United States: FERC Issues Key Rulemakings On Energy Storage

Summary of FERC NOPR in Docket Nos. RM16-6 (Essential Reliability Services and the Evolving Bulk-Power System—Primary Frequency Response) and RM16-23/AD16-20 (Electric Storage Participation in Markets Operated by Regional Transmission
Organizations and Independent System Operators)

November 17, 2016

Docket No. RM16-6

Overview

• FERC proposes to revise the pro forma Large Generator Interconnection Agreement ("LGIA") and the pro forma Small Generator Interconnection Agreement ("SGIA") to require all newly interconnecting large and small generating facilities, both synchronous and non-synchronous, to install and enable primary frequency response capability as a condition of interconnection.
• Specifically, FERC proposes to amend its pro forma LGIA and pro forma SGIA to include the following: (1) requirements for new generating facilities to install, maintain, and operate equipment capable of providing primary frequency response as a condition of interconnection; (2) requirements for governor or equivalent controls to be operated, at a minimum, within maximum 5 percent droop and ±0.036 Hz deadband settings; (3) requirements to ensure the timely and sustained response to frequency deviations, including provisions to prevent plant-level (i.e., outer-loop) control equipment from inhibiting primary frequency response and resulting in premature withdrawal; and (4) a requirement for droop parameters to be based on nameplate capability with a linear operating range of 59 to 61 Hz.
• FERC also proposes to prohibit generating facilities from inhibiting primary frequency response capability.
• FERC does not propose to impose a generic headroom requirement or subject newly interconnecting nuclear generating facilities to the new requirements.
• Comments are due 60 days after publication in the Federal Register.

Summary of Key Passages

Proposed Amendments to pro forma LGIA and pro forma SGIA

• FERC proposes to revise existing sections 9.6 and 9.6.2.1 of the pro forma LGIA and to include proposed new sections 9.6.4, 9.6.4.1, 9.6.4.2, and 9.6.4.3. Similarly, the Commission proposes to revise existing section 1.8 of the pro forma SGIA and add proposed new sections 1.8.4, 1.8.4.1, 1.8.4.1.1, 1.8.4.1.2, and 1.8.4.1.3.
• FERC proposes revisions to the pro forma LGIA and pro forma SGIA that would require new large and small generating facilities to install, maintain, and operate a functioning governor or equivalent controls, which FERC proposes to define as the required hardware and/or software that provides frequency responsive real power control with the ability to sense changes in system frequency and autonomously adjust the generating facility's real power output in accordance with the proposed maximum droop and deadband parameters and in the direction needed to correct frequency deviations.
• FERC proposes to require new large and small generating facilities to install, maintain and operate governor or equivalent controls with the ability to operate with a maximum 5 percent droop and ±0.036 Hz deadband parameter, consistent with NERC's recommended guidance.
• FERC proposes to require new generating facilities that respond to frequency deviations to not inhibit primary frequency response, such as by coordinating plant-level, outer-loop control equipment with the governor or equivalent controls, except under certain operational constraints including, but not limited to, ambient temperature limitations, outages of mechanical equipment, or regulatory requirements. FERC also proposes to require new generating facilities to respond to frequency deviations without undue delay and to sustain the response until at least system frequency returns to a stable value within the governor's deadband setting.
• Regarding droop settings, FERC proposes to require the droop parameter to be based on the nameplate capability of the unit and linear in operating range between 59 to 61 Hz.
• FERC's proposed revisions to the pro forma LGIA and pro forma SGIA would apply to new generating facilities that execute or request the unexecuted filing of interconnection agreements on or after the effective date of any Final Rule in Docket No. RM16-6.
• FERC's proposed revisions would also apply the requirements to any large or small generating facility that has an executed or has requested the filing of an unexecuted LGIA or SGIA as of the effective date of any Final Rule in Docket No. RM16-6-000, but that takes any action that requires the submission of a new interconnection request that results in the filing of an executed or unexecuted interconnection agreement on or after the effective date of any Final Rule in Docket No. RM16-6-000.

Clarification on No Headroom Requirement

• FERC clarifies that nothing in these proposed reforms will impose a generic headroom requirement for new generating facilities or affect the unit commitment and dispatch decisions of balancing authorities. Therefore, if a generating facility that is subject to these proposed requirements has been dispatched by its balancing authority to a set-point at which there is no available operating range to increase or decrease its output in response to frequency deviations, it would not be in violation of the proposed requirements in regards to providing sustained response.

Comment Procedures

• FERC seeks comments on all matters and issues proposed to be adopted, including any related matters or alternative proposals that commenters may wish to discuss.
• Comments are due 60 days after publication in the Federal Register.

Docket Nos. RM16-23; AD16-20

Overview

• FERC proposes to require each Regional Transmission Organization and Independent System Operator ("RTO/ISO") to address barriers to participation of electric storage resources in the organized wholesale electric markets. For the purposes of the NOPR, FERC defines an electric storage resource as a resource capable of receiving electric energy from the grid and storing it for later injection of electricity back to the grid regardless of where the resource is located on the electrical system.
• FERC proposes to amend its regulations under the Federal Power Act to require each RTO/ISO to revise its tariff to: (1) establish a participation model consisting of market rules that, recognizing the physical and operational characteristics of electric storage resources, accommodates their participation in the organized wholesale electric markets; and (2) define distributed energy resource aggregators as a type of market participant that can participate in the organized wholesale electric markets under the participation model that best accommodates the physical and operational characteristics of its distributed energy resource aggregation.
• Comments are due 60 days after publication in the Federal Register.

Summary of Key Passages

Proposed Requirements Related to RTO/ISO Participation Models

• FERC proposes to require each RTO/ISO to revise its tariff to establish a participation model consisting of market rules that, recognizing the physical and operational characteristics of electric storage resources, accommodates their participation in the organized wholesale electric markets. FERC defines a participation model as a set of tariff provisions that accommodate the participation of resources with particular physical and operational characteristics in the organized wholesale electric markets of the RTOs and ISOs. FERC explained that, given the unique attributes of electric storage resources, establishing a participation model consisting of market rules that acknowledge their unique attributes will enable them to effectively participate in the organized wholesale electric markets.
• FERC explains that electric storage resources include all types of electric storage technologies, regardless of their size, storage medium (e.g., batteries, flywheels, compressed air, pumped-hydro, etc.), or whether located on the interstate grid or on a distribution system.
• FERC proposes that each RTO/ISO's participation model must (1) ensure that electric storage resources are eligible to provide all capacity, energy and ancillary services that they are technically capable of providing in the organized wholesale electric markets; (2) incorporate bidding parameters that reflect and account for the physical and operational characteristics of electric storage resources; (3) ensure that electric storage resources can be dispatched and can set the wholesale market clearing price as both a wholesale seller and wholesale buyer consistent with existing market rules that govern when a resource can set the wholesale price; (4) establish a minimum size requirement for participation in the organized wholesale electric markets that does not exceed 100 kW; and (5) specify that the sale of energy from the organized wholesale electric markets to an electric storage resource that the resource then resells back to those markets must be at the wholesale locational marginal price.

Proposed Requirements Related to Distributed Energy Aggregation

• FERC proposes to require each RTO/ISO to revise its tariff to allow distributed energy resource aggregators, including electric storage resources, to participate directly in the organized wholesale electric markets. Specifically, FERC proposes to require each RTO/ISO to establish distributed energy resource aggregators as a type of market participant and allow the distributed energy resource aggregators to register distributed energy resource aggregations under the participation model in the RTO/ISO tariff that best accommodates the physical and operational characteristics of the distributed energy resource aggregation.
• FERC also proposes to require that each RTO/ISO, in order to accommodate the participation of distributed energy resource aggregations in the organized wholesale electric markets, establish market rules on: (1) eligibility to participate in the organized wholesale electric markets through a distributed energy resource aggregator; (2) locational requirements for distributed energy resource aggregations; (3) distribution factors and bidding parameters for distributed energy resource aggregations; (4) information and data requirements for distributed energy resource aggregations; (5) modifications to the list of resources in a distributed energy resource aggregation; (6) metering and telemetry system requirements for distributed energy resource aggregations; (7) coordination between the RTO/ISO, distributed energy resource aggregator, and the distribution utility; and (8) market participation agreements for distributed energy resource aggregators.

Comment Procedures

• FERC seeks comments on all matters and issues proposed to be adopted, including any related matters or alternative proposals that commenters may wish to discuss.
• Comments are due 60 days after publication in the Federal Register.

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