A report released December 20 by the Independent Electricity System Operator analyzes a range of obstacles to the wide-scale development of electricity storage, and puts forward a number of recommendations.
As the IESO notes, energy storage is poised to play a greater role in the electricity system. Developed with input from the IESO’s Energy Storage Advisory Group, Removing Obstacles for Storage Resources in Ontario focuses on the need for greater clarity when it comes to Market Rules, Ontario Energy Board codes, legislation and regulations.
In addition to considering the market-efficiency implications of applying wholesale uplifts, the report recommends, among other things, reviewing the application of transmission and distribution charges, a clearer framework for the inclusion of energy storage in rate bases, and guidance for resources providing multiple services to different entities.
The recommendations fall into two categories. The first addresses lack of clarity in Market Rules, OEB Codes, legislation and regulations related to energy storage resources, while the second deals with specific concerns within the Market Rules, OEB Codes, Policy and Guidance, legislation and regulations, or any combination thereof.
Lack of clarity in market rules
As the IESO notes, because the Market Rules, OEB Codes, legislation and regulations are often silent on energy storage, all parties are left to interpret how the existing rules apply. Because storage resources act as both a load and a generator, the intended application and interpretation of existing rules for loads and generators is often unclear. This can create confusion and inefficient outcomes.
Recommendations:
• The IESO should review and amend its Market Rules, where possible, to clarify the participation of storage resources in IESO-administered markets.
• The OEB should review its Codes to consider energy storage participation and its regulatory framework, including processes and requirements for connections.
• The Government of Ontario should consider energy storage in Ontario legislation and regulations.
IESO market rules
• Consider the market-efficiency impact of applying wholesale uplift charges.
OEB Codes, Policy and Guidance
• Review application of transmission and distribution charges.
• Clarify the use of forecast revenues from distribution and transmission rates as an offset to connection costs.
• Provide a clearer framework for including storage assets in rate bases.
IESO Market Rules and OEB Codes, Guidance and Policy
• Develop guidance for storage resources providing multiple services to different entities.
Legislation and Regulation
• Review the application of the gross revenue charge.
• Review the application of the RRRP program surcharge.
• Clarify the resources that transmitters and distributors can own and operate.
To learn more, download the report.