1. Incentivizing Reliability and Duration
- Current Issue: Current capacity markets mainly focus on incentivizing power availability during peak events but do not adequately compensate for long-term reliability and continuous grid support.
- Required Change: Markets should be reformed to incentivize the ability of storage systems to provide power over extended periods, addressing gaps in renewables-heavy grids during periods of low generation.
2. Integration of Non-Fossil Flexibility
- Current Issue: Existing mechanisms often overlook the role of energy storage in ensuring grid flexibility.
- Required Change: Capacity markets should be designed to explicitly promote the participation of non-fossil flexibility solutions, such as energy storage, by providing clearer guidelines and incentives for their integration.
3. Assessment of Flexibility Needs
- Current Issue: Markets lack detailed assessments of how much flexibility they require to maintain stability.
- Required Change: Markets need to conduct thorough assessments of their flexibility needs to effectively incorporate long-duration energy storage solutions.
4. Market and Regulatory Reforms
- Current Issue: Existing market frameworks do not support the economics of standalone long-duration energy storage.
- Required Change: Comprehensive market and regulatory reforms are essential to create an environment where long-duration energy storage can be economically viable and deployed at scale.
5. Incorporating Long-Duration Incentives
- Current Issue: Current mechanisms do not provide incentives specifically tailored to the capabilities of long-duration energy storage.
- Required Change: Incentives should be tailored to encourage the development and deployment of long-duration energy storage solutions that can stabilize the grid over extended periods.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-specific-changes-are-needed-in-capacity-markets-to-support-long-duration-energy-storage/
