Federal Energy Regulatory Commission (FERC) Order 841

Definition

FERC Order 841 is a regulatory directive established by the Federal Energy Regulatory Commission aimed at facilitating the participation of energy storage resources in the wholesale electricity markets. This order recognizes the potential of energy storage technologies to enhance grid reliability, promote competition, and provide ancillary services, thereby allowing storage systems to compete on a level playing field with traditional generation resources.

5 Must Know Facts For Your Next Test

1. FERC Order 841 was issued in February 2018 and mandates that regional transmission organizations (RTOs) and independent system operators (ISOs) revise their market rules to allow energy storage to participate fully in energy markets.
2. The order aims to remove barriers that previously limited energy storage's ability to provide services like frequency regulation and capacity support.
3. FERC Order 841 emphasizes the need for cost-effective integration of energy storage into existing electricity market structures.
4. The directive is seen as a critical step toward achieving a more flexible and resilient electric grid in response to increasing renewable energy generation.
5. By recognizing the unique capabilities of energy storage, FERC Order 841 helps promote innovation and investment in emerging technologies within the energy sector.

Review Questions

• How does FERC Order 841 impact the ability of energy storage systems to compete in wholesale electricity markets?
  • FERC Order 841 significantly enhances the competitiveness of energy storage systems by requiring regional transmission organizations and independent system operators to revise their market rules. This allows energy storage resources to participate fully alongside traditional generation assets, enabling them to provide essential services such as frequency regulation and capacity. By leveling the playing field, the order encourages innovation and investment in energy storage technologies.
• What specific barriers did FERC Order 841 aim to address regarding energy storage participation in electricity markets?
  • FERC Order 841 sought to address various barriers that limited energy storage's participation in electricity markets. These included restrictive market rules that favored traditional generation sources over storage, inadequate recognition of the unique operational characteristics of storage technologies, and lack of access to certain market services. By mandating RTOs and ISOs to revise their rules, the order ensures that energy storage can compete effectively, promoting a more dynamic and resilient electricity market.
• Evaluate the broader implications of FERC Order 841 on the future of energy policy and grid modernization efforts in the U.S.
  • FERC Order 841 holds significant implications for the future of energy policy and grid modernization in the U.S. By facilitating the integration of energy storage into wholesale markets, it supports the transition toward a more flexible grid capable of accommodating high levels of renewable energy. The order also signals a shift in regulatory attitudes towards innovative technologies, potentially influencing future policies related to clean energy deployment, reliability enhancements, and climate goals. This proactive approach could encourage further investment in advanced technologies and drive systemic changes across the electricity sector.

Related terms

Energy Storage: Technologies that capture and store energy for use at a later time, including batteries, pumped hydro, and thermal storage.

Ancillary Services: Support services necessary to maintain the reliability of the electricity grid, including frequency regulation, voltage support, and reserve services.

Wholesale Electricity Market: A market where electricity is bought and sold in bulk, often involving transactions between generators and retailers or large consumers.