IEEE Power & Energy Magazine - September/October 2017 - 64

PJM's first grid-scale battery energy storage resource
was a 1-MW project that offered regulation service
to the PJM market in 2009.

plant pond-level constraints and daily storage-level constraints
that incorporate the efficiency factor. In the RT market, pumped
storage resources mainly follow their DA schedules, with the
option to arbitrage based on RT prices. Pumped storage modeling reduces operation uncertainty and helps with DA and
RT market convergence, along with the economic benefit to
resource owners.

Installed
Capacity/
Qualified
Rating
(MW)

Capacity Energy

Ancillary
Services

Pumped
storage hydro
(generation)

5,537

Yes

Yes

Yes

Battery
(generation)

289

No

No

Yes

Flywheel
(generation)

20

No

No

Yes

Battery
(demand-side
resource)

14

Yes

No

Yes

0.81-0.90

0.91-1.00

table 1. Storage resources' participation
in PJM's wholesale markets.

RegA

RegD

0.61-0.70

80
70
60
50
40
30
20
10
0

0.51-0.60

Signal Type MW (%)

100
90

0.71-0.80

Electric
Storage
Resource by
Technology

Performance Score Range

figure 6. Regulation performance score.
64	

ieee power & energy magazine	

Capacity Market Participation
Currently, only pumped storage hydroelectric and DR participate in PJM's capacity market. In 2016, PJM implemented
new rules and strict penalties related to the performance
assessment of capacity resources. Many resource operators
are still evaluating their ability to perform to their installed
capacity commitments.
Nonhydroelectric advanced energy storage resources are
eligible, but are not required, to offer their storage capability
into the capacity market. Capacity storage resources measure their capability as the average magawatthour energy
generation over the expected seasonal peak period, which
ranges from 3 to 5 h of continuous injection. They must manage the risk of their offers and are subject to the same nonperformance charge as all other capacity resources. Additionally,
capacity storage is allowed to aggregate with DR, renewables,
or energy efficiency.

Ancillary Service Market Participation
Most storage resources directly participate in the regulation
market, including pumped storage hydro, flywheels, and batteries. Some storage technologies participate in the regulation
market from behind the meter, through PJM DR. For behindthe-meter resources, they are paid just like other resources but
are not eligible for make-whole payment. Also, there is a 25%
cap on the amount of regulation that can come from DR.
Batteries in PJM today exclusively participate in the regulation market providing fast regulation service (RegD). These
devices are capable of following faster signals with higher
precision than their slow regulation service (RegA) counterparts. As shown in Figure 6, RegD resources have much
higher performance scores than RegA resources.
The implementation of the performance-based regulation
market rules incentivized significant amounts of RegD investment in the regulation market. For an energy storage resource,
the RegD signal was relatively easy to follow, and in return,
batteries were given a payment multiplier that invited capital investment. However, in 2015, several large hydroelectric
plants qualified and participated as RegD resources, which
tripled the amount of RegD resources in a short period of
time. These resources self-scheduled into the market, which
began to drive down the clearing prices.
Since RegD economically displaces RegA in the regulation market, PJM began to see a significant decline in the
amount of nonhydro traditional resources clearing the market to provide regulation service. PJM observed that it was
september/october 2017



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