Capacity compensation for energy storage projects

What changes have been made to the recognition of energy storage systems?

This modification introduces significant changes in the recognition and compensation of energy storage systems and hybrid plants with storage capacity. Recognition of capacity for storage and energy projects Since 1982, the Chilean market has recognized capacity payment for plants that contribute adequacy to the electrical system.

What is a recognition of capacity payment?

Recognition of capacity payment for pure or “stand-alone” storage, i.e. those storage facilities not associated with generation plants. In the case of hybrid plants (i.e., generation and storage facilities), the recognition of capacity will be made separately between the generating unit and its storage component.

How does the CNE regulate storage in capacity payment?

The CNE (National Energy Commission) regulates the majority of the parameters used to calculate the capacity payments through successive short-term node price decrees and the technical standards issued by that body. Modifications introduced by DS 70 for recognizing storage in capacity payment The main modifications are as follows:

What is the capacity payment mechanism?

The capacity payment mechanism, regulated by DS 62 and unchanged by the new regulation, establishes that this is determined by each plant's contribution to system reliability, its availability during periods of peak demand, and the general needs of the electrical system to maintain an adequate reserve margin.

How is the capacity payment determined?

The capacity payment for all generating units, including storage, is determined based on the most efficient technology capable of providing energy during peak demand, generally represented by diesel units due to their ability to rapidly increase production and meet demand.

What is energy storage incentive mechanism?

Energy storage incentive mechanisms Compound real options Investment decision Social welfare theory 1. Introduction Due to fossil energy shortages and climate change, it has become essential to develop renewable energy (RE), reduce CO2emissions, and transform the energy system into one using a low amount of carbon .