FERC inadvertently clears path for renewable energy via storage 2018-02-15

FERC just let slip the wolves of sun and wind by enabling the storage that those sunny twenty-first-century “aggregated distributed energy resources” (DER) will use to blow down the straw houses of traditional twentieth-century so-called baseload capacity coal, oil, and nuclear power plants.

FERC Commissioner Robert F. Powelson called out the “participation model” Thursday’s twin orders enable, bypassing many traditional charges by accounting for physical characteristics that do not change over time, recognizing that batteries, sun, and wind power are basically different from old-style dinosaur power plants. Commissioner Neil Chatterjee named Senators Ed Markey and Sheldon Whitehouse as proponents of these new rules, which is very interesting since both have long been proponents of renewable energy, and Sen. Whitehouse called out FERC for failing to implement the DC Circuit Court’s Order on greenhouse gases. Commissioner Cheryl A. LaFleur said “Electric storage is like a ‘Swiss army knife’”. Maybe more like the South Australian storage utility player that has already out-responded natural gas during coal plant outages. Commissioner Richard Glick says sun and wind power “no less than energy storage, have the potential to play a leading role in the electric grid of the future”. None of the Commissioners could bring themselves to say what they all know: sun, wind, water power with storage will be the electric grid of the future. Former FERC Chair Jon Wellinghoff and I were right in 2013: solar power will provide more U.S. electricity than any other source by 2023, on the way to complete conversion of everything to sun, wind, water, and storage by 2050.

Frequency response of Tesla South Australian battery
Giles Parkinson, Reneweconomy, 23 January 2018, Tesla big battery moves from show-boating to money-making.

Gavin Bade, UtilityDive, Feb. 15, 2018, FERC issues storage, reliability orders, calls conference on aggregated DERs,

  • FERC directed regional grid operators to devise new tariffs for storage market participation that allow the resources to provide multiple electricity market services, as well as set power market prices as purchasers and sellers of energy. The commission could not settle on similar directives for DER aggregations, however, and called a technical conference for April 10-11.
  • FERC also issued rules that require new generation resources, including renewables, to provide frequency response services. Nuclear and combined heat and power (CHP) resources are excluded from the order.

Apparently some FERC staffers may realize the energy mix is changing as rapidly and irrevocably as from horses and buggies to electric cars:

“Participation [of storage] in the energy markets as a buyer and seller can reduce stress on the system by both shifting load away from peak conditions and reducing overgeneration during low load conditions,” staff said during the open meeting. “Electric storage resources are also well suited to provide services like frequency regulation and ramping services, which are a first resort on correcting system frequency and helping to avoid contingency events.”

Additionally, the order would allow storage to provide black-start and reactive power services, “which are critical to bringing the bulk power system back online” after an outage.


Maybe those FERC staffers have been reading the news from Australia. Brian Fung, The Independent, Dec. 28, 2017, Tesla’s new mega-battery in Australia reacts to outages in ‘record’ time: One of Australia’s biggest power plants suffered a drop in output—the new battery kicked in just 0.14 seconds later.

…In the past three weeks alone, the Hornsdale Power Reserve has smoothed out at least two major energy outages, responding even more quickly than the coal-fired backups that were supposed to provide emergency power.

Tesla’s battery last week kicked in just 0.14 seconds after one of Australia’s biggest plants, the Loy Yang facility in the neighbouring state of Victoria, suffered a sudden, unexplained drop in output, according to the International Business Times. And the week before that, another failure at Loy Yang prompted the Hornsdale battery to respond in as little as four seconds — or less, according to some estimates — beating other plants to the punch. State officials have called the response time “a record,” according to local media.

It’s not just useful, it’s profitable. Fred Lambert, Electrek, Jan 23, 2018, Tesla’s giant battery in Australia made around $1 million in just a few days.

Tesla’s 100MW/ 129MWh Powerpack project in South Australia, the largest in the world for now, has been demonstrating its capacity over the last few weeks since going into operation last month.

But now the system is showing its potential to be highly profitable by making an estimated $1 million AUD (~$800,000 USD) in just a few days.

The Powerpack system built by Tesla and operated by Neoen as part of their nearby wind farm is used on two different levels.

Neoen has access to about 30 MW/ 90 MWh of the capacity to trade on the wholesale market, while the government has access to the rest to stabilize the grid.

The battery demonstrated its capacity for the latter by reacting to a crashed coal plants in milliseconds last month.

But this month, it’s Neoen that is making full use of its Powerpack capacity thanks in part to the volatile Australian energy market and warm temperatures.

The Powerpack system is able to switch from charging to discharging in a fraction of a second, which allows Neoen to take advantage in the large swings in energy prices in the country — especially during high demand periods.

Last week, Tesla’s massive battery was paid up to $1000/MWh to charge itself and now it could have cleared up to $1 million in the last few days.

Wellinghoff was right

FERC Commissioners have pushed fracked methane pipelines for years, especially since back in 2013 Senator John Barrasso found an alleged conflict of interest that caused then-Chair Jon Wellinghoff to resign shortly after Wellinghoff predicted (as had I) that solar power will generate more total U.S. electricity than any other source within ten years. Wellinghoff and I were right: according to FERC’s own figures, deployed U.S. solar power is actually more than doubling every two years, which means we’re well on track for 2023. Sen. Barrasso, meanwhile, was wildly wrong in his prediction that greenhouse gas emissions from China would continue to grow to the year 2050: Chinese emissions actually peaked in 2014.

Back to UtilityDive:

At the open meeting, FERC commissioners and the chairman expressed disappointment that they could not issue an order similar to their storage decision on how aggregations of distributed energy resources can participate in power markets.

“It would have been great if we could have addressed both storage resources and distributed energy resources today rather than having to schedule a further … conference,” Chairman Kevin McIntyre told reporters. “But really after looking at the state of the record in those two side-by-side issues, we determined that we needed to bolster our record on the distributed energy resources.”

A two-day technical conference in April aims to provide that bolstering. During the meeting Commissioner Cheryl LaFleur, a Democrat, laid out two of her key areas of inquiry for the conference:

  • “Money issues” — because aggregated DERs are diverse and can provide multiple services, “who pays what, to whom, for what?”
  • “Operational issues” — how utilities that control the distribution system can communicate with grid operators to allow aggregated DER participation.

This is giving me deja vu from the 1990s, when telephone companies (telcos) asked the same kinds of questions about that new-fangled Internet: how would Internet Service Provicers (ISPs) pay each other? The telcos were very confused that the biggest ISPs didn’t: they just passed packets of data among themselves. The telcos insisted that packet switching of small chunks of data could never work without pre-allocated circuit switching of entire end-to-end paths of copper or fiber. Well, the telcos that survived the ensuing disruption of telecommunications had deeper pockets and bought out the upstart ISPs, but pretty much all telecommunications, including voice calls, is now done by packet switching. The Internet won completely, and solar power will win like the Internet did.

The two FERC orders

Thursday’s twin Orders are on market participation and frequency response. Each of the FERC Commissioners provided a seperate statement on at least one of these Orders, except for Chairman McIntyre.

Storage Market Participation

  • FERC, Order No. 841, Docket Nos. RM16-23 -000 and AD16-20-000, Feb. 15, 2018, Electric Storage Participation in Markets Operated by Regional Transmission Organizations and Independent System Operators,

    187. We are persuaded, however, by commenters’ arguments that there may be other means of accounting for the physical and operational characteristics of electric storage resources than bidding parameters. For example, some of the bidding parameters that the Commission proposed in the NOPR may account for physical characteristics that do not change over time, such that an electric storage resource could report that information when registering as a market participant in an RTO/ISO without updating that information continually through its bidding parameters. However, we note that it may only be possible to represent some of the physical and operational characteristics (such as a forecasted State of Charge) through bidding parameters. Furthermore, we agree with commenters that greater regional flexibility than the Commission proposed in the NOPR is appropriate; different RTOs/ISOs may be able to more effectively account for the physical and operational characteristics of electric storage resources through different mechanisms given their unique market designs.

    Therefore, we add section 35.28(g)(9)(i)(c) to the Commission’s regulations to require each RTO/ISO to have tariff provisions providing a participation model for electric storage resources that accounts for the physical and operational characteristics of electric storage resources through bidding parameters or other means. In its compliance filing, each RTO/ISO must demonstrate how its proposed or existing tariff provisions account for the specific physical and operational characteristics of electric storage resources described below. We find that this requirement will improve the ability of electric storage resources to provide all of the services that they are technically capable of providing and allow the RTOs/ISOs to procure these services more efficiently, which will enhance competition and, in turn, help to ensure that the RTO/ISO markets produce just and reasonable rates.

    So FERC admits it can’t require storage operators to account for every second of power generation or pricing, and puts a fig leaf on it with verbiage about “physical and operational characteristics”.

  • FERC Commissioner Neil Chatterjee, Statement, Feb. 15, 2018, Electric Storage Participation in Markets Operated by RTOs and ISOs,

    “Today’s storage rulemaking is a significant achievement, one that would not have been possible without the excellent work of many across this building. As always, I’m immensely grateful for the expertise and dedicated efforts of the staff, my colleagues, and my team which resulted in this order.

    “This storage rulemaking is a clear example of something I learned rather quickly when first coming onto the Commission — that is, the perception of FERC’s processes outside this building is not always reflective of the reality within it.

    “As I was making my way through the Senate confirmation process, I and others on Capitol Hill, were under the impression that this rule would be finalized in short order, and, as such, I committed to Senators Ed Markey and Sheldon Whitehouse that I would make the storage rulemaking one of my top priorities. My sense that this could be accomplished quickly changed significantly after I came on as Commissioner and began digging deeper into the complexities of the rulemaking. I realized that although the staff worked diligently on the rulemaking throughout the no quorum period, the issues addressed in this order were more intricate than I first thought and they required additional efforts to properly tackle them.

    “Even still, I intended to keep my commitment to Senators Markey and Whitehouse, and as I began my short time as Chairman, I had the opportunity to drive that process forward. It continued as I stepped into my role as Commissioner, where I’ve had the privilege of working with my colleagues and staff to reach a conclusion that resolves many of these complex issues. That hard work has yielded what I believe is a very thoughtful and well written final rule, one that we as a Commission can be proud of.

    FERC’s processes for rubberstamping interstate natural gas pipelines are just as bad as the public perception. However, apparently somewhere in the bowels of FERC there are staffers who are not ink-stained rubberstampers. Very interesting that Senators Markey and Whitehouse were pushing this distributed energy resources (DER) Order. That would be the same Senator Sheldon Whitehouse who called out FERC on its failure to do what the judges ordered about the social cost of carbon for the fracked methane pipelines Sabal Trail, Transco, and Florida Southeast Connection. This Order and its twin of Thursday could hasten the end of those fracked methane pipelines.

  • FERC Commissioner Cheryl A. LaFleur, Statement, Feb. 15, 2018, Electric Storage Participation in Markets Operated by RTOs and ISOs,

    “Electric storage is like a ‘Swiss army knife’ that can serve customers in multiple ways, including that it can (1) provide energy, particularly in conjunction with variable renewable generation, (2) provide frequency regulation and other ancillary services, and (3) help defer distribution and transmission needs. Of course, some storage technologies such as pumped hydroelectric storage already play an important role in serving customers. Many new technologies including batteries, flywheels, compressed air, thermal storage and others are rapidly gaining commercial viability and scale.

    The cost-effective Swiss army knife of electric storage already disrupted the South Australian energy market, and now it will disrupt the U.S. energy market, unleashing sun and wind power from baseload capacity kennels.

    She notes FERC called “a two-day technical conference on distributed energy resources”.

    “In my mind, there are two broad sets of issues to consider at the technical conference. The first relates to ensuring just and reasonable payment for distributed services. Since storage and other distributed resources are technically capable of providing many different services at both the wholesale and retail level, there needs to be a crisp understanding of who pays what to whom for what, which encompasses service definition, accounting, metering, and billing.

    Increasingly community-level solar, wind, and battery power systems will operate under FERC’s radar, and much of it may happen without traditional billing.

    The second set of issues relates to operational coordination. I know, from experience, that distribution systems tend to be operated very dynamically. We need to figure out how the transmission and distribution control centers will coordinate so that there is appropriate visibility of the deployment of distributed resources to ensure reliability and safety at all levels.

    The irony! FERC’s requirement of Informational postings by interstate “natural” gas pipelines does not require them to provide visibility into how the gas travels among their different pipelines, so if you want to know that, you have to compile cross references yourself, or subscribe to a paid service that does that. FERC is not going to succeed in making community-level renewable energy accountable to FERC in that way.

    As for safety, for sure electric utilities don’t want power coming back onto the grid when they are down and linemen are fixing things. But automated cutoffs are readily available and are already required by law for example in Georgia for renewable energy providers to connect to the grid.

  • FERC Commissioner Richard Glick, Statement, Feb. 15, 2018, Electric Storage Participation in Markets Operated by RTOs and ISOs,

    “Today’s order marks an important step forward in the Commission’s regulation of wholesale electricity markets. By eliminating barriers to energy storage resources’ participation in RTO and ISO markets, today’s order will facilitate the development of a class of technologies—ranging from batteries to pumped hydro—that has the potential to play a leading role in the transition to the electricity system of the future, but that has heretofore been hindered by market rules that were designed primarily to accommodate more conventional means of electric generation….

    “I look forward to the upcoming technical conference and to the Commission’s subsequent action to finalize a rule regarding the participation of distributed energy resources in RTO and ISO markets. These resources, no less than energy storage, have the potential to play a leading role in the electric grid of the future and the Commission should act promptly to eliminate any unnecessary barriers to their participation in wholesale markets.”

    Commissioner Glick didn’t quite say what they all know: sun, wind, and water power with storage will be the electric grid of the future, and that future is already well on its way.

  • FERC Commissioner Robert F. Powelson, Statement, Feb. 15, 2018, Electric Storage Participation in Markets Operated by RTOs and ISOs,

    “In my view, today’s Final Rule also strikes the appropriate balance between prescriptive requirements and high-level directives. We have directed the RTOs and ISOs to develop a participation model for energy storage resources that must take into account certain physical and operational characteristics unique to those resources. In doing so, we have given the RTOs and ISOs significant latitude to develop market rules that work best with existing market constructs and are respectful of regional differences. I encourage all stakeholders to work diligently in developing the tariff revisions necessary to bring the RTOs and ISOs in compliance with the Final Rule.

    That’s what will be the end of fossil fuels and nuclear power: “a participation model”.

Frequency Response

  • FERC PR, Feb. 15, 2018, FERC Revises Requirements for Provision of Primary Frequency Response.
  • FERC Order No. 842, Docket No. RM16-6-000, Feb. 15, 2018, Essential Reliability Services and the Evolving Bulk-Power System—Primary Frequency Response

    21. First, Article of the pro forma LGIA does not address the settings of governors or equivalent controls (i.e., deadband and droop), nor does Article address plant-level controls, which if not properly coordinated on a generating facility, can lead to the premature withdrawal of primary frequency response during disturbances. Furthermore, the substantial body of knowledge regarding the operation of generator governors and plant control systems amassed by NERC and industry stakeholders since the pro forma LGIA was promulgated under Order No. 2003 raises concerns that Article of the pro forma LGIA allows too much discretion for generator owners and operators. For example, in 2012, NERC found that a number of generators implemented deadband settings that were so wide as to effectively disable themselves from providing primary frequency response, and also that many generators provide frequency response in the wrong direction during a disturbance.48 In addition, in 2015, NERC observed that: (1) for many conventional steam plants, deadband settings exceeded ±0.036 Hz; (2) several generating facilities failed to sustain primary frequency response; and (3) the vast majority of the gas turbine fleet was not frequency responsive.49

    48 NERC Frequency Response Initiative Report at 92, 96-97.

    49 NOI, 154 FERC ¶ 61,117 at P 50 (citing NERC Generator Governor Frequency Response Advisory — Webinar Questions and Answers at 1 (April 2015), http://www.nerc.com/pa/rrm/Webinars%20DL/Generator_Governor_Frequency_Response_Webinar_QandA_April_2015.pdf.).

    22. Second, existing Article of the pro forma LGIA states that “speed governors,” if installed, must be operated in automatic mode. However, instead of utilizing traditional speed governors to implement primary frequency response capability, many new non-synchronous generating facilities interconnecting to the grid, such as wind, solar, and electric storage resources, utilize enhanced inverters and other plant control technology that can be designed to include primary frequency response capability.50 We find that due to these recent technological advancements that allow new large non-synchronous generating facilities to install primary frequency response capability at low cost, as well as the expected overall increase of the proportion of the resource mix that are non-synchronous generating facilities, it is unduly discriminatory and preferential to only require synchronous generators to provide primary frequency response. The references to “speed governors” in existing Article of the pro forma LGIA, which are only applicable to large synchronous generating facilities, are outdated and should be expanded to include both synchronous and non-synchronous generators.

    50 See Electric Power Research Institute, Recommended Settings for Voltage and Frequency Ride-Through of Distributed Energy Resources at 27(May 2015), http://www.epri.com/abstracts/Pages/ProductAbstract.aspx?ProductId=000000003002006203. See also National Renewable Energy Labs (NREL), Advanced Grid-Friendly Controls Demonstration Project for Utility-Scale PV Power Plants, at 1-2 (Jan. 2016), http://www.nrel.gov/docs/fy16osti/65368.pdf.

    Let me translate that.

    1. Gas power plants actually aren’t very good at setting AC frequency, including getting it backwards.
    2. With current technology and this rule, sun and wind power no longer need to depend on outdated “baseload capacity” coal, oil, gas, or nuclear plants to set the phase or voltage of AC power.

    What the FERC Order doesn’t quite say, at least one of the Commissioners does in a separate statement.

  • FERC Commissioner Cheryl A. LaFleur, Statement on Item No. E-2, Docket No. RM16-6-000, Requirements for Provision of Primary Frequency Response,

    “Changes in our nation’s resource mix, including particularly the lower percentage of synchronous generation, have contributed to declining frequency response performance in the Eastern and Western interconnections. However, recent technological advancements have enabled new non-synchronous generating facilities, such as wind and solar, to cost-effectively include primary frequency response capabilities in their facilities.

    Solar and wind power are the solution. The problem is traditional power sources’ inability to provide reliable AC frequency and voltage in a market with renewable energy.

    “I agree with the decision not to require compensation or direct a mandatory NERC standard regarding primary frequency response at this time. However, I think the Commission should continue to monitor the impact of today’s rule on frequency response performance and consider additional actions to ensure adequate frequency response if and as appropriate.”

    Watch as “at this time” becomes forever, because the question of compensation will be forgotten as solar and wind and battery power rapidly take over. Well, there may be requests for compensation for coddling the failing dinosaurs of fossil fuel and nuclear power plants as they lumber on and off.

No more pipelines. Let the sun rise!

 -jsq, John S. Quarterman, Suwannee RIVERKEEPER®

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