage SATOA state-of-charge to be "ready to serve" subject to an ops guide. FERC does order MISO to constrain SATOA buying/selling of energy only for charge/discharge needed to be "ready to serve" or used 7/
FERC dismisses concerns on energy market price impacts of SATOA, stating that eligibility criteria (i.e., only N-2+) & constrained operations are "unlikely" to impact real-time prices and thus adequately reduce risks. Impacts from emergency ops also not considered a concern. 8/
FERC also dismisses concerns about non-public Tx info being shared between a SATOA owner & its affiliated market rep, citing that MISO/TO retains operational control which its market participating entity does not affect, and that Stds of Conduct will apply to SATOA 9/
FERC orders accounting changes for SATOA to match Tx need and SATOA capacity, consistent with Order 784; in doing so dismisses concerns that SATOA may be oversized relative to Tx need. FERC generally sees oversizing concerns as premature, which leaves open challenges 10/
There's brief discussion of augmenting SATOA with storage for energy market use--creating dual-use storage-as-Tx. MISO says excess capacity will go through generator interconnection; FERC punts on how to allocate costs in this hypothetical (as it does for other dual-use Qs) 11/
FERC only conditionally accepts MISO's argument that its SATOA process does not interfere with generator interconnection, directing MISO to file a tariff that states SATOA will be allocated costs of any upgrades it causes for queued projects 12/
Onto some observations! First, there are many issues that FERC dismisses as premature. While some concerns are ruled out definitively, it seems like FERC leaves open challenges to this storage-as-Tx framework in the future, should some of those speculative issues arise 13/
While FERC does not want to pronounce on "dual-use" storage for both Tx and market services, FERC does make clear both explicitly and implicitly that generator interconnection will be a requirement for storage-as-Tx to become dual-use and participate in markets 14/
FERC's discussion of discrimination misses the inherent tension between saying (a) storage-as-Tx and storage-as-NTA can both be considered in Tx planning, and (b) that a ROFR and cost-recovery option applies only for the former 15/
The MISO NTA framework has not, to my knowledge, ever brought forward NTA solutions (tho someone correct me if I'm wrong!). Lack of ROFR and cost-recovery is a big disincentive to do so 16/
(As an aside, the recent FERC ruling dismissing arguments that Baseline Reliabity Projects should be subject to greater competition seems to indicate no changes in this framework anytime soon) 17/
FERC doesn't allow TOs to contract with non-TOs for SATOA, which is a missed oppt'y. This business model innovation could resolve the SATOA/NTA tension. Seems the TO Agreement framework could be modified to allow it. Now the only route for non-TOs is to become a merchant TO 18/
We at @storage_ESA do believe that the ability to propose, develop, own, operate, and receive fixed cost recovery for any storage-as-Tx solution should be open to any capable and, where appropriate, qualified industry participant energystorage.org/policy-stateme… 19/
All that said, #energystorage-as-transmission can and should move forward *with transparency*. The details of these novel Tx assets & operations should be as clear as practicable to all stakeholders to address some concerns FERC deems premature and build capability & trust 20/
A predilection to transparency could mean making operating agreements as public as possible; clearly demonstrating the match between Tx need & SATOA capacity; studying and reporting any effects on LBMPs; and other areas where information on storage-as-Tx is sparse 21/
One thing is certain--storage-as-Tx is the next frontier for the #energystorage value proposition. There are international examples already worth paying attention to, @kiranrak has details 22/
And I'm particularly eager to see longer-duration #energystorage technologies find a fit in transmission service, where they are likely to have a business case much earlier than for integrating high levels of renewables 23/
Also, a performance-based Tx incentive for enhancing existing transmission infrastructure would be useful to drive cost-saving solutions that include #energystorage 24/
As ever, the devil is in the details. The need for further refinements beyond FERC's order may eventually become clearer, and complementary developments in @pjminterconnect @SPPorg are likely to be informed by this Order. Possible a FERC rulemaking may ultimately be needed 25/
And if someone does decide to uncork the Order 1000 genie, certainly improvements to the the NTA framework could be a useful part of the discussion too 26/
I'd be remiss on not stating that storage-as-transmission is just one of the exciting business developments for #energystorage you can get the latest on at #ESACon20, the biggest baddest storage industry gathering Aug 24-27 - register today!! esacon.org/ESACon20-Promo…
CODA: Commissioner Danly dissented on the order: "MISO’s filing would eliminate the distinction between generation and
transmission facilities based on function, and instead define transmission facilities based on the service provided." 28/
transmission facilities based on function, and instead define transmission facilities based on the service provided." 28/
Cmr. Danly presents an objection that the Order errs in distinguishing between Tx & gen by *service* rather than by *function,* noting that storage injections are generation functions 29/
Cmr. Danly then concludes "More of an explanation is required for why
discrimination between similarly situated parties is not undue," echoing the concerns of many non-TOs capable of providing storage 30/
discrimination between similarly situated parties is not undue," echoing the concerns of many non-TOs capable of providing storage 30/
Indeed, this is the aforementioned SATOA/NTA tension. But the remedy may not be to move away from defining services and back to functions (which eliminates storage-as-Tx), but perhaps to improve processes associated with competitive provision of storage-as-transmission FIN/
