California's Electricity Market Embraces Bid Cost Recovery for Energy Storage Growth
California's electricity market is witnessing a growing significance of bid cost recovery (BCR), a mechanism crucial for energy storage systems. This shift has been highlighted by Ovais Kashif, the US power market analyst at Modo Energy.
BCR was initially designed to safeguard gas generators from operating at a loss by following California Independent System Operator's (CAISO's) instructions. However, its role has evolved to become a vital settlement mechanism for energy storage systems in the state's market.
Kashif, an expert in the field, has noted this change. He explained that BCR ensures energy storage systems can recover their costs, making them more viable and attractive to investors. This, in turn, promotes the growth of renewable energy sources, as energy storage is integral to their integration into the grid.
The increasing importance of BCR in California's electricity market reflects a shift towards more sustainable energy sources. By supporting energy storage systems, BCR encourages investment in renewable energy, contributing to a cleaner and more resilient power grid.
