The Department of Energy issued a draft circular prescribing the policy for energy storage systems in the power industry.
It issued the draft circular in the wake of the influx of renewable energy plants which necessitates an enhancement of the ESS policy and regulation to ensure grid integration and stability.
“The DOE recognizes the applications and the benefits of ESS as an emerging technology in the improvement of the electric power system in accordance with the objective of ensuring the quality, reliability, security, and affordability of the supply of electric power,” the agency said.
ESS refers to a facility capable of absorbing energy generated from an renewable energy plant or from a generation facility connected to the grid or distribution system, and injecting stored energy when needed to ensure reliability and balanced power system.
ESS technologies include, but are not limited to battery energy storage system, compressed air energy storage, flywheel energy storage and pumped-storage hydropower.
Under the circular, proponents should apply and register their ESS as ancillary services where ESS may be used to support the transmission capacity and energy that are essential in maintaining power quality and the reliability of the Grid.
The ESS can also be registered to provide energy through bilateral supply contracts or trading in the Wholesale Electricity Spot Market, or the trading floor of electricity.
The DOE said generation companies could utilize ESS for selling power through contractor trading energy in the WESM. The ESS can also be registered to manage the variability of renewable energy.
Generation companies may integrate ESS in their VRE facilities to mitigate variable generation output and support the grid in maintaining power quality and reliability, it said.
The DOE said the ESS could also be registered as auxiliary Load management for generation companies.
It said ESS when integrated into the power system of a generation company could be used to augment supply needed during hours of high demand enabling higher energy dispatch.
The circular said ESS should operate within the framework of the power generation business whose facilities supply electricity or provide reliability services to the grid or the distribution system.
It will operate in the interest of achieving economic operation and maintenance of quality, stability, reliability and security of the transmission system.
It should also comply with the relevant laws and their implementing rules and regulations and issuances from the DOE, Energy Regulatory Commission and other agencies with authority over the grid’s reliability and supply security.
The circular also provides incentives for the integrated RE plant with ESS.
The DOE said energy stored and dispatched from the integrated RE plant with ESS should be considered renewable energy and should be eligible for incentives under the RE Act.
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