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Commission Issues Order On Maryland Energy Storage Program’s Workgroup Report
Re: Maryland Energy Storage Program
From Order:
[ *** ] The Commission appreciates that the potential scope of HB910 is expansive and covers a wide number of technologies and use-cases. It is the ambition of the State, and therefore the Commission, to construct a program framework that can ultimately support that grand scope. At present, however, Maryland has a limited marketplace for energy storage as a grid asset and no proven incentive system. Although the Commission currently supervises an Energy Storage Pilot, with four participating utilities, that program is still in its infancy with five utility energy storage projects currently operational. It is imperative, therefore, that this Program build a firm foundation capable of supporting the State’s goals. The Commission notes the concerns raised in the Report regarding certain technologies and use-cases that present design challenges. The Commission appreciates that this issue appears – based on the Report – in some topic areas more than others. The Commission agrees with the Report that the grid services programs should ideally be open to all resources capable of meeting the performance criteria, whether pre-existing or not. For other purposes, to the extent that certain technologies and use-cases resist comparative valuation (such as valuing projects based on equivalent MW capacities) or present other difficulties in program design, that factor may weigh against either their inclusion in the affected programs, such as deployment incentives, or the use of those programs entirely.
The Commission expects that the valuation of deployment will be a continually evolving metric throughout the Program. Given the short timeframes demanded by HB910, the Commission’s first imperative is to begin and apply this Program to those resources whose valuations can be readily determined. The Commission anticipates the Program expanding to include other technologies and use-cases as valuation methods improve and will evaluate the appropriateness of the use-case at that time.
Toward that end, the Commission presently accepts the stakeholder majority recommendation for a more restrictive definition of “energy storage device” until alternative methods of measuring equivalent megawatts are developed for measuring storage for technologies that do not discharge electricity. Similarly, the Commission understands that certain models, such as mobile batteries, may require greater study within the Workgroup to properly value their contributions to the grid.
The Commission is presently unconcerned about the risk that a single storage technology or use-case may come to dominate the Program’s capacity goals, presumably by out-competing alternative models, specifically in the example of “pumped hydro” as mentioned in the Report. To the extent that such an eventuality arises out of a market failure, the Commission will act appropriately to correct the Program. The Commission additionally notes that the competitive procurement of 3,000 MWs in statute is described as a minimum subject to cost effectiveness.6
The Commission takes no position at this time on the question of whether preexisting energy storage resources should count towards the statutory capacity targets. The Commission has concerns, however, that distinguishing between existing and new-build resources for purposes of program eligibility for programs could have fairness concerns and send the wrong message about Maryland’s commitment to energy storage as a key part of its energy future.
Relatedly, the Commission is persuaded that operational availability is inherent to the question of deployment. Any proposed incentive mechanisms or other market-based compensation structures should, ideally, consider actual availability and grid value, which must include a commitment to provide energy on specified terms. Also grid value should be considered holistically to include electric transmission grid value for all market segments, and not just siloed benefits to electric distribution.
The Commission also takes no position on the question of a long-term vision for the role of energy storage in Maryland and directs that the Workgroup continue to work on an energy storage program design and recommend a long-term vision consistent with HB910 objectives in its Final Report due October 1, 2024. [ *** ]
