Thread by @jburwen

When I said this was HUGE, it might not be obvious to even the rarefied air of #energytwitter why I'm so amped about @FERC approval of @pjminterconnect capacity accreditation reforms for #energystorage.

Allow me to explain... (thread alert!) 1/

https://twitter.com/jburwen/status/1422298524381765635

@FERC @pjminterconnect First, grid operators can now compare how #energystorage contributes to power system reliability on an apples-to-apples basis with fuel-based generation. It's a definitive statement that "yes, storage can be counted on for reliability" and answers analytically how much 2/

Every supply resource has its own constraints for providing power system reliability. Fuel-based generators break down or have fuel constraints. Wind & solar output depends on weather. Demand response can vary with customer behavior/fatigue. #energystorage has output limits. 3/

A framework that allows comparing resources in a "reliability-neutral" manner is critical to avoid locking in fuel-based generation. PJM's ELCC framework goes a long way there--specifically opening the door to #energystorage--though it could go further

https://twitter.com/jburwen/status/1407337475098517510

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Second, this is important because #energystorage can displace fuel-based generation for providing power system reliability. If we are going to decarbonize our grid, we can't keep relying on gas generation for backup--storage and demand response have to play a much larger role 5/

Our study with @NRDC in 2019 and policy brief summarizes why getting this right is so important bit.ly/2nsk7w5

Hybrid storage + renewables will particularly benefit, with reliability value much closer to 100% of their interconnection service level 6/

Fourth, this should provide an economic basis for some #energystorage now out of the market, driving sorely-needed deployments in PJM and making it easier for states like NJ & VA to meet storage & clean energy targets bit.ly/3aI9pV6 7/

Moreover, the financing of #energystorage will improve significantly when a forward payment can be locked in. This is key; capacity markets bias toward opex-driven resources (i.e. burning fuel), as @jacob_mays has noted. Storage is mostly capex, so forward payments = big deal 8/

It also opens a new economic opportunity for augmentation of storage over time. Adding MW leads to planning studies. Adding MWh duration should not. ELCC frameworks will keep up w/ duration changes even without capacity changes, allowing faster adaptation as supply mix changes 9/

Fifth, this has been a looooooooong time coming.

2015: FERC panel on changes needed for #energystorage, where we talked capacity valuation reform

2016: PJM describes its capacity market route for storage

2017: we asked for capacity valuation reforms in rulemaking

10/

2018: Order 841 was issued requiring removal of barriers to storage in capacity markets

2019: we contested PJM's 10-hr rule, FERC agreed

2020: PJM's stakeholder process to develop ELCC framework

2021: FERC approval of #energystorage capacity valuation reforms

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Which is to say, power sector regulatory updates take a long time! If you are getting into this space as a young person, begin thinking in 5- and 10-year timeframes. Saddle up for the long haul. 12/

Big shout outs here. @NRDCTom was brains of pre-841 work. @CustomizedES developed details that became Order 841. @NergyStorageLaw @kdcarden convinced FERC that PJM 10-hr rule couldnt stand. Andrew Levitt moved PJM ahead on ELCC. @EnergyBetty herded a coalition to work on it 13/

Much to be done still. Revisiting system reliability construct is key. You only see value in #energystorage if there is a chronological view in the reliability modeling & analysis. ELCC begins that path. Derek Steclik and @EnergySystemsIG have more

https://twitter.com/EnergySystemsIG/status/1334862081364008961

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And a challenge is forming already: the separate dissenting & concurring statements in FERC's order lodge a critique at PJM's ELCC framework for using average values instead of marginal values. Wonky, for another time. But this ain't over. (Again, long time frames for change) 15/

Anyway, I'm proud of the work we've done at @storage_ESA to make progress here. Changing power systems to take advantage of the flexibility of #energystorage will catalyze many developments of the larger regulatory & market framework we need for 100% clean energy. Onward. /end

@CustomizedES @NergyStorageLaw @Kdcarden @EnergyBetty Argh this should be credit to @NrdcTomr!!!! The single smartest RTO head I've ever had the pleasure to work with.