1. Lack of Clear Definitions and Classifications
Existing regulatory frameworks often lack standardized definitions and classifications for energy storage systems (ESS). This ambiguity hinders the ability to implement consistent policies, creates uncertainty for investors, and complicates the regulatory approval process for new storage projects.
2. Administrative and Procedural Delays
Regulatory processes tend to be slow in adopting and updating rules that facilitate energy storage integration. This includes delays in adopting performance-based compensation (such as FERC Order 755), modifying market participation rules for energy storage resources, and requiring utilities to consider storage as an alternative in planning and procurement. These slow administrative actions discourage developers who may wait for clear rules before investing.
3. Safety and Certification Standards
Energy storage systems, particularly battery-based ones, raise safety concerns including risks like thermal runaway, fire, and chemical hazards. Regulatory bodies face challenges in establishing robust safety standards and certification processes, which are essential to ensure public safety and acceptance of these technologies.
4. Integration and Interoperability with the Grid
Energy storage must be interoperable with existing grid infrastructure, including renewable generation, distribution networks, and demand response systems. The absence of clear interoperability standards and protocols impedes smooth integration, creating technical and regulatory challenges.
5. Market Structure and Compensation Issues
Energy markets are often not designed to fully recognize or compensate the multiple services energy storage can provide. Limitations in market rules restrict storage participation in ancillary services and capacity markets, thereby reducing economic incentives for deployment. This includes barriers in how storage is treated in wholesale markets and by utilities.
In summary, the main regulatory barriers are a combination of unclear regulatory classifications, slow administrative rulemaking, inadequate safety standards, interoperability challenges, and market design issues that fail to incentivize energy storage deployment comprehensively.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-main-regulatory-barriers-to-energy-storage-deployment/
