California hits 5GW battery storage milestone

The California Independent System Operator (ISO) has announced that the state now has more than 5GW of battery storage capacity online and “fully integrated into the electrical grid”. 

This represents enough capacity to power approximately 3.8 million homes for up to four hours before the batteries need to be recharged, the ISO said.

It added that the 5GW total represented a ten-fold increase increase in capacity since the summer of 2020.

The California ISO has highlighted how batteries’ state-of-charge must be constantly monitored and verified to ensure power is available when needed. “That requires market rules specifically designed to accommodate the behaviour of a resource that was not part of the state’s energy portfolio just a few years ago,” a statement said.

Pricing principles for battery storage resources are also fundamentally different, explained Gabe Murtaugh, storage sector manager in the ISO’s market design group. “A storage resource owner cares about the difference between the price energy was purchased at and the price energy was sold at, and not the specific price of the resource at either time,” said Murtaugh. “In the future, when storage resources may often set prices, energy markets may need to set prices based on this ‘spread,’ which is very different from how markets function today.” 

Murtaugh added: “Building tools to accommodate storage in our markets required significant modelling and software enhancements, which the ISO teams began work on years before significant storage capacity was built and functioning on the grid. That was challenging because it meant developing a model for a resource that really was not participating on the grid at the time. Our teams have also had to evolve these models as the needs of storage operators have become better defined through actual market participation.”

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