FERC staff releases white paper on hybrid resources, seeks feedback

June 5, 2021

by Peter Maloney
APPA News
June 5, 2021

Staff at the Federal Energy Regulatory Commission (FERC) on May 26 issued a notice inviting comments on hybrid resources, such as solar power combined with energy storage, and, at the same time, released a white paper on the subject.

The deadline for submitting comments to FERC is Aug. 18, 2021.

The white paper discusses the hybrid resources technical conference FERC held in July 2020, as well as the information garnered from comments.

Interest in hybrid resources has accelerated in recent years, in part because of recent growth in electric storage resources, the white paper noted.

Hybrid resource deployment has increased in both Regional Transmission Organization (RTO) and Independent System Operator (ISO) and non-RTO/ISO regions, with growth concentrated in certain areas, most notably in the California Independent System Operator Corporation (CAISO) region, according to the white paper.

As recently as two years ago, there were virtually no hybrid resources in interconnection queues, and there are now 102 gigawatts (GW) of solar paired with storage, and 11 GW of wind paired with storage in interconnection queues across the country, including both RTO/ISO regions and non-RTO/ISO regions, the FERC paper said.

The white paper cited comments from the American Wind Energy Association (AWEA) stating that 10 percent of resources in RTO/ISO interconnection queues nationwide are hybrid projects.

In California, CAISO reports that 47.6 percent of active interconnection requests are for hybrid resources. For requests submitted to CAISO in 2020, the number rises to 58 percent.

The vast majority of announced hybrid projects are solar photovoltaic (PV) combined with battery electric storage, but project developers have also announced wind combined with electric storage, natural gas-fired generation combined with electric storage, and solar power combined with wind and electric storage projects, the white paper said.

Citing data from Lawrence Berkeley National Laboratory, the white paper noted that solar combined with energy storage made up about 85 percent of the capacity of hybrid resources in the interconnection queues nationwide at the beginning of 2020.

In its definition of “hybrid,” the white paper included co-located resources that are modeled and dispatched as two or more separate resources that share a single point of interconnection and integrated hybrid resources that share a single point of interconnection and are modeled and dispatched as a single resource.

One driver of the increase in hybrid resources is that some configurations allow the electric storage component to qualify for increased financial incentives, including the federal Investment Tax Credit and certain state incentives for electric storage resources that charge from renewable resources, the white paper said.

Those incentives, combined with the potential for wholesale market revenues could attract further investment in hybrid technologies and projects, potentially leading to increased competition and market efficiency, the white paper said, noting that at the beginning of 2020, the six RTOs and ISOs under FERC jurisdiction had more than 62 GW of hybrid projects in their interconnection queues.

FERC noted that in comments several participants emphasized the need for flexibility at all stages of the co-located hybrid and integrated hybrid project lifecycle, including with respect to whether a hybrid project will operate as a single or multiple resource type, changes during the interconnection process, and assessing how the resource can operate in the market most economically.

FERC also noted that some commenters stressed the need for hybrid resources to be able to provide all services that they are capable of providing and said that market power mitigation approaches may need to be modified.

In its analysis in the white paper, FERC said the record in its hearings to date demonstrate “co-located hybrid and integrated hybrid resources can add value to the electric grid” by allowing intermittent or duration-limited resources to achieve a higher combined capacity factor, facilitate more efficient transmission system operation by reducing congestion and curtailment in areas with high penetrations of intermittent resources, and provide transmission providers with more controllable ancillary services than standalone intermittent resources. Combining resource types also allows for the sharing of permitting, siting, equipment, and interconnection costs.

Nonetheless, FERC noted that the rapid growth of hybrid resources presents challenges to RTOs and ISOs and other FERC-jurisdictional transmission providers and federal and state regulators to keep up with the pace of technological change. And while RTOs and ISOs have begun to make changes to their wholesale electric markets, much remains to be addressed, FERC said in the white paper.

With additional experience RTOs, ISOs and transmission providers “will be better able to address issues including a potential need to modify interconnection rules, modeling approaches in interconnection and reliability models, market participation rules such as bidding and modeling, and capacity valuation methods,” FERC said.

The notice seeking comments is available here.