1. Regulatory Framework Adjustments
- Incorporate LDES Benefits: Modify regulatory structures to fully account for the benefits LDES provides, such as grid resilience and peak load management.
- Service Definitions: Clarify and expand definitions of grid services that LDES can offer beyond simple capacity, including frequency regulation and voltage stability.
2. Incentivizing Mechanisms
- Subsidies and Incentives: Implement or enhance government subsidies and tax incentives to reduce the economic barriers associated with deploying LDES technologies.
- Carbon Pricing: Introduce or strengthen carbon pricing mechanisms to economically favor low-carbon energy solutions, including LDES.
3. Market Design Improvements
- Duration-Based Bidding: Adapt capacity markets to allow for duration-based bidding, enabling LDES systems to compete fairly based on their unique value proposition of longer storage periods.
- Compensation for Ancillary Services: Ensure that LDES facilities receive fair compensation for providing ancillary services like grid stabilization and backup power during extended outages.
4. Infrastructure and Grid Modernization
- Grid Integration Standards: Develop standardized protocols for integrating LDES into grids to ensure seamless operation and maximize their potential.
- Investment in Grid Infrastructure: Encourage investments in grid modernization to support the integration of LDES technologies, enhancing overall grid reliability and efficiency.
5. Technology Advancements
- Research & Development Funding: Increase funding for R&D in LDES technologies to improve efficiency, reduce costs, and enhance scalability.
- Technology-Specific Incentives: Offer incentives specific to emerging LDES technologies like flow batteries and compressed air storage systems to accelerate their commercialization.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-specific-reforms-are-needed-to-incentivize-long-duration-energy-storage-in-capacity-markets/
