As more renewable energy is connected to the grid, more grid-scale energy storage can provide operational flexibility, reliability and stability.
The Electric Reliability Council of Texas (ERCOT) market is among those markets finding an increase in emerging storage technologies interconnection requests. With more than 31 gigawatts (GW) of stand-alone energy storage projects and an additional 36 GW of combined solar and storage projects in the interconnection queue, ISOs and RTOs like ERCOT are continuing to find that dealing with the challenges of integration is a significant planning and operational burden.
The grid is changing rapidly. In ERCOT, for example, significant coal-fired capacity is being retired and ERCOT’s energy-only market structure does not provide capacity-based incentives to build new conventional generation; instead, ERCOT relies on market volatility to signal the need for a potential new resource. The existing investment tax credit (ITC) incentive structure encourages renewable energy projects and these incentives will gain momentum under the 2022 Inflation Reduction Act (IRA). The IRA establishes a new ITC structure for stand-alone battery energy storage systems (BESS). The result is that ERCOT has, and will likely continue to have, one of the country’s highest percentages of renewable energy capacity connected to the grid. As of the end of 2021, 28.4 GW of wind capacity and 8.3 GW of solar capacity was connected to the ERCOT system. These numbers are expected to increase with passage of the IRA.
These factors are making it extremely challenging for independent system operators (ISOs) and regional transmission organizations (RTOs) to initiate and complete the transmission reliability studies that are necessary to support integration. The best opportunity to overcome these challenges is for ISOs and RTOs to have key partners on the other side of the table within BESS developer organizations that understand the purpose and drivers of these vital reliability studies. Navigating the design, construction and commissioning process for BESS with operations and planning in mind will require close collaboration among generators, transmission service providers (TSPs) and ISOs like ERCOT. This collaboration is the key to a win-win-win scenario for all players.
