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Electricity Markets and Long-Duration Energy Storage: A Survey of Grid Services and Revenue Streams

Purpose of Review Long Duration Energy Storage (LDES) is increasingly viewed as a potential resource for providing grid services that enhance the stability and flexibility of electricity systems. While some LDES services are integrated into existing market frameworks, traditional mechanisms may not fully account for their operational characteristics, potentially leading to undervaluation. Within this context, this paper reviews the literature and industry practices to assess potential grid services for LDES, evaluates existing compensation mechanisms, and identifies challenges to full market integration. Recent Findings We first review existing literature and identify key grid services unique to LDES, including enhancing grid resilience during extreme weather events, enabling long-term energy shifting, and providing flexible and firm energy in systems with limited dispatchable resources. Here, we also review how LDES services are compensated in current market frameworks and the challenges associated with the full realization of LDES values. Additionally, we summarize market mechanisms for storage technologies across U.S. wholesale markets. We find that some markets are adjusting incentive structures, such as incorporating storage duration in capacity accreditation, to better align with system needs and LDES contributions to the grid. However, further refinements in capacity remuneration and dispatch timeframes may be needed for more effective realization of LDES value. Summary This review evaluates potential grid services for LDES, examines existing compensation mechanisms for LDES technologies, and identifies gaps between these mechanisms and LDES operational characteristics. The review concludes by outlining potential market enhancements for more effective LDES integration and articulating additional research needs to support its efficient participation in future power systems.

Flexible resources

Scaling Demand Flexibility: Building on 30 Years of Energy Efficiency Success

With electricity consumption across the United States (US) and Canada anticipated to grow, energy efficiency program administrators have a key role to play in helping to ensure energy affordability and reliability in support of the broader economic systems utilities and grid support. Connected, demand side load balancing solutions, such as load shifting heating, ventilation and air conditioning (HVAC) systems and managed charging for electric vehicles (EVs), can dynamically manage energy, allowing for more volumetric electricity consumption without incurring the expense of upgraded transmission and distribution capabilities. When combined, or aggregated, many small loads can be managed to have meaningful impact on energy demand on the grid. Utilities and their partners have an opportunity to leverage decades of experience and the infrastructure needed to assess, design, implement, and measure programs to scale up the adoption of equipment with built-in load flexibility capabilities. Current efforts among a wide variety of electricity system service providers, utilities, standards agencies, regulators, national labs and private industry stakeholders aim to identify common standards, metrics, and methodologies for valuing grid services offered by demand side equipment. By combining those efforts with decades of proven energy efficiency resources, utilities are poised to effectuate a scaling up of equipment with energy management capabilities installed in homes and businesses across the US and Canada. This paper will provide an overview of how utilities are approaching this era of load growth and new peak demands across the United States and Canada. It will highlight the specific strategies that program administrators are employing to advance market transformation for grid-enabled products and devices that have the greatest potential to reduce energy use and increase load flexibility.

Grant, Peter

Field Validation of a Grid-Interactive Efficient Building Software Solution

The U.S. General Services Administration's (GSA's) Green Proving Ground (GPG) program, in partnership with the National Laboratory of the Rockies (NLR), completed a field study of a Grid-Interactive Efficient Buildings (GEB) software solution. The study focused on a single testbed facility to test the GEB functionality of the software solution, along with other features. The testbed facility - a courthouse - is a common building type in GSA's vast building portfolio, offering potentially impactful findings on a scalable level. The study evaluated Prescriptive Data's technology, Nantum OS, a connected building operating system ("GEB Solution") which aggregates multiple sources of previously siloed building data and combines that data with external sources, such as weather information or utility signals, into a single integrated platform. A GEB Solution is a type of Energy Management Information System (EMIS). EMIS is defined as a system of devices, data services, and software applications that communicates with any building system or third-party data source to aggregate and transform data into new capabilities to aid in the optimization of energy use at the building, campus, or agency level. This specific GEB Solution is an EMIS with ASO, automated system optimization, offering supervisory control of certain aspects of the Building Automation System (BAS). Multiple features were evaluated including, but not limited to, Continuous Demand Management to avoid setting new monthly kilowatt (kW) peaks, energy efficiency for reduction of kilowatt hours (kWh) and natural gas consumption, and automated demand response (ADR) for purposes of lowering demand during a utility called Demand Response (DR) event. The testbed facility was the Foley Federal Building and US Courthouse ("Foley Federal Building") located in Las Vegas, NV. This is a 209,496 sq. ft. building constructed in the 1960s with major renovations in 2004. The facility was a good candidate due to the large prevalence of office and courthouse spaces in the GSA portfolio of buildings. It also has many features which allow integration into and control of the building and a strong facilities team to assist with the study. Quantitative and qualitative performance objectives were developed using GSA's GPG GEB project template along with input from the vendor and building facility staff; these are outlined in Table 1. The quantitative performance objectives focused on continuous demand management, energy efficiency, and automated demand response. The qualitative performance objectives focused on the ease of installation and commissioning as well as the operability of the GEB solution. Other performance metrics that are reported on include carbon reduction, cost effectiveness, and occupant acceptance.

32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATI

Integrating AI Data Centers with the Power Grid

The rapid expansion of artificial intelligence (AI) has triggered an unprecedented surge in electricity demand, with US data center energy use projected to double or triple 2023 levels by 2028. This exponential growth places strain on grid infrastructure, which can hinder timely construction of desired computing capacity. To bridge this supply-demand gap, utilities and AI developers are increasingly turning to demand flexibility, a strategy that incentivizes shifting or reducing power use during peak periods of grid stress. Data centers are uniquely equipped for flexible operations due to their digital workloads, built-in redundancy, and onsite energy assets. This article outlines four primary mechanisms to enable data center flexibility: computational load flexibility (shifting tasks temporally or geographically), flexible use of core facility infrastructure adjustments, energy storage utilization, and onsite electricity generation. To encourage adoption, utilities are deploying new tariff designs, including voluntary interruptible service riders, mandated flexibility requirements, and streamlined interconnection processes for flexible loads. For the highly capitalized and rapidly growing AI industry, the primary motivators for embracing these strategies are expediting facility interconnection, satisfying emerging regulatory mandates, and mitigating community resistance. While demand flexibility cannot substitute the long-term need for new bulk power generation, it serves as an essential, immediate solution for enabling near-term deployment. By transforming data centers from grid stressors into stabilizing assets, flexible operations can ensure reliable grid integration, ease market pressures, and support a resilient power system.

24 POWER TRANSMISSION AND DISTRIBUTION

A review of United States energy-only generator interconnection service policy and considerations for reform

Grid interconnection has emerged as a significant obstacle to the development of new electricity resources. There is growing interest in energy-only interconnection, which is an interconnection service option meant to allow the interconnection of new generators without ensuring their energy deliverability during all hours through the transmission system to customers. This approach potentially avoids upfront congestion-related transmission upgrades but could increase curtailment risk. Interest in energy-only interconnection is shaped by incomplete understanding of how interconnection policy functions in different jurisdictions, a knowledge gap that makes it difficult to determine how energy-only interconnection might be better used or re-designed. In this paper, we provide a regulatory review of energy-only interconnection in U.S. interconnection policy and practice, identifying jurisdictions in which rules are close to -or farther from-the theoretical concept of energy-only interconnection service. We find substantial jurisdictional differences in how energy-only interconnection is implemented, driven by differences in resource adequacy frameworks, real-time transmission operations, and state-level procurement practices. U.S. regulators have preferred local jurisdictional flexibility over federal prescription of interconnection study methods and procedures, which also contributes to differences among regions. Such findings raise fundamental questions about whether competition policies in electricity markets should extend beyond spot energy markets and into more prescriptive guidelines around interconnection rules and market entry. This paper sheds light on tensions that energy-only interconnection raises in allowing generators to access the transmission system on an as available basis and discusses how controlling thresholds for congestion-related network upgrades may be a barrier to electricity market entry.

Gorman, Will

Techno-Economic Evaluation of a 600MW Pumped Storage Hydropower Plant using the Pumped Storage Hydropower Valuation Tool

This paper presents a techno-economic evaluation of the proposed 600 MW, 8-hour Craig – Hayden pumped storage hydropower project using the U.S. Department of Energy’s Pumped Storage Hydropower Valuation Tool. The analysis integrates plant technical characteristics, regional grid conditions, and market-based operating assumptions to quantify stacked value streams from energy arbitrage, capacity, ancillary services, transmission congestion relief, and reliability. Both price taker and price influencer frameworks are applied to examine the impact of market participation and system interactions on lifecycle economic performance using Benefit - Cost Analysis and Multi - Criteria Decision Analysis. The results show that the price taker approach provides higher revenue estimates based on exogenous price signals, while the price influencer approach captures production cost savings, renewable curtailment reduction, and market price formation, yielding more conservative but system-representative outcomes. The study demonstrates the strategic value of long-duration PSH for enhancing operational flexibility, resource adequacy, and grid reliability in a high-renewable Western Interconnection.

Bhattacharyya, Arjun [ORNL] (ORCID:000900060976046

EXERGETIC: De-Risking Next-Generation Resilient Geothermal Hybrids via At-Scale Evaluation Using Virtual Emulation Digital Twin Environment for Efficient Operation

The DOE-GTO-funded project, award number 5.1.2.12, entitled "EXERGETIC - De-risking Next Generation Resilient Geothermal Hybrids via at-Scale Evaluation Using a Virtual Emulation Digital Twin Environment for Efficient Operation," advances the solution to these challenges by developing and validating a geothermal co-emulation environment implemented at the National Laboratory of the Rockies (NLR)'s Advanced Research on Integrated Energy Systems (ARIES) platform. This framework enables the de-risking of next-generation geothermal and geothermal hybrid systems through high-fidelity modeling, real-time digital emulation, advanced control strategies, and techno-economic assessment. The project focused on geothermal hybrid configurations that integrate geothermal power plants with concentrated solar power and underground thermal energy storage, enabling enhanced efficiency, flexibility, and grid support capabilities. The main goal of this project was the development of a geothermal digital co-emulation environment to demonstrate the technical and economic value of geothermal hybrid systems and their contribution to grid stability and flexibility. The EXERGETIC framework combined physics-based models, controls, and real assets at ARIES, including digital real-time simulators (DRTS), a 20-MW-scale controllable grid interface (CGI), and a 2-MW conventional generator. Detailed transient models were developed for the key subsystems of a hybrid geothermal plant, including parabolic trough solar collectors, reservoir thermal energy storage (RTES), and a binary Organic Rankine Cycle (ORC) power plant. The ORC model explicitly captured thermal inertia and off-design operation and integrated control strategies to dynamically respond to electric load profiles. The models were validated against published experimental and numerical studies, demonstrating strong agreement and confirming the accuracy and robustness of the modeling approach. The resulting digital twin represents geothermal-solar-storage systems at multiple scales (1 MW to 100 MW) and enables realistic emulation of grid-connected operation. The control architecture allows the geothermal resource to provide stable baseload generation, while solar and stored thermal energy supply flexible, dispatchable support during periods of high demand or variable grid conditions. A key contribution of the EXERGETIC project is the demonstration that geothermal hybrid systems can be designed to be active grid assets rather than passive baseload generators. Using the ARIES platform, the digital twin was evaluated under multiple grid scenarios, including load following, voltage support at the distribution level, and frequency response at the transmission level. Results show that hybrid geothermal systems can respond effectively to dynamic grid conditions, providing inertia-like behavior, primary frequency support, and voltage regulation through coordinated control. In addition to the performance and grid services capability analysis of geothermal and hybrid geothermal systems, the EXERGETIC project also focused on scalability and techno-economic analysis of geothermal hybrid plants. In particular, for the scalability analysis, machine-learning (ML)-based surrogate models were trained using data generated from the geothermal digital twin under different grid-connected scenarios and plant capacities. These ML models demonstrated strong interpolation and extrapolation capabilities across plant sizes, accurately reproducing both steady-state and transient responses with very low errors. Regarding the techno-economic analysis, plant performance results were integrated with cost models for hybrid geothermal systems, and the levelized cost of electricity (LCOE) was used as the main economic metric to evaluate system performance across a range of system capacities, solar shares, solar multiples, and storage durations. Results indicate that economies of scale significantly reduce geothermal LCOE as plant capacity increases, with large-scale systems (25-100 MW) achieving substantially lower costs than small plants. Hybridization with solar thermal energy and storage further improves economic performance by increasing capacity utilization and enabling flexible dispatch. In addition, thermal storage plays a critical role in reducing LCOE by maximizing geothermal, solar, and stored energy resources. In summary, the results from this project demonstrate that geothermal hybrid systems represent a promising alternative for increasing the energy conversion efficiency of geothermal technologies, contributing to the preservation of geothermal resources, and supporting the transition of geothermal plants from traditional baseload resources into flexible, resilient, and cost-competitive energy conversion technologies.

15 GEOTHERMAL ENERGY

Storing Affordability: Battery Storage as an Asset to Reduce Data Center Cost Shifts

This report examines how battery energy storage systems (BESS) can help utilities accommodate large load growth while protecting affordability for existing ratepayers. Rapid growth in electricity demand from artificial intelligence (AI) data centers is straining the U.S. grid. Furthermore, many new data centers are entering rural markets, which could offer economic benefits but may also pose implementation challenges for smaller utilities. At the same time, retail electricity prices are increasing faster than inflation, elevating customer affordability as a key challenge. While data centers have not been the primary driver of increases in residential prices to date, they have pushed wholesale energy and capacity prices higher in several markets. Fundamental utility cost-allocation principles show that data center growth can be rate-positive for existing customers only if new peak demand grows faster than the costs a utility must incur to serve it. Several factors, including a utility’s degree of wholesale market exposure, forecast uncertainty and stranded-asset risk, and tariff design can determine the outcome of load growth on retail rates. Energy storage can make several affordability contributions in the face of this landscape of uncertainty and market volatility, including deferral of higher-cost grid investments through improved utilization of existing assets and flexibility of new large loads, insulation from volatile wholesale prices through peak shaving, and reliability support to address grid risks stemming from the behavior of AI data center loads. Different potential BESS deployment pathways—utility-scale front-of-the-meter systems, aggregated small-scale storage installations, and data center-sited behind-the-meter storage—are compared against each other and against conventional capacity alternatives. This framework is intended as a conceptual resource to utilities, particularly smaller public utilities with rural service territories, who may be considering the role that energy storage can play in insulating existing ratepayers from data center cost shifts.

25 ENERGY STORAGE

UNIFI Specifications for Grid-Forming Inverter-Based Resources: Version 3

The UNiversal Interoperability for grid-Forming Inverters (UNIFI) Consortium addresses fundamental challenges facing the integration of grid-forming (GFM) inverters in electric grids alongside rotating machines and other inverter-based resources (IBRs). This document defines a set of UNIFI specifications for GFM IBRs that provides requirements from both a power system level as well as functional requirements at the inverter level that are intended to provide means for the vendor-agnostic operation of GFM IBRs at any scale in electric power systems.

14 SOLAR ENERGY

Smart Charging of Fleet and Personal Electric Vehicles through Joint Vehicle-to-Grid Optimization

As electric vehicle (EV) adoption accelerates, vehicle-to-grid (V2G) strategies offer advantages over unmanaged charging (V0G) by enhancing grid stability, reducing fleet operation costs, and supporting integration of variable generation resources. This research develops a day-ahead optimization framework linked with agent-based simulations to evaluate coordinated V2G participation by fleet and personal EVs under 5 energy-pricing settings in Austin, Texas. Three scenarios (V0G, fleet-only V2G, and joint-V2G) are examined, considering real-time price and grid profiles, health-damage costs, and operational constraints for both fleet and personal EVs. Results show how V2G scenarios shift fleet EV charging to mid-day while enabling strategic battery-discharge during evening peaks, mitigating grid stress and lowering EV energy costs. V2G delivers close to 80% energy-cost savings for a 2000-EV fleet in Austin on grid-stressed days, with 55% lower charging pollutant outputs. Joint-V2G amplifies system-level benefits by complementing fleet discharge, but smart-charging equipment costs can offset those benefits.

Electric vehicle

Adaptation of virtual synchronous generators to dynamic conditions in power grids

Virtual synchronous generators (VSGs) are widely adopted as grid-forming controls for inverter-based resources. However, when grid conditions vary significantly as characterized by changes in short-circuit ratio (SCR) and the reactance-to-resistance (X/R) ratio, fixed-gain designs and the commonly used P–Q decoupling assumption can become inaccurate. Such conditions can degrade transient power performance, leading to oscillations, prolonged settling, and overshoot, particularly in stiff-grid operating points. This paper quantifies how grid strength and impedance-dependent coupling affect the active–reactive power dynamics of a conventional VSG over a broad range of SCR and X/R values. An adaptive VSG tuning framework is then developed by combining (i) a coupling-explicit, impedance-parameterized state-space model to enable systematic controller synthesis, (ii) a full-state-feedback law designed via pole placement to meet prescribed damping and settling-time specifications, and (iii) a physics-informed neural network (PINN)–based online grid-impedance estimator that updates controller gains in real time as grid conditions vary. Offline simulations in MATLAB/Simulink and real-time validation on an OPAL-RT platform show that the proposed method preserves consistent damping and settling behavior with reduced overshoot across wide SCR and X/R ranges, compared with fixed-gain VSG baselines.

Adaptive control

Case Study of Integrating High-Temperature Heat Pump with LiBr-H2O Absorption Chiller for Data Center Liquid Cooling

Data centers (DCs) are physical infrastructures that support artificial intelligence workloads. The rapid growth of artificial intelligence is putting substantial pressure on the US power grid. Most of electricity consumed by IT equipment, accounting for 50%-60% of total DC power, ultimately becomes waste heat. This heat is dissipated by DC’s cooling facilities, accounting for an additional 30%-40% of total DC power. Recovering and repurposing this waste heat offers a significant opportunity to enhance energy efficiency and reduce operating costs of DCs. One potential pathway is converting heat to cold using thermal-driven absorption chillers, therefore, reducing the power consumption in DC cooling facilities. Existing studies mainly demonstrate the technical and economic feasibility of repurposing DC’s waste heat for cooling applications but provide limited technical details on how to integrate the thermal-driven absorption chillers with DC cooling systems. In addition, the low-grade waste heat available from DCs must be upgraded to higher temperatures suitable for absorption chillers. This paper presents a case study on integrating high-temperature heat pumps with a LiBr-H2O absorption chiller to use DC waste heat for cooling. A thermodynamic model of single-effect, LiBr-H2O absorption chiller and an empirical model of high-temperature heat pumps were built. The case study considers ASHRAE W17 liquid-cooled DC, with facility service water supplied at 17.0℃ and returned at 25.3℃. The thermal behaviors of absorption chiller components were predicted for the generation temperature ranging from 75.0℃ to 115.0℃. Based on the available waste heat in the integrated system, two waste heat recovery strategies were evaluated: a facility service water-based strategy and cooling water-based strategy. Results indicated that the cooling water-based strategy achieves higher Coefficient of Performance (COPs) than the facility service water-based strategy. The relatively low cooling COPs of single-effect LiBr-H2O absorption chillers could be offset by high heating COP of high temperature heat pumps. The maximum cooling COP of absorption chiller and the overall COP of integrated systems occur at lower generation temperatures, but these conditions also yield lower cooling capacities. In practice, system operation should balance the trade-off between the COP and cooling capacity

Wang, Pengtao [ORNL] (ORCID:0000000214713429)

UL 1741SC Conformance Development, Evaluation, and Proposal [Slides]

V2G AC is a type of grid interconnection by mobile battery that transforms an EV into a DER with the potential to stabilize the grid and lower costs for electricity. UL 1741SC is a critical new standard to enable grid interconnection of V2G AC-capable vehicles, by defining requirements for V2G AC-intended EVSEs as a gatekeeper between the grid and the EV to support grid safety, such as through redundant voltage trip (namely oversight). EVSE manufacturers need a clear set of conformance test cases and criteria by which to evaluate their equipment and confirm the compliance with UL 1741SC, so that the EVSEs performs as intended for the grid safety. Hence, NLR identified necessary conformance tests and performed the tests identified to understand the maturity.

29 ENERGY PLANNING, POLICY, AND ECONOMY