What happens when the most important market signal for energy storage gets
stripped away virtually overnight? That’s what happened earlier this year when the
regional transmission operator PJM put in place new rules for storage as a provider
of frequency regulation.
Between 2011 and 2015, hundreds of megawatts’ worth of storage were put in
place to balance the grid in PJM territory. A strong market signal made
development extremely easy, causing an explosion of growth.
We’re in a different world today. New rules have lowered revenue for a 20-
megawatt/5-megawatt-hour storage system from $623 in 2014 to $86 today,
according to GTM Research’s analysis.
Storage developers are now looking to other markets and other types of grid
services to make money.
GTM Research Senior Storage Analyst Dan Finn-Foley has been tracking the
regulation of frequency regulation in PJM and other markets. This week, we
chatted about the impact on America’s storage industry. We also looked to future
revenue models in other regional markets.