Newsletter: FERC Vote is Step Forward for Storage Participation in Wholesale Market, Bids Set Low Prices for Renewable-Plus Storage

This storage newsletter was originally published on March 2, 2018.

FERC Vote is a “Significant Step” Towards Wholesale Market Participation for Storage

The Federal Energy Regulatory Commission (FERC) took a unanimous vote to allow energy storage and other distributed energy resources to play into wholesale markets. The action has been hailed as a “significant step” forward by the industry.

The 5-0 vote was on Item E-1, a draft ‘Final Rule on Electric Storage Resource Participation in Markets Operated by Regional Transmission Organizations, or RTOs, and Independent System Operators, or ISOs’. The rule sets out frameworks for electricity storage companies to participate in capacity, energy and ancillary services markets operated by RTOs and ISOs.

The battle is not over though: FERC will hold a technical conference in April to gather information on potential reforms to the way distributed energy resources can be aggregated on electricity networks. RTOs and ISOs will have to establish models for storage to participate in the wholesale markets of their service territories.


Xcel Energy Bids Set ‘Unprecedented’ Low Prices For Solar and Wind Plus Storage

Xcel Energy set a record low price for the combination of renewable energy and storage after attracting a median solar-plus-storage price of $36 per megawatt-hour. The rate is 20% lower than the cheapest PV-plus-battery power-purchase agreement seen to date.

Median wind-plus-storage bids were even lower, at $21 per megawatt-hour.

These prices also come in well below the unsubsidized levelized cost of energy (LCOE) for wind and solar published by Lazard last November. 

GTM Research reports that this price drop signifies that Xcel Energy’s bidders are expecting significant solar, wind and battery cost reductions between now and when the projects are due to go online, in 2023.


Storage Newsclips

In Michigan
  • The Michigan Public Service Commission’s Utility Energy Waste Reduction Programs report noted that Michigan utility providers met a combined average of 128% of their electric energy savings targets and 125% of their natural gas energy savings targets in 2016. EWR programs saved more than 1.19 million megawatt hours of electricity and more than 5.24 billion cubic feet of natural gas. The report found that EWR resources cost $16.07 per megawatt hour, while generating power at a new natural gas combined cycle plant costs about $55 per megawatt hour. The report concluded that these programs delay the need for utilities to build new generation, reduce emissions, save hundreds of millions of dollars to import fuel to Michigan, and create demand for jobs and equipment that cut energy use, all costs which otherwise would be recovered in utility rates.
  • Consumers Energy announced plans to generate 40% of its electricity from renewables and storage by 2040. This comes after DTE announced a similar commitment last year.
Across the Country
  • New research suggests that battery storage may increase carbon emissions in parts of the country by increasing coal consumption.
  • According to The Brattle Group, the U.S. market for energy storage could reach 50,000 megawatts if battery prices keep declining and policies continue to be favorable.
  • A study published in Energy & Environmental Science determined that solar and wind energy alone could reliably meet about 80 percent of recent U.S. annual electricity demand, but massive investments in energy storage and transmission would be needed to avoid major blackouts.
  • More homeowners are considering solar-plus-storage in light of recent natural disasters as a way to boost resiliency, and that could hurt utilities.
  • In remote areas of Puerto Rico, interest in disconnecting from the grid by installing solar-plus-storage is on the rise.
  • Utility companies across the country are increasing their reliance on solar energy and batteries, which could edge out natural gas in power markets.
  • Solar module-level power electronics maker SolarEdge is pairing with a prominent player in the solar battery space, PetersenDean Roofing & Solar, creating a more affordable renewable energy option for customers.
  • Tesla plans to triple battery deployments this year, but its solar business is seeing quarter over quarter declines.
  • This year’s UK Energy Storage Summit featured discussions on policy, regulations, and strategy, PPAs and financing storage projects, and new technology.
  • The outlook for energy storage in New York City is bright.
  • AES and KIUC break ground on Hawaii’s largest solar-plus-storage system.
  • A new study analyzes the value provided by solar + storage systems during grid outages: “Valuing resilience can make PV and energy storage systems economical in cases when they would not be otherwise.”
  • Greentech Media releases a roundup of “the hottest grid storage projects” of 2018.
  • A decision from the Texas Public Utilities Commission shines light on regulatory challenges around energy storage.
  • A breakthrough in storage technology could increase EV range and reduce charge time.