IEEE Power & Energy Magazine - September/October 2017 - 48

Rather than allowing existing regulatory definitions of ESSs to guide
who can own and operate storage, we should let sound regulatory
and market economics define the proper rules.
there are no specific bid parameters for smaller energy storage devices participating in the DAM.
Market operators should continue to reevaluate rules and
regulations to ensure that only those constraints derived
from actual system physical limitations are preserved and
should also continue to move toward market rules that ensure
all resources can compete to provide valued s- ervices.
Flexibility

Both the International Energy Agency's Renewable Energy
Technology Deployment (IEA-RETD) and the European Commission highlight the need to create markets that allow resource
participation closer to real time. (IEA-RETD is a cross-cutting,
policy-focused technology platform operating under the legal
framework of the IEA.) Bringing market-clearing closer to real
time allows agents to exhaust their ability to correct forecasting errors and renewable generation intermittency-an area in
which ESSs could excel. However, close-to-real-time market
products add complexity to the ISO/TSO's task. The tradeoff
between the needs of the ISO/TSO and the economic efficiency
of the system must be taken into account in market design,
enhancing coordination between both decision drivers.

Ancillary Services
One area of industry consensus is the potential of ESSs to
provide ancillary services. A wide variety of stakeholders
have highlighted the ability of ESSs to provide primary and
secondary frequency control, voltage support, black-start,
and distribution investment deferral services.
Despite the potential of ESSs to provide ancillary services, some developments are still needed to guarantee the
efficient deployment of flexible resources. In the following,
we outline the need to rely, as much as possible, on market mechanisms to allocate ancillary services and stress the
importance of defining technology-neutral market products
that respond to actual system needs, in particular very shortterm flexibility needs.
Open Product Design

ESSs are, in general, eligible to provide ancillary services in
most markets. Fast ancillary services (in particular, secondary frequency control) are a key potential source of revenue
for energy storage resources. Research and operational experience indicate that fast and accurate resources reduce the
overall need for secondary frequency control (i.e., frequency
regulation). However, ancillary services markets were designed with conventional generation in mind and so some48	

ieee power & energy magazine	

times impose technical restrictions that limit the participation
of nonconventional resources and create unnecessary barriers
for new resources.
For instance, the capacity threshold for resources to participate in the provision of secondary frequency control, as
well as the requirement for a minimum of 1-h energy delivery
capability, can be serious obstacles for small, fast resources to
overcome. Once again, as in CRMs with restrictive run times,
allowing capacity de-rating and resource aggregation will help
new resources with limited energy storage capacity overcome
these barriers.
Furthermore, frequency reserve markets are often based
on auctions organized days, months, or even a year ahead of
real time. When real-time reserve needs are only provided
by the former long-term committed resources, a failure to
reflect the real-time opportunity costs of energy arises.
This inefficiency introduces, in practice, a major barrier
for the efficient participation of storage (a similar barrier
is introduced for intermittent resources). Designing longterm frequency reserve products as call options would mitigate this problem.
In addition, ESS resources face additional barriers in those
systems that define the provision of up and down regulation
as a single product; hence, any ramp-up regulation must be
offered with a matching ramp-down regulation. The regulation that capacity storage assets can offer depends heavily on
the SoC; symmetric bids force storage operators to maintain
the ability to provide regulation in either direction, preventing the use of the device's full capacity. Bundling up and
down regulation reserve products is not only burdensome
for storage but also inefficient for the system as a whole; it
should, therefore, be avoided.
Flexibility

Until recently, ancillary services were procured by TSOs
largely from power producers to manage the system as a
whole, while DSOs performed network planning and operation through the "fit-and-forget" approach. Although this
approach has the advantage of requiring low flexibility, control, and supervision, it most likely will not be the most efficient alternative in a high DER penetration context.
The role of system operators (both DSOs and TSOs) is
key when it comes to ensuring an efficient market integration of storage. IEA-RETD highlights the unique position of
system operators in realizing the potential of storage assets. Policy makers should implement frameworks that enable system operators to translate their unique insight into
september/october 2017



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

IEEE Power & Energy Magazine - September/October 2017 - Cover1
IEEE Power & Energy Magazine - September/October 2017 - Cover2
IEEE Power & Energy Magazine - September/October 2017 - 1
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IEEE Power & Energy Magazine - September/October 2017 - Cover3
IEEE Power & Energy Magazine - September/October 2017 - Cover4
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