Battery Energy Storage Systems (BESS) as a CAISO Non-Generator Resource (NGR): 7 Things You Should Know
CAISO Market Participation Alternatives for Batteries
Most Battery Energy Storage Systems (BESS) connected to the California grid have participated in a behind the meter (BTM) configuration. This approach enables BESS owners to manage their retail energy costs, which include peak load shaving, load shifting, and demand charge management. Unfortunately, these are not wholesale market transactions.
Moreover, some BESS resources also participate in CAISO Demand Response Programs (by reducing the metered load) and bid into the market as Proxy Demand Resources (PDRs). Although this provides additional opportunities for BESS owners, participation is limited and requires the use of a unique methodology to create the settlement meter values. The baseline calculation used is called the Meter Generator Output. This calculation takes advantage of a BTM battery system that is separately metered. Sadly, participating as a PDR does not offer all of the CAISO market services a normal generator can provide.
In response to these conundrums, the Non-Generator Resource (NGR), modeled within the CAISO network, seeks to take advantage of the unique characteristics of a BESS. This is crucial, as NGR resources can participate in all Ancillary Services products offered in the CAISO market.
With this in mind, the following are 7 things you should know about NGRs!
- The Definition of a Non-Generator Resource:
The CAISO Tariff, Appendix A, defines NGRs as resources that operate as either Generation or Load. They can be dispatched to any operating level within their entire capacity range but are also constrained by an MWh limit to (1) generate energy, (2) curtail the consumption of energy in the case of demand response, or (3) consume energy.
- NGRs are Specifically Modeled in the CAISO Network:
An NGR is modeled in a manner that allows it to be dispatched by the market to any operating level. They must operate within a continuous generating range from a negative PMin to a positive PMax (e.g. from -2 MW to +2MW).
- NGRs can Participate in the Ancillary Services Market:
NGRs can fully participate in the Ancillary Services (AS) Market. The NGR can earn capacity and energy payments for AS services, including spinning reserves, non-spinning reserves, and regulation. The NGR is treated like any generating resource so all requirements for certification, testing, metering, telemetry, and compliance apply.
- NGRs under Regulation Energy Management:
CAISO created a unique function, Regulation Energy Management (REM), as an option for NGRs. This option allows NGR resources to bid their capacity more effectively into the ISO’s regulation market. REM allows for the resource to submit a Regulation Bid for capacity (MW) of up to four (4) times the maximum energy (MWH) the resource can generate or curtail for fifteen (15) minutes after issuance of a dispatch instruction.
Use of the REM does limit the availability of AS services the NGR can bid. Only Regulation Up and Regulation Down may be bid. However, CAISO, through the market dispatches, will manage the battery’s state of charge.
An NGR, via their Scheduling Coordinator, may declare to be a Non-REM or a REM NGR.
- NGRs as Compared to Demand Response Resources in a Handy Tool:
It is often difficult to identify the differences in how the CAISO rules and policies treat different resource types. This is especially true for a BESS, which can participate as an NGR, PDR, or even a distributed energy resource. Fortunately, there is comparison table posted on the CAISO website. This “Participation Comparison Table for Proxy Demand, Distributed Energy Resource Provider, and Storage” is an excellent reference and can be found on the Demand Response Load participation page of the CAISO website at the link below:
This table also contains links to applicable Business Process Manuals (BPM) and Technical Requirements.
- NGRs Require Certification:
NRGs, like any other generator, must meet the AS certification requirements. The following links will eliminate the need to navigate through the CAISO website in search of the appropriate requirements: Tariff Section Section 8.3.4 and Part (A) App K.
- NGRs’ Metering, Telemetry, and Dispatching:
NGRs that are participating in the Energy Market only do not require telemetry if their capacity is less than 10 MW. However, for AS participation, telemetry is required, as well as the ability to receive market dispatches through the Automated Dispatch System (ADS). Although NGRs can be Scheduling Coordinator Metered Entities, participation in the Regulation Market requires all resources be CAISO Metered Entities.
A Trusted Partner
Trimark has long partnered with NGRs, and supports them by providing required metering, telemetry, and ADS equipment installation and maintenance. Contact us today to discuss solutions for your Non-Generating Resource needs.