Specific policies supported by AWEA and ESA include:
1. Wholesale energy markets and ancillary services markets and should be created and expanded, and barriers to entry into those markets eliminated.
2. Market and operating rules should be based around the type of service needed, and any technology that is able to reliably provide a needed service should be able to provide it. In many cases previously bundled services should be disaggregated.
3. Low cost grid operating reforms that will create more competition and make the grid operate more efficiently, such as greater balancing area coordination and faster generator dispatch intervals, should be implemented as soon as possible.
AWEA and ESA agree that common misconceptions about renewable energy and energy storage technologies should be corrected:
1. Energy storage provides many benefits to the power system, and the benefits associated with facilitating the integration of renewable energy are just one benefit of many. In regions with significant baseload generation, energy storage has been effectively used for decades to arbitrage power from periods of low demand to high, to provide the flexible response and load-following capability that the power system needs but that the baseload plants are unable to provide, and to provide capacity to meet peak electric demand. A major but often overlooked benefit of energy storage is in providing valuable ancillary services. Energy storage can also provide significant value in the form of making the transmission and distribution system operate more reliably and efficiently.
2. The power system aggregates many different sources of variability and uncertainty, and grid operators are only concerned with managing the aggregate power system variability, not the variability of any one component. Many types of variability are canceled out by opposite changes in other sources of variability, such as when wind energy output and electricity demand increase or decrease at the same time. As a result, variability is most efficiently addressed at the power system level, rather than at the source of the variability. Flexible resources like storage should be deployed where they can provide the most value to the power system at the least cost, which in many cases will be somewhere other than at a generating plant.
3. Large amounts of wind energy are being reliably and cost-effectively integrated onto the power system today, and with the simple cost-effective grid operating reforms outlined above that amount can be increased many times over. It is misguided to speak of some limit to the amount of wind energy that can be reliably integrated on the power system, with or without energy storage. As explained above, there is already a large amount of variability and uncertainty on the power system today, chiefly caused by variability in electric demand as well as the unexpected outages of large conventional power plants. Adding wind energy to the grid simply causes a small marginal increase in aggregate power system variability, and thus in the demand for and use of the tools that grid operators have always employed to accommodate variability and uncertainty, such as power markets, reserve sharing pools, conventional power plants, wind and load forecasting, demand response resources, and energy storage. As explained above, the choice among these tools should be a market-based decision, to ensure that the cost of integrating any resource with the grid, whether a wind farm or a fossil or nuclear plant that requires expensive fast-acting contingency reserves, is kept to a minimum.
Due to significant technological advancement in recent years, wind energy and energy storage technologies now each have excellent technical ability to provide the ancillary services that are needed to make the power system operate reliably and efficiently. While these ancillary services – such as frequency response, voltage control, reactive power output, and frequency regulation – are less visible than the energy and capacity power system issues that most people are more familiar with, they are equally if not more important.
In some cases, renewable energy resources and energy storage resources are each able to provide these ancillary services more cost-effectively and with less environmental impact than the conventional generating resources that are used today. Both storage and renewable resources can respond faster and more accurately to frequency fluctuations and system operator commands than conventional resources. NERC and FERC have both highlighted the abilities of wind energy and energy storage to provide these ancillary services. However, in many regions of the country, obsolete market and operating rules prevent these clean technologies from providing these services. Because ancillary services benefit all users of the power system, today the cost of providing these services is typically broadly allocated to all users of the power system, and future allocations of these costs should also be done in a way that maintains a level playing field for all resources.
Enacting the policies outlined above will bring more competition to the power system, reducing consumers’ electricity costs, increasing our energy security, decreasing harmful emissions, and improving power system reliability.
