CAISO launches initiative to explore market reforms tied to grid-scale storage growth

by Paul Ciampoli
APPA News Director
April 29, 2021

The California Independent System Operator (CAISO) on April 28 launched an initiative to explore market reforms in anticipation of a surge of grid-scale energy storage on its system in the next few years.

CAISO in a news release noted that it is projecting a four-fold increase in the amount of battery storage on its system from late last year to this summer.

At the end of 2020, the ISO had about 250 megawatts (MW) of storage resources — primarily 4-hour batteries — connected to the grid. It currently has about 500 MW on its system and expects to have a total of 2,000 MW by August 1. This rapid pace of growth is expected to continue in the years ahead, the grid operator said.

“Unlocking the full value of energy storage resources requires changes to the ISO market to better align price signals and cost recovery mechanisms with the reliability and operational needs of the grid,” CAISO said.

The ISO said it intends to leverage expertise from across the storage industry and to share its findings through such initiatives as the Global Power System Transformation Consortium that was formally launched in April with the U.S. Department of Energy and utilities.

CAISO publishes issue paper

CAISO on April 28 published an issue paper on possible energy storage enhancements, outlining the current challenges and seeking input on new market mechanisms to fully integrate storage and maximize its use on California’s electricity system.

The grid operator said that the issue paper effectively launches the energy storage enhancements stakeholder initiative process, which will invite feedback from all industry sectors, particularly the storage resource community, on the market redesigns and their effects.