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Can storage participate in the organised markets as a transmission asset?

Rao Konidena's picture
Independent Consultant, Rakon Energy LLC

Rao Konidena found Rakon Energy LLC because Rao is passionate about connecting clients to cost-effective solutions in energy consulting, storage, distributed energy resources, and electricity...

  • Member since 2014
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  • Jun 8, 2021

MISO is the first RTO to get FERC approval for Storage As a Transmission Only Asset (SATOA).


Now, the question in front of MISO Market Sub Committee and energy storage community is, can storage participate in energy markets if qualified as a transmission asset?


I would think we want a Swiss Army like asset to participate in as many markets as possible including as a transmission asset. What do you think?

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This is a hugely complex question with an equally complex answer. I will provide some information resources and quotes from those resources. Furthermore I will only do so from the perspective of CAISO. 

The first document, linked below is "Energy Storage and Distributed Energy Resources –
Storage Default Energy Bid." Note that this is a "Final Proposal." I searched and could not find a final document. It could be that this has not been released yet, or it is incorporated into another document.

Two quotes from this document:

From the Executive Summary:

The default energy bid for storage resources proposed by the ISO is more complex than most other default energy bids that the ISO currently employs. These default energy bids include three components: 1) the cost to purchase energy, 2) the variable costs to charge and discharge energy, and 3) the opportunity cost to ensure that the limited amount of energy stored in the resource is not discharged prior to the hours with the highest price potential.

And from Section 3, Storage resource default energy bid

To ensure that wholesale prices are just and reasonable, the CAISO and other organized markets have mitigation measures to minimize the exercise of market power and non-competitive outcomes. The CAISO employs a tool called local market power mitigation (LMPM), which replaces market bids with marginal cost based default energy bids (DEBs) when it detects potential market power. The local market power mitigation tool helps to ensure that market prices are economic in uncompetitive situations. With the implementation of this proposal storage resources will be subject to local market power mitigation. They will also have a new option for default energy bids specifically designed for storage resources.

Today, there are about 550 MWs of grid-connected storage resources installed on the system. Further, the ISO anticipates that about 1,500 MW will be installed by the conclusion of 2021 and that similar amounts of new storage will be connected to the grid in subsequent years. This number does not include behind the meter storage resources installed in households or businesses not participating in the wholesale markets. None of these storage resources are currently subject to market power mitigation, and the CAISO believes that it is important to develop mitigation measures to manage market power given the rapidly growing number and influence of energy storage resources.

Storage resources can be versatile and have various opportunities to earn potential revenues in the CAISO day-ahead and real-time market. Some of these opportunities include arbitraging energy market prices and potentially moving large amounts of energy from low priced periods to high priced periods in the day to help with renewable integration. These resources are also generally flexible and have fast ramping capabilities to offer ancillary services to the market. Balancing potential revenue streams, in addition to potential fixed payments through the resource adequacy framework, can be challenging for certain storage resource types given their cost structure. Understanding the economics of the underlying resources are important when considering the design of a default energy bid.

Another resource is a series I posted on CAISO a few years ago. This is the last section, which contains links and descriptions of the other sections, and a Glossary. Since this was posted in 2018, Storage was not really an issue then, but these may help you navigated the complexities of the ISO.


Rao, I agree battery storage is a great asset. It is growing faster than any power source or transmission . It is the Holy Grail of the GRID .  It can totally answer the peaker power problems. It can replace any transmission growth and do it faster and at lower cost.

   Storage like the Tesla Power Packs and Mega Packs are being added all over the world.  The cost and long life is getting better by the year. New systems are dropping to half the cost of last years systems. The growth is amazing just like the results. 

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