This article discusses the upcoming changes in the electricity industry including electrification, and the drive toward fossil-free generation, and the role of energy storage (ES) in electrification and the operation of a future electric grid without fossil fuels. Though our discussion is primarily focused on the United States electricity system, the issues affecting the operation of future electric grids are global. While the United States is prototypical of other highly developed and energy-intensive countries, variations in renewable energy production and storage, end energy usage, market structure, and policy, among other factors, make each country somewhat unique.

The articles in this special issue focuses on energy storage technologies, with particular emphasis on batteries and energy conversion technologies and applications.

The articles in this special issue focus on the applications and use of energy storage products and services and assesses their economic value for the power system supply industry.

Energy storage is a novel technology with perceived performance and lifecycle risks. In addition, there are many different business/regulatory paradigms for investors in storage resources based on existing business models for electric power assets today. At the heart of designing storage applications for best cost-benefit results and for evaluating storage economics of particular applications is the way different business models realize direct monetized benefits and indirect avoided costs from energy storage. This paper unpacks the complexities of deploying and operating energy storage and identifies any potential barriers to participation in storage. It lays out some of the existing and hypothetical business models for the investment in and operation of electric storage, and explores the complexities and possibilities of these business models when storage is bucketed” as a generation, transmission, distribution, or customer asset. It also identifies possible policy recommendations and areas for further analysis, including some alternative models that consider storage as a unique asset class that offers services offered by other assets today.

In competitive power markets, the independent system operator (ISO/RTO) manages assets and obligations on behalf of owners to meet ISO/RTO goals of reliability, equal access, and market efficiency. Merchant generators make unit commitment decisions, transmission operators receive a regulated payment for transmission assets operated by the ISO/RTO asset manager. Load is scheduled with the ISO/RTO as either price responsive or price taking. As asset managers, the ISO/RTO can benefit from a menu of approaches introduced to identify, measure and manage risks in power systems under uncertain economic conditions. Since competitive markets have introduced new roles for existing participants and new participants to the industry, appetite for these new tools has never been higher. However, applying these new tools has not been without difficulty. In this paper, the authors illustrate three issues facing the ISO/RTO asset manager: 1) planning for reserves in the face of uncertainty; 2) line maintenance which minimizes market disruption; and 3) measuring tradeoffs between investments in reliability and market efficiency. The authors use several approaches and highlight areas for new research using real options,portfolio optimization, and efficiency/reliability tradeoffs in the context of a simple two-bus example. Areas which require more work include the integration of nonpower risks to unit commitment models, applying real options to load variations, using options premiums to compensate out of merit units, using real options to measure transmission decisions, and performance metrics for monitoring dollars spent on reliability and efficiency tradeoffs.