WASHINGTON (Reuters) - In a boost for electric storage technology, the Federal Energy Regulatory Commission (FERC) on Thursday approved a new rule to remove barriers to batteries and other storage resources in U.S. power markets.
The FERC order will “enhance competition and promote greater efficiency in the nation’s electric wholesale markets, and will help support the resilience of the bulk power system,” the commission said in a statement.
The commission found in November 2016 that existing market rules that governed traditional electric generation resources created barriers to entry for electric storage technologies.
Thursday’s decision changes the rules to “properly recognize the physical and operational characteristics of electric storage resources.”
The market for energy storage is small, but growing as the costs of battery systems have fallen domestically. Batteries can help solve the intermittent nature of renewable energy - dependent on sun and wind - compared with more generation sources like gas and coal, which can run all the time.
Last month, FERC voted to reject a directive by Energy Secretary Rick Perry to consider a plan to subsidize coal and nuclear plants for what he said were their contributions in making the power grid more reliable and resilient.
FERC ruled unanimously that such subsidies were unfair and could raise power bills for homeowners and business.
“I believe that new technologies like electric storage are an important part of our ongoing discussion of grid resilience,” said one of five FERC commissioners, Robert Powelson.
Fellow commissioner Neil Chatterjee said eliminating barriers to battery storage technology will result in “greater reliability and lower costs for the American people.”
Renewable energy executives welcomed the FERC decision, saying it will level the playing field with conventional electric generation sources.
”Solar [power] plus storage is getting near the point where it can compete with natural gas peakers and that’s a really big deal because it’s sort of the last stronghold for conventional thermal energy,” said Tom Werner, CEO of SunPower Corp.
“What the FERC ruling allows is the most economic solution to be able to bid in and compete.”
Reporting By Valerie Volcovici; additional reporting by Nichola Groom in Los Angeles; Editing by Susan Thomas