By Diane Cherry
PJM’s market design doesn’t adequately account for state-of-charge management or the value of preserving stored energy across multiple market products. Battery projects leave revenue on the table — not ideal in the current market where margins are tight.
Energy storage has never mattered more to grid reliability. But understanding the market is just as important as understanding the technology.
For developers eyeing the PJM market — the largest wholesale electricity market in North America — the path from promising project to bankable investment is far from straight. Success requires understanding not only how PJM’s markets compensate storage, but also where those market signals fall short.
Storage provides significant reliability, flexibility and operational value to the grid, yet PJM’s market design limits and political uncertainty often prevent those services from being fully valued.
PJM recently closed the application window for the first cycle under its reformed interconnection process, illustrating both the opportunity and the competition. PJM announced that 811 new generation projects, representing approximately 220 GW of capacity, submitted interconnection requests in the first cycle under its reformed interconnection process.
Storage accounted for 349 of those projects — more than any other technology — highlighting the industry’s rapid growth potential. The storage development pipeline is robust, but converting projects into financed, operating assets depends on market rules that provide sufficient and predictable revenue.
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