NRG Energy (NYSE: NRG), a major power producer in New York, filed June 13 comments with the New York Public Service Commission on it sees as the future for energy storage in the state.
NRG Energy provided comments and recommendations to assist the commission in crafting an effective approach to expanding the use of energy storage in New York’s energy system, to augment and balance the increasing proportion of variable renewable resources needed to meet state Clean Energy Standard (CES) goals, and to achieve the system-wide efficiency, asset utilization and resiliency objectives of Gov. Andrew Cuomo’s Reforming the Energy Vision (REV) program.
Said the June 13 filing: “NRG supports the State’s initiative to substantially increase its reliance on renewable energy as contemplated in the CES proceeding. As a complement to those renewable resources, effective use of distributed and large-scale energy storage will be a critical element to the success of that renewable energy future, to provide firming and system load balancing to the grid.
“NRG anticipates that the low-carbon system of the future will rely on four primary resource types: (1) significant amounts of variable renewables (such as wind and solar) to provide a base quantity of energy; (2) a large amount of storage (including chemical, thermal and mechanical, both grid-connected and behind the meter); (3) pervasive load management through smart devices and multiple control systems managing aggregations of DERs; and (4) a complement of highly flexible gas-fired resources to balance load and supply as needed.
“The CES proceeding is considering procurement methods and models to enable the significant expansion of renewable energy sources in the state, and NRG recommends that this proceeding likewise be viewed as a means to begin meaningful deployment of energy storage. As the state approaches a 50% share of the energy mix coming from largely intermittent renewables, the ability to store energy when it is available from the sun and wind and use it later when customers need it will be critical to managing both cost and reliability. Storage should be developed alongside the renewables that will make up the State’s 50% renewables target.”
NRG made three primary recommendations and suggestions.
- First, NRG recommends that the state implement a procurement mechanism, either associated with the CES renewable procurements or as a stand-alone mechanism, to affirmatively add energy storage resources to New York’s system over the next decade.
- Second, the state should direct the utilities, stakeholders and the New York ISO to focus on revising rules (both utility and NYISO tariffs) that are specifically applicable to energy storage that will facilitate interconnections, participation in local system benefit programs and participation in wholesale markets. Presently, the rules generally require a ‘force fit’ of storage resources into rules intended for demand response or generation resources, and should be reformed to increase efficiency and effectiveness of storage deployment and operation, NRG wrote.
- Third, the state should institute a proceeding to examine whether the theoretical access to ‘multiple revenues streams’ is in fact possible. As noted in the literature surrounding energy storage and as stated by virtually every speaker at a May 26 Technical Conference, energy storage assets will need access to multiple revenue streams to be cost-effective, NRG said. The review and revision of tariff rules must address the practical steps and changes needed to enable energy storage to fully access all appropriate sources of value, in both the distribution and bulk power systems.
NRG said it recognizes the challenge before the state to significantly reduce emissions of greenhouse gases in the electric sector, as well as in other sectors of the economy, including transportation and buildings. Ultimately, the transportation and building sectors will need to be substantially electrified, which increases the pressure on the electric sector to begin making meaningful progress toward a low-carbon profile, it added. As such, NRG recommended in the CES proceeding that the commission implement a program of renewable energy procurements using a bundled power purchase agreement (PPA) structure.
Likewise, since energy storage will need to be a significant factor in the future low-carbon electric system, NRG recommends that the commission direct the utilities, or an appropriate state agency (like the New York Power Authority) to establish a multi-year program of procurements, with the objective of deploying at least 2 GW of energy storage capability across the state by 2025.
NRG added: “The Commission should consider including storage as a project component in the procurements for renewable energy projects under the CES to evaluate the benefits of joint renewable/storage projects. The Commission should also consider a stand-alone procurement for storage, perhaps with additional preference given for projects that either co-locate with renewables or specifically incorporate control systems to balance and respond to system needs, including the operations of local or remote renewable facilities, or that are located at existing power plant sites.”