An Enormous Step Forward for Energy Storage

In our last briefing, we talked about the importance of energy storage solutions in the transition to a cleaner energy future.

A landmark decision in this direction was achieved last week : US courts upheld Order 841 from the Federal Energy Regulatory Committee (FERC), allowing distributed energy storage resources to compete in and provide grid services to wholesale markets as if they were generation assets. The FERC chairman is calling this “the single most important act we could take to ensure a smooth transition to a new clean energy future”.

What exactly does this imply? In layman’s terms, this opens the door for energy storage to be compensated for the full range of services they provide to the grid, even those beyond storage. The decision would also allow homes and businesses with behind-the-meter assets to be compensated for their role in grid resiliency and is likely to accelerate the deployment of intermittent clean energy assets, such as solar arrays and wind farms.

In many cases, storage assets were technically capable of providing grid services at competitive rates but were not allowed to do so, given federal regulations. Access to additional revenue streams will indisputably improve economics of ownership for homes and businesses, therefore contributing to the proliferation of storage, which is key to utilizing solar and wind power when it is needed most, rather than only when the sun is shining or the wind is blowing.

In the US, 2019 was a record-breaking year for utility-scale and behind-the-meter deployments. While the advent of COVID-19 could cause a blip in this growth, we believe that continued cost declines, performance improvements, grid modernization plans and government commitments to clean energy (as discussed in this post) will sustain the momentum.

Author: Chanel Damphousse, Principal @ MacKinnon, Bennett & Company Inc.

Image: Petmal via iStock

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