Accelerating the implementation of energy storage in New York state

The state of New York has long been one of the leaders of the clean energy revolution. New York has embraced clean energy technologies, especially solar, with innovative programs like Reforming the Energy Vision (REV). REV is an initiative to build a clean, resilient and affordable energy system in New York, transforming the state’s energy policy to ensure greenhouse gas emission reduction, energy efficiency, and renewable energy generation are at the core of the state’s energy system. It promotes the broader deployment of distributed energy resources (DERs), such as demand response and technologies that can feed power back to the system, like solar and energy storage.

New York recognizes the importance of DERs to maintain a flexible, sustainable, and resilient energy grid and is actively spearheading measures to ensure the implementation and support for DERs across the state, energy storage in particular. They recently created participation rules to level the playing field for DERs like energy storage to participate in wholesale markets – not waiting for the Federal Energy Regulatory Commission (FERC) to issue an order first. And while many energy storage projects have been developed already in New York, this is just the beginning. New York’s governor Kathy Hochul is looking to accelerate the deployment of energy storage.

New York’s energy storage success to date

In 2018, the New York State Energy Research and Development Authority (NYSERDA) and the New York State Department of Public Service (DPS) developed the New York State Energy Storage Roadmap. New York’s governor’s office published the roadmap with a stated goal of “transforming its electricity system into one that is cleaner as well as more resilient and affordable.” The roadmap shared goals, key analytical findings, recommended actions, utility roles, procurement, and actions that would help kick-start programs to accelerate energy storage deployment across the state.

As a result, over 1.2 GW of storage have been awarded or contracted across New York to date. Most of these projects are on the bulk power system – where they are connected directly to the transmission network. These projects have also received funding via the $350 million in energy storage incentives available through the NYSERDA Market Acceleration Bridge Incentive Program. The Bridge Incentive Program was a key outgrowth of the original Energy Storage Roadmap that would accelerate cost reduction efforts by dramatically reducing soft costs and making projects more economical in the near term.

Ambitious targets for deploying energy storage

At the start of the year, Governor Hochul announced in the State of the State address a directive to DPS and NYSERDA to file an updated roadmap – “Storage Roadmap 2.0”. This new roadmap would chart a pathway to a new energy target of at least 6 GW of deployed energy storage by 2030. Governor Hochul’s announcement effectively doubles the state’s previous target of 3 GW, highlighting the key themes for energy storage deployment:

• enabling New York’s renewable future
• providing a pathway to supplant fossil-fueled generators that disproportionately affect disadvantaged communities
• ensuring a clean, reliable, and resilient electric grid

Storage Roadmap 2.0 tackles market reforms and cost-effective procurement mechanisms to capture the full benefits of energy storage, plus research and development needed to accelerate technology innovation – such as long-duration energy storage and incentives required for the private market to produce sufficient energy storage capacity to meet the state’s clean energy targets. It will also address these key questions:

• the optimal locations to install energy storage assets
• the best timing for energy storage deployment
• the role of long-duration energy storage
• the balance between bulk, retail and residential energy storage deployments

In addition, the roadmap will evaluate remaining barriers to energy storage and cost-effective procurement mechanisms. It will also provide recommendations for accelerating innovation while incentivizing the private market.

A “starting point” modeling framework called the Integration Analysis has run through multiple scenarios and found that New York needs about 20 GW of short-duration (intraday) storage by 2050. This need assumes that electrification loads are consistent with economy-wide net zero and the Climate Leadership and Community Protection Act’s accounting rules. In addition, about 100 GW of renewable energy needs to be implemented by 2050. The most recent assumptions shift the post-2030 energy storage builds earlier, enabling integration of renewables and potentially facilitating retirements of gas and oil facilities.

DPS and NYSERDA are engaging with stakeholders on an ongoing basis and plan to complete the modeling work by the end of April. Preliminary results are expected in May, with a completed roadmap published by July. The final model will represent system-wide and local capacity requirements, plus operational modeling of hourly generation to meet loads and reserves for 30 representative days. It will provide a view on various aspects like expected energy storage build volumes, emissions impacts, and demand response curtailment impacts. However, the model will not be able to provide visibility into the location of energy storage assets (such as transmission-connected, distribution system, or behind-the-meter), detailed capacity market revenue projections by market, or the impacts on sub-zonal constraints on the network.

A clean energy future with energy storage

Energy storage is an essential component of New York’s clean energy future and will play a pivotal role in helping the state meet its ambitious climate goals. It will help to integrate the growing numbers of solar PV systems into the grid – to ensure the grid keeps supply and demand in balance as solar PV systems feed more renewable energy into the grid.

Energy storage will also enable the grid to use renewable energy when and where it is needed most. For instance, the grid can leverage stored renewable energy to help stabilize supply during times of peak demand on the grid, like during hot summer days – and draw less electricity from fossil fuel generation sources.

This need from the grid brings monetization opportunities for organizations looking to install – or who have already installed – battery energy storage in New York.

Helping organizations deploy energy storage

While the final details around Storage Roadmap 2.0 are uncertain, one thing is for sure: the amount of installed energy storage in New York will only continue to grow. And the state will incentivize organizations that install and use their batteries to help meet the state’s clean energy targets.

The installation of battery energy storage can help organizations address multiple needs across their energy infrastructure. Batteries can be paired with solar PV, and organizations can dispatch the batteries during times of peak demand on the grid to reduce their demand charges. Batteries can also be a component of a microgrid solution to build resilience and enable an organization to meet critical energy requirements during a grid outage. In addition, organizations can place their batteries in energy markets and earn revenue for dispatching their batteries when the grid needs resources from energy storage the most.

Centrica Business Solutions can help you maximize the value of your energy infrastructure and develop a tailored strategy for how battery energy storage and complementary sustainable energy solutions can meet your energy needs and goals. We provide the most add-on value with our expertise and comprehensive suite of integrated energy solutions and services encompassing energy efficiency measures, renewable energy offerings, and demand response services. Our unique combination of strategic guidance, industry expertise, innovative technology, flexible funding, and full lifecycle support ensure you make the most of new opportunities, react quickly to market changes, and eliminate complexity and risk.

There are many complexities around the deployment of batteries that require deep expertise and experience, including engineering know-how, integrating batteries with other technologies, financing solutions, capturing all possible incentives, and how to best leverage batteries as revenue generators in energy markets. Whether you are considering a battery energy storage project or already have batteries installed and want to know if you can get more value from energy markets, lean on Centrica Business Solutions’ expertise. We can evaluate your energy infrastructure and help you identify the best way for your organization to incorporate battery energy storage into your energy strategy.