An international review of the implications of regulatory and electricity market structures on the emergence of grid scale electricity storage

Oghenetejiri Harold Anuta, Phil Taylor, Darren Jones, Tony McEntee and Neal Wade

Renewable and Sustainable Energy Reviews, 2014, vol. 38, issue C, 489-508

Abstract: Energy storage systems (ESS) have the potential to make a significant contribution to planning and operation practises in power systems. While ESS can be used to provide multiple benefits in the power sector, widespread use has been restricted by high technology costs, lack of deployment experience, and the barriers and uncertainties caused by the present electricity market and regulatory structures that were designed for conventional electricity systems. This paper reviews countries with high renewable targets and with significant current or planned ESS deployments to ascertain the common problems affecting the use of ESS on the grid, and to establish where changes have been made or proposed to the electricity market and regulatory frameworks. Three major problems were identified as the undetermined asset class for ESS and unbundled electricity system limiting stakeholders from determining and realising multiple ESS benefits; low electricity market liquidity and changing market conditions; and a lack of common standards and procedures for evaluating, connecting, operating and maintaining ESS. Based on the established barriers, recommendations to update or create policies, regulation and market arrangements to increase the viability and wider use of grid level ESS are discussed. The three key regulatory and policy recommendations were identified as an alignment of renewable policies to that of ESS; creating a separate asset class for ESS and associated rules for regulated and competitive operations; and standardising assessment frameworks, connection and operational procedures for the use of ESS. Finally, three main electricity market recommendations include updating rules to support simultaneous ESS operation across wholesale, ancillary services and capacity markets; updating market rules to allow compensation for flexible and highly accurate responsive demand and generation technologies, such as ESS; and updating market ancillary services energy requirements.

Keywords: Energy storage systems; Unbundled electricity system; Regulation; Electricity market; Policy; Transmission and distribution networks; Renewable energy (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (25)

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DOI: 10.1016/j.rser.2014.06.006

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