ISOs (Independent System Operators) and RTOs (Regional Transmission Organizations) play a critical role in adapting capacity mechanisms to accommodate longer-duration energy storage within power systems. Their functions include grid management, capacity planning, and market operations, all of which are essential for integrating and valuing longer-duration storage technologies.
Roles of ISOs and RTOs in Capacity Mechanisms
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Capacity Planning and Auctions
ISOs and RTOs oversee capacity planning to ensure the power grid can meet future energy demand reliably. They conduct regular capacity auctions where different resources, including generators and storage assets, bid to provide capacity. These auctions set forward-looking capacity prices and help ensure sufficient available resources for future periods. -
Market Management and Resource Integration
By managing wholesale electricity markets, ISOs and RTOs create a competitive environment where various energy resources—including traditional generation, renewables, and storage—can participate. This includes adapting market rules and capacity constructs to recognize the unique characteristics of longer-duration storage, such as its ability to provide energy over extended periods beyond typical short-duration batteries. -
Long-Term Planning and Scenario Modeling
ISOs and RTOs engage in comprehensive long-term planning that looks 10 years or more into the future. They use detailed models incorporating data from generation interconnection processes and capacity procurement mechanisms across neighboring regions. This allows them to evaluate various scenarios involving technology costs, policy impacts, demand growth, and retirements. Such analyses identify system needs and inform the development of capacity mechanisms that accommodate emerging technologies like longer-duration storage. -
Collaboration and Corrective Action Development
Once system needs are identified, ISOs and RTOs collaborate with transmission organizations, generation owners, and load-serving entities to develop cost-effective plans. This involves considering policy-driven requirements, environmental factors, and infrastructure aging. Through this collaborative process, capacity mechanisms can be adapted to incentivize longer-duration storage technologies that help meet evolving grid reliability and adequacy standards.
Summary
In summary, ISOs and RTOs facilitate the integration of longer-duration storage into capacity markets by:
- Hosting capacity auctions that allow storage to compete and secure revenues for capacity provision.
- Managing market structures to reflect the operational and economic characteristics of longer-duration storage.
- Conducting robust long-term planning to identify system needs and inform capacity procurement aligned with future reliability requirements.
- Collaborating with stakeholders to develop and implement capacity mechanisms that incentivize and accommodate longer-duration storage.
These roles ensure that capacity mechanisms evolve from primarily supporting traditional generation to also valuing the flexibility and extended discharge capabilities of longer-duration storage.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-role-do-isos-and-rtos-play-in-adapting-capacity-mechanisms-for-longer-duration-storage/
