FERC Order No. 2222: Facilitating DER Participation in Electricity Markets

Overview

FERC Order No. 2222: Issued by the Federal Energy Regulatory Commission (FERC) in 2020, updated in 2021.
Objective: Enable distributed energy resources (DERs) to participate in electricity markets run by regional grid operators.
DERs Examples: Electric battery storage, rooftop solar panels, smart thermostats, energy efficiency measures, thermal energy storage, electric vehicles.
Aggregation: Combining multiple small DERs into a single bundle for market participation.

Potential Participants: Individuals with installed or planned solar panels, battery storage, smart thermostats, or electric vehicle chargers.
Opportunities: Earn money by participating in electricity markets through aggregations.
Requirements: Live in areas with RTOs/ISOs (excluding Texas ERCOT, which is outside FERC jurisdiction).

FERC: Independent federal agency regulating wholesale electricity sales, interstate energy transmission, and licensing energy projects.
Wholesale vs. Retail: Wholesale involves selling electricity to utilities, whereas retail involves utilities selling to end-users.

RTOs: Non-profit organizations operating transmission lines, managing regional electricity markets.
Markets: Include energy, capacity, and ancillary service markets.
Goal: Facilitate DER participation and competition in RTO markets.

Reducing Barriers: Allow small DERs to meet market size and performance requirements through aggregation.
Barriers: Market rules designed for traditional large-scale resources, not DERs.

RTO Compliance: Required to submit proposed rule changes to FERC for approval.
Challenges: Geographic aggregation, simultaneous retail and wholesale participation, accurate metering and compensation.

Entities Involved: For-profit, non-profit, local governments, and utilities may offer aggregation services.
Existing Programs: Participation in current programs (e.g., solar net metering) may influence eligibility.