FERC Order 841

Definition

FERC Order 841 is a regulation issued by the Federal Energy Regulatory Commission aimed at enhancing the participation of energy storage resources in wholesale electricity markets. It requires regional transmission organizations and independent system operators to remove barriers to entry for these resources, ensuring they can provide services like energy arbitrage and ancillary services, which are essential for grid stability and efficiency.

5 Must Know Facts For Your Next Test

1. FERC Order 841 was issued in January 2018 as a part of efforts to modernize the electricity grid and accommodate new technologies.
2. The order mandates that energy storage resources must be treated as a resource comparable to traditional generation sources in market rules.
3. It requires transmission organizations to develop market participation models for storage resources to ensure they can compete fairly.
4. One of the primary goals of FERC Order 841 is to promote energy arbitrage, allowing storage systems to charge during low-demand periods and discharge during peak demand.
5. FERC Order 841 also emphasizes the importance of integrating energy storage into ancillary services, which helps maintain grid reliability and resilience.

Review Questions

• How does FERC Order 841 facilitate the integration of energy storage into wholesale electricity markets?
  • FERC Order 841 facilitates integration by requiring regional transmission organizations to eliminate barriers that prevent energy storage resources from participating fully in wholesale markets. This includes ensuring that storage systems can provide services like energy arbitrage and ancillary services on equal footing with traditional generation. By mandating that these resources are recognized and compensated appropriately, FERC Order 841 encourages their deployment and enhances overall grid flexibility.
• What implications does FERC Order 841 have for the provision of ancillary services in the electric grid?
  • FERC Order 841 has significant implications for ancillary services by recognizing energy storage as a critical resource for maintaining grid reliability. With storage systems able to respond quickly to changes in demand and provide essential support services like frequency regulation and backup power, they can enhance the overall stability of the grid. The order ensures that storage resources are compensated for these services, thereby promoting their development and integration into existing market structures.
• Evaluate the potential long-term impacts of FERC Order 841 on the evolution of energy markets and grid management.
  • The long-term impacts of FERC Order 841 on energy markets and grid management could be transformative. By removing barriers for energy storage participation, it sets the stage for a more flexible and responsive grid that can integrate renewable energy sources more effectively. This evolution could lead to enhanced reliability, reduced costs for consumers, and increased adoption of clean energy technologies. Additionally, as energy storage becomes a vital component of grid management, it may drive innovation in other areas such as demand response and decentralized energy systems, further reshaping the future of how we generate and consume electricity.

Related terms

Energy Storage System: A technology that stores energy for later use, allowing for the balancing of supply and demand in the electricity grid.

Wholesale Electricity Market: A market where electricity is sold in bulk, typically to utility companies or large consumers, often involving competitive bidding processes.

Ancillary Services: Support services necessary to maintain the reliability of the electric grid, including frequency control, voltage support, and backup power.