Battery Energy Storage Systems (BESS) are on track of becoming an integral component of electricity markets around the world. Although investments for grid scale BESS are still at relatively low levels of US$3 billion per year, they are expected to rise substantially over the next decades. Historically, storage (mainly hydro pumped storage) was regarded as a generation asset by regulators and policymakers. New generation BESS technologies now offer a high degree of flexibility, which sees them offering ancillary services (reserves) in those markets where they are operating. With such an important role to play for grid stability, should BESS assets be considered network assets and be regulated as such? Or should BESS operators be allowed to participate in wholesale and secondary markets as any generator would? Answering these questions can help policymakers and regulators in prioritising the role BESS ought to play in power systems: reducing price volatility, offering reserve services or alleviating network congestion. READ ECA’s INSIGHT HERE.
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