Power & Pipes

FERC, CFTC, and State Energy Law Developments

A recent grid reliability report issued by staff members of the Offices of Electric Reliability and Enforcement within FERC evaluating the upcoming operating season underscored the changing generation resource mix in the United States and its implications for grid operations.

The report, Summer 2019 Reliability and Energy Market Assessment, is the latest in a series of high-level summaries of anticipated seasonal reliability challenges issued by FERC staff. The seasonal reports typically discuss electric and gas markets, energy trends, and how recent developments may influence market outcomes. In particular, the latest report notes that approximately 6.7 GW of generating capacity will be operational in the short term, driven primarily by a continued increase in natural gas, wind, and solar resources. The report notes that in every region except the Electric Reliability Council of Texas (ERCOT), reserve margins are expected to meet their planning reserve margins. In ERCOT, the report suggests a risk that Energy Emergency Alerts may be needed, which allows ERCOT to take certain actions to mitigate capacity shortages.

The report also forecasts a potential decline in solar and wind capacity growth in the coming years due to the loss of tax credits for such projects. While those tax credits are an important driver for renewable projects, the report acknowledges that lower component and project deployment costs may offset the loss of any tax benefits and continue to support renewable generation growth.

Relevant to battery storage, the FERC report underlines the significant growth within that sector, explaining that while there was approximately 100 MW of battery storage online in 2013, 744 MW has been added since 2015. The report suggests that this continued expansion may be encouraged by FERC’s Order No. 841.