Roberts contends that tra-
ditional models for electric-
ity systems — based around
hourly intervals and delin-
eating only between genera-
tion versus demand — fail to
properly acknowledge, and
reward, energy storage con-
tributions to grids, such as
speed and accuracy in deliv-
ery of ancillary services. Fur-
ther, reliability and resilien-
cy — core attributes of energy
storage — aren’t refected by
revenue streams writ large.
“It’s hard to convince investors of business plans when
crucial factors like market
regulations and available revenue streams are likely to
change and evolve,” said Eller.
Successful Markets Pro-
Some isolated progressive
market models and fagship
projects have established
effective contexts in which to
reward the operating parameters of energy storage. These
models serve to demonstrate
feasibility and provide blueprints to a growing number
of international stakeholders
keenly aware of the advantages of storage for their own
In the U.S., PJM region’s
competitive market for frequency regulation is prime
example, according to Eller.
“Though it remained technology agnostic, the PJM market was
structured in a way that incentivized benefcial attributes of ener-
gy storage,” Eller said. “Success of the PJM market has inspired
the UK National Grid to adopt similar compensation structures.
We can expect that model to be further replicated in other areas.”
In the UK, the National Grid held its frst auction for frequency
regulation storage capacity in 2016 — indicative of healthy com-
petition, the 200 MW auction attracted over 1. 2 GW in bids.
According to Younicos’ Hiersemenzel, the C&I sector also
“If [transmission system operators] are smart, they will allow
smaller players and C&I customers to provide ancillary services,”
he said, adding “this will be valuable for the grid and provide an
additional revenue stream for the storage owner.”
Studying the Issue
In the U.S. a landmark Massachusetts energy storage report,
‘State of Charge’, outlines strategies to expand storage alongside a cost/beneft analysis of procuring 1. 7 GW of energy storage. The report claims that capacity, though costing between
$970 million and $1.35 billion, may yield $2.3 billion in system benefts to ratepayers, along with $1.1 billion in market
revenue to the resource owners.
In the EU, Victoria Gerus, policy offcer at the European Association for Storage of Energy pointed to the introduction of the
‘Clean Energy for all Europeans’ package.
“[At the end of November 2016] the European Commission
issued new market design legislative measures,” Gerus said.
“[The draft included] a defnition of energy storage; 2017 will
thus be an important year for advocacy, as the European Union’s
institutions negotiate and work to arrive at a common position
Creating market conditions conducive to energy storage being
fnancially viable is complex to be sure.
Roberts warns: “Paradigm shifting is not easy. It requires a
cultural shift. PJM is one of the most successful markets in the
world for energy storage – but it’s taken a lot of time and refne-
ment to get there.”
Still, Rome wasn’t built in a day. Working to expedite the
expansion of energy storage is a challenge of global signifcance,
but one that carries successes and lessons learned that would be
put to excellent use in being shared across borders. à