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Batteries, or at least the markets intended to promote them, are saving the PJM Interconnection LLC money, an official for the RTO said during a recent interview.
In order to comply with FERC Order 755, RTOs are implementing new regulation market rules that reward participants both for how much energy they sell into those markets and for the speed and accuracy of their answers to signals.
While the rule changes are aimed at rewarding advanced storage, including batteries and flywheels, for their ability to provide regulation services quickly, they also have created incentives for other generators to improve their performance, said Scott Baker, a senior business solutions analyst for PJM. Thus, while regulation service prices rose under the new rules, better performance meant that PJM had to buy fewer megawatts of that service. "We're paying resources more, but buying less and, on net, saving consumers money," Baker said.
Energy storage is becoming an increasingly important part of the grid, enabling homeowners to store solar-provided power for use during blackouts, universities and hospitals to keep the power flowing in an emergency, and grid managers to run their systems more efficiently. But battery and flywheel developers face skepticism from utility executives and industry observers who believe that the systems are too costly to run commercially.
PJM was one of the first RTOs to interconnect large-scale energy storage to its grid when AES Energy Storage LLC, a subsidiary of AES Corp., energized the 32-MW Laurel Mountain battery in 2011. That plant has been followed by flywheels and more batteries, all looking to participate in PJM's regulation market.
"Regulation has a...