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IESO report outlines next steps to remove obstacles for energy storage

December 19, 2018

Removal of barriers will promote fair competition for energy storage resources in the delivery of products and services

With energy storage poised to play a greater role in the electricity system, the IESO has published a series of recommendations aimed at addressing barriers to their fair competition in the current wholesale markets. Developed with input from the IESO’s Energy Storage Advisory Group (ESAG), Removing Obstacles for Storage Resources in Ontario speaks to the need to modify existing rules to pave the way for energy storage technologies in the sector.


According to Len Kula, IESO Chief Operating Officer and VP, Planning, Acquisition and Operations, the current challenge facing ISOs is a classic case of regulation not keeping up with technology.


“There’s no question that it’s been difficult to determine how rules that were created before energy storage was contemplated should be interpreted and applied,” he said, referring to the fact that existing rules don’t take into account the physical and operational characteristics of resources that can serve as both load and generator or the breadth of services they can provide. “Given our ongoing focus on reliability and affordability, and the fact that these resources often improve market efficiency, system operators are making the removal of barriers to energy storage a priority.”


For the IESO, the lack of clarity in its Market Rules is a systemic issue related to other obstacles facing energy storage explored by ESAG. These include the inability of energy storage to participate in the operating reserve market, optimize regulation service, and accrue revenues by offering multiple, non-overlapping services, as well as lack of clarity with respect to storage in the interconnection process and the inability of the IESO’s dispatch scheduling tools to model energy storage functionality.


While the IESO will address barriers within its jurisdiction through proposed amendments to Market Rules, the report advocates a collaborative approach, with the Ontario Energy Board reviewing relevant codes and the Ontario Government considering storage in existing and future legislation.


The IESO’s move to reduce obstacles to energy storage participation in the wholesale markets is aligned with what is happening south of the border, where the U.S. Federal Energy Regulatory Commission issued Order 841, which requires ISOs and regional transmission organizations (RTOs) to implement participation models by the end of 2019. These must ensure that a resource using the model is eligible to provide all capacity, energy and ancillary services that it is technically capable of providing, can be dispatched, and can set the wholesale market clearing price as both a seller and buyer consistent with existing market rules.


The IESO established the Energy Storage Advisory Group in April 2018 to advise and assist the IESO in evolving policy, rules, processes and tools to better enable the integration of storage resource within the IESO-administered markets. With its focus shifting from advice to implementation, the IESO, with input from ESAG, will create a plan to ensure consistent treatment of energy storage facilities and inform IESO Market Rule amendment proposals.

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