Common regulatory barriers faced by energy storage projects include the following:
- Lack of Clear Definitions and Classification: Many regulatory frameworks do not have standardized or clear definitions for energy storage systems (ESS). This ambiguity makes it difficult to develop consistent policies and creates uncertainty for investors and developers.
- Slow Administrative and Regulatory Processes: Implementation of new rules to support energy storage often faces delays. For example, the slow adoption of performance-based compensation (such as FERC Order 755) and the delayed inclusion of energy storage in market participation or procurement planning by public utility commissions impede deployment.
- Inadequate Market Structures and Rules: Existing electricity market designs often fail to fairly recognize or compensate the value provided by energy storage. This includes limited or unclear participation rules in ancillary service markets and a market structure that discourages long-duration storage investments.
- Safety and Certification Challenges: Energy storage systems, particularly batteries, require robust safety regulations to address risks like fire, thermal runaway, and chemical hazards. The absence of harmonized safety standards and certification processes acts as a barrier to wider adoption.
- Interoperability and Grid Integration Issues: Energy storage must effectively integrate and communicate with the existing grid infrastructure, including renewable generation and demand response programs. The lack of interoperability standards complicates this integration and hinders efficient operation within the grid.
Overall, these regulatory barriers stem from the novelty and complexity of energy storage technologies and the evolving nature of electricity markets and grid operations. Addressing these barriers requires coordinated efforts among regulators, system operators, and industry stakeholders to update regulatory frameworks, standardize definitions, streamline administrative processes, and develop safety and interoperability standards.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-common-regulatory-barriers-faced-by-energy-storage-projects/
