As renewable penetration hits 33% globally in 2023, storage capacity payment mechanisms emerge as the linchpin for grid stability. But why do 68% of utilities still treat storage as ancillary infrastructure rather than a primary grid asset? The answer lies in outdated market structures struggling to value temporal energy shifting.
When New York's grid operator set the $50/kW-year capacity payment benchmark, did they strike the right balance between utility economics and consumer protection? This figure – equivalent to $4.17/kW-month – anchors the NYISO's Installed Capacity (ICAP) market, but recent blackout risks suggest recalculations might be overdue. With 2023 summer peak demand hitting 31,902 MW (a 4.7% YoY increase), the system's capacity payment mechanisms face unprecedented stress.
As global electricity demand surges 25% faster than grid upgrades since 2020, capacity market procurement emerges as the linchpin for power system stability. But here's the kicker: Why do 68% of utilities still struggle with resource adequacy despite established market mechanisms?
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