IEEE Power & Energy Magazine - September/October 2017 - 43

State of the Art and Open Issues

Regulatory Role of Storage:
Ownership and Operation Regime
We begin our discussion of energy storage regulation by reviewing the key issues of ownership and operation-first, from the
stakeholders' point of view in the debate and, then, to argue that
the debate itself should be refocused.

Regulatory Discussion to Date

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september/october 2017	

Given the wide array of services that energy storage systems
(ESSs) can provide, various agents-including generators,
consumers, and network owners and operators-have an interest in owning and operating them. This has driven the regulatory debate to date to focus on a basic definition of an ESS,
i.e., whether storage should be classified as a network asset, a
generation asset, or a new separate asset category altogether. If
storage is considered a generation asset (the default classification given to ESSs in most liberalized systems), unbundling
requirements prevent network businesses from owning and
operating storage resources. Alternatively, if storage is classified as a network asset, network businesses own and operate
the systems but are restricted from using ESSs to participate in
liberalized activities.
The European Commission explicitly states that neither
distribution system operators (DSOs) nor transmission system operators (TSOs) should be allowed to own, develop,
manage, or operate energy storage facilities. The commission highlights certain exceptions to this rule, but its overall
position is clear: network businesses must maintain independence from market players.
To our knowledge, FERC has yet to publish a regulation regarding storage ownership and operation. However,
a recent FERC opinion provides some insight into what its
point of view might be. Specifically, FERC has denied Nevada
Hydro's request to operate storage as a transmission asset,
while accepting Western Grid's filing. Western Grid committed to forego any sales into the California Independent
System Operator's (CAISO's) organized wholesale electricity
markets; this assured FERC that Western Grid would remain
independent from CAISO. Conversely, Nevada Hydro's proposal required CAISO to operate the storage facility, thus
increasing the potential for CAISO to become a profit-seeking
energy market participant.
Clearly, several open questions remain: first, whether regulated entities can own storage (or if there is any meaningful
reason to justify why they could) and, second, who should
ieee power & energy magazine 	

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Table of Contents for the Digital Edition of IEEE Power & Energy Magazine - September/October 2017

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IEEE Power & Energy Magazine - September/October 2017 - Cover3
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