Capacity Accreditation Reforms in US Wholesale Electricity Markets and Implications for Battery Storage Assets

Abstract

The grid is witnessing unprecedented transitions with rising variable renewable energy, increase in electricity demand from data centers and electric vehicles, changing weather patterns, and the increasing duration and frequency of extreme weather events. This has led to the need for reforms in how US wholesale electricity markets assess the contribution of different generation technologies to grid reliability (called ‘capacity accreditation’). In this study, we explore the capacity accreditation reforms occurring in four US wholesale electricity markets namely, PJM, ISO-NE, MISO, and SPP. We then develop a power systems model to forecast the contribution to reliability (‘capacity value’) of battery storage assets in PJM over the next 20 years. Based on our findings, we highlight market opportunities for our client, Lightshift Energy.