A Review of Energy Storage System Legislation in the US and the European Union

  • Diego A. Tejada-ArangoEmail author
  • Afzal S. Siddiqui
  • Sonja Wogrin
  • Efraim Centeno
Energy Markets (R Sioshansi and A Mousavian, Section Editors)
Part of the following topical collections:
  1. Topical Collection on Energy Markets


Purpose of Review

This paper focuses on the current possibilities for energy storage systems (ESS) to participate in different power system services. ESS can provide multiple services such as spinning reserve, deferral upgrades, and energy management. However, this versatility of ESS poses a challenge for regulators in designing markets where ESS have prominent roles. We assess recent regulatory proposals in the US and the EU in order to understand their implications for ESS.

Recent Findings

These proposals attempt to improve the current rules for efficient ESS deployment. Nevertheless, they have different approaches to the same problem. We discuss these differences in an attempt to shed light on the regulatory debate about ESS ownership and market design.


The successful integration of ESS will depend on proper incentives to provide multiple services without hampering the current market structure. New asset definitions could help to define the roles of ESS as either a generation or a transmission asset.


Energy storage systems Regulatory framework Market design Variable renewable energy sources Asset definition 


Compliance with Ethical Standards

Conflict of Interest

Diego A. Tejada-Arango, Afzal S. Siddiqui, and Sonja Wogrin each declare no potential conflicts of interest. Efraim Centeno reports project funding from Endesa.

Human and Animal Rights and Informed Consent

This article does not contain any studies with human or animal subjects performed by any of the authors.


Papers of particular interest, published recently, have been highlighted as: • Of importance •• Of major importance

  1. 1.
    Haas J, Cebulla F, Cao K, Nowak W, Palma-Behnke R, Rahmann C, et al. Challenges and trends of energy storage expansion planning for flexibility provision in low-carbon power systems – a review. Renew Sust Energ Rev. 2017;80:603–19.CrossRefGoogle Scholar
  2. 2.
    Renewables 2016 global status report [Internet]. Available from: Accessed 04 June 2017.
  3. 3.
    Xie L, Carvalho PMS, Ferreira LAFM, Liu J, Krogh BH, Popli N, et al. Wind integration in power systems: operational challenges and possible solutions. Proc IEEE. 2011;99:214–32.CrossRefGoogle Scholar
  4. 4.
    Lannoye E, Flynn D, O’Malley M. The role of power system flexibility in generation planning. IEEE Power Energy Soc Gen Meet. 2011;2011:1–6.Google Scholar
  5. 5.
    de Sisternes FJ, Jenkins JD, Botterud A. The value of energy storage in decarbonizing the electricity sector. Appl Energy. 2016;175:368–79.CrossRefGoogle Scholar
  6. 6.
    Zhao H, Wu Q, Hu S, Xu H, Rasmussen CN. Review of energy storage system for wind power integration support. Appl Energy. 2015;137:545–53.CrossRefGoogle Scholar
  7. 7.
    Denholm P, Hand M. Grid flexibility and storage required to achieve very high penetration of variable renewable electricity. Energy Policy. 2011;39:1817–30.CrossRefGoogle Scholar
  8. 8.
    White Paper - Grid integration of large-capacity Renewable Energy sources and use of large-capacity Electrical Energy Storage [Internet]. International Electrotechnical Commission (IEC); 2012. Available from: Accessed 07 Oct 2016.
  9. 9.
    Australian Energy Market Operator (AEMO). Initial operation of the Hornsdale Power Reserve Battery Energy Storage System. 2018 Apr p. 9.Google Scholar
  10. 10.
    Ibrahim H, Ilinca A, Perron J. Energy storage systems—characteristics and comparisons. Renew Sust Energ Rev. 2008;12:1221–50.CrossRefGoogle Scholar
  11. 11.
    White Paper - Electrical Energy Storage [Internet]. International Electrotechnical Commission (IEC); 2011. Available from: Accessed 07 Oct 2016.
  12. 12.
    Issue Brief: A Survey of State Policies to Support Utility-Scale and Distributed-Energy Storage. National Renewable Energy Laboratory (NREL); 2016.Google Scholar
  13. 13.
    Strbac G, Aunedi M, Konstantelos I, Moreira R, Teng F, Moreno R, et al. Opportunities for energy storage: assessing whole-system economic benefits of energy storage in future electricity systems. IEEE Power Energy Mag. 2017;15:32–41.CrossRefGoogle Scholar
  14. 14.
    •• Usera I, Rodilla P, Burger S, Herrero I, Batlle C. The regulatory debate about energy storage systems: state of the art and open issues. IEEE Power Energy Mag. 2017;15:42–50 This reference provides a comprehensive review of energy storage regulation considering different aspects such as day-ahead markets, tariffs, capacity mechanisms, and ancillary services. CrossRefGoogle Scholar
  15. 15.
    Rodilla P, Usera I, Herrero I, Sakti A, Batlle C, Miller RA, et al. Energy storage perspectives: challenges, opportunities, and future directions. MIT Energy Initiative and Universidad Pontificia Comillas. 2016. p. 75.Google Scholar
  16. 16.
    Conejo AJ, Sioshansi R. Rethinking restructured electricity market design: lessons learned and future needs. Int J Electr Power Energy Syst. 2018;98:520–30.CrossRefGoogle Scholar
  17. 17.
    U.S. Energy Information Administration. U.S. battery storage market trends [Internet]. Washington, DC: EIA; 2018 May p. 26. Available from: Accessed 01 Dec 2018.
  18. 18.
    • David Hart, Alfred Sarkissian. Deployment of grid-scale batteries in the United States [Internet]. U.S. Department of Energy; 2016 Jun p. 31. Available from: Accessed 01 Dec 2018. In the US context, this reference is a key to understand the rules for energy storage systems in order to participate in the RTO/ISO markets.
  19. 19.
    Chen H, Baker S, Benner S, Berner A, Liu J. PJM integrates energy storage: their technologies and wholesale products. IEEE Power Energy Mag. 2017;15:59–67.CrossRefGoogle Scholar
  20. 20.
    FERC. Electric Storage Participation in Markets Operated by Regional Transmission Organizations and Independent System Operators (Order 841) [Internet]. Federal Energy Regulatory Commission (FERC); 2018 [cited 2018 Nov 30]. Available from: Accessed 30 Nov 2018.
  21. 21.
    FERC. Utilization of Electric Storage Resources for Multiple Services When Receiving Cost-Based Rate Recovery [Internet]. Washington, DC: Federal Energy Regulatory Commission; 2017 Jan p. 25. Report No.: PL17-2–000. Available from: Accessed 04 Oct 2018.
  22. 22.
    Decision on Multiple-use Application Issues [Internet]. Public Utilities Commission of the State of California (CPUC); 2018 [cited 2018 Dec 1]. Available from: Accessed 01 Dec 2018.
  23. 23.
    Bhatnagar D, Currier A, Hernandez J, Ma O, Kirby B. Market and policy barriers to energy storage deployment. Sandia Natl Lab Sept [Internet]. 2013 [cited 2017 Jun 5]; Available from: Accessed 05 June 2017.
  24. 24.
    WIP, CENER. European Regulatory and Market Framework for Electricity Storage Infrastructure. Analysis and recommendations for improvements based on a stakeholder consultation. stoRE Project; 2013.Google Scholar
  25. 25.
    Commission proposes new rules for consumer centred clean energy transition - Energy - European Commission [Internet]. Energy. [cited 2017 Jun 12]. Available from: /energy/en/news/commission-proposes-new-rules-consumer-centred-clean-energy-transition.Google Scholar
  26. 26.
    Lights and shadows for battery energy storage in the Winter Package - 30 November 2016 | Association of European Automotive and Industrial Battery Manufacturers [Internet]. [cited 2017 Jun 12]. Available from: Accessed 12 June 2017.
  27. 27.
    • European Commission. COMMISSION STAFF WORKING DOCUMENT: energy storage – the role of electricity. 2017. This report outlines the role of energy storage in relation to electricity and establishes the main principles to support the market development for energy storage in the EU. Google Scholar
  28. 28.
    Energy - Horizon 2020 - European Commission [Internet]. Horiz. 2020. [cited 2017 Jun 13]. Available from: /programmes/horizon2020/en/area/energy.Google Scholar
  29. 29.
    Strategic Energy Technology Plan - Energy - European Commission [Internet]. Energy. [cited 2017 Jun 13]. Available from: /energy/en/topics/technology-and-innovation/strategic-energy-technology-plan.Google Scholar
  30. 30.
    Ouriachi A, Spataru C. Integrating regional electricity markets towards a single European market. 2015 12th Int Conf Eur Energy Mark EEM. 2015. p. 1–5.Google Scholar
  31. 31.
    EPEX SPOT, GME, Nord Pool, OMIE, OPCOM, OTE, et al. EUPHEMIA Public Description - PCR Market Coupling Algorithm [Internet]. 2016. Available from: Accessed 04 Oct 2018.
  32. 32.
    Usera I, Rodilla P, Burger S, Herrero I, Batlle C. State of the art and open issues in the regulatory debate about energy storage systems. Working Paper. 2017. p. 15.Google Scholar
  33. 33.
    Department for Business, Energy & Industrial Strategy. Contract for difference: Government response to the consultation on changes to the CFD contract and CFD regulations [Internet]. 2017 [cited 2018 Apr 10]. Available from: Accessed 10 Apr 2018.
  34. 34.
    Sioshansi R. Using storage-capacity rights to overcome the cost-recovery hurdle for energy storage. IEEE Trans Power Syst. 2017;32:2028–40.CrossRefGoogle Scholar
  35. 35.
    Zucker A, Hinchliffe A, Spisto A, European Commission, Joint Research Centre, Institute for Energy and Transport. Assessing storage value in electricity markets: a literature review. [Internet]. Luxembourg: Publications Office; 2013 [cited 2017 Jun 5]. Available from: Accessed 05 June 2017.
  36. 36.
    Ministerio de Energía. Establece un nuevo sistema de transmisión eléctrica y crea un organismo coordinador independiente del sistema eléctrico nacional [Internet]. Ley 20936 Jul 11, 2016. Available from: Accessed 13 Sept 2018.
  37. 37.
    IEEE PES. T&D 2018 Super Session: Reality Check on Energy Storage [Internet]. Chicago, Illinois; 2018 [cited 2018 Dec 1]. Available from: Accessed 01 Dec 2018.
  38. 38.
    Enel starts operations in UK at the Group’s first stand-alone battery energy storage system [Internet]. [cited 2018 Oct 4]. Available from: Accessed 04 Oct 2018.
  39. 39.
    The role of storage in grid management [Internet]. [cited 2018 Oct 4]. Available from: Accessed 04 Oct 2018.

Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  • Diego A. Tejada-Arango
    • 1
    Email author
  • Afzal S. Siddiqui
    • 2
    • 3
    • 4
  • Sonja Wogrin
    • 1
  • Efraim Centeno
    • 1
  1. 1.Institute for Research in Technology (IIT), School of Engineering (ICAI)Universidad Pontificia ComillasMadridSpain
  2. 2.University College LondonLondonUK
  3. 3.Stockholm UniversityStockholmSweden
  4. 4.HEC MontréalMontrealCanada

Personalised recommendations