New York Energy Storage Roadmap recommends actions for implementation in near-to-medium term

New York Gov. Andrew Cuomo recently announced the release of the state’s Energy Storage Roadmap, which, as noted in a statement from Cuomo’s office, identifies short-term recommendations for how energy storage can deliver value to New York electricity consumers and cost-effectively address the grid’s needs and demands.

According to the “New York State Energy Storage Roadmap and Department of Public Service/New York State Energy Research and Development Authority Staff Recommendations,” document, Cuomo in January announced a target to install 1,500 MW of energy storage in New York by 2025. Cuomo directed state energy agencies and authorities to work together this year to generate a pipeline of storage projects through such mechanisms as utility procurements; major regulatory changes in utility rate design and wholesale energy markets; incorporating storage into criteria for large-scale renewable procurements; and reducing regulatory barriers, the document noted.

The document further noted that deploying 1,500 MW of energy storage by 2025 will bring such benefits for New York as:

  • Nearly $2bn in gross lifetime benefits to the state’s utility customers, according to a state-sponsored analysis by the consulting firm, Acelerex
  • Adding flexible resources that can be available when needed, which will become more valuable as the state adds more renewable energy – at small and large scales – and will enable those resources to meet periods of peak demand
  • Avoiding more than one million tons of CO2 emissions over the life of the storage assets – estimated at 10 years
  • Adding resiliency to the electric system by reducing the impact of outages
  • Protecting public health by meeting many of the peaking needs currently served by older and higher-emitting fossil plants that may be close to retirement
  • Creating on the order of 30,000 jobs in the storage sector by 2030

The roadmap, which was developed by the staff of the the state Department of Public Service (DPS) and of the New York State Energy Research and Development Authority (NYSERDA), in conjunction with other stakeholders, develops an approach and a series of recommended actions that are intended to achieve Cuomo’s 1,500-MW target in a manner that reflects the principles underpinning the Reforming the Energy Vision (REV) strategy, according to the document. As noted on the REV website, REV is Cuomo’s energy strategy for New York that is designed to, for instance, help consumers make more informed energy choices.

The roadmap groups storage deployment applications into three market segments – customer‐sited, distribution system and bulk system – based on where the storage is located on the electric grid and the needs it serves, the document said, noting that the primary use cases, benefits, and services of storage in each market segment are:

  • Customer-sited deployments – demand charge management; value of distributed energy resources (VDER) services via the value stack; and dynamic load management, including demand response
  • Distribution system deployments – utility transmission and distribution (T&D) solutions providing distribution relief, peak demand relief, and wholesale market services; as well as local reliability services
  • Bulk system deployments – firming resource when paired with large-scale intermittent renewables; peaker replacement/complement and “clean peak” services; as well as bulk wholesale services and potential opportunities for bulk transmission deferral

While the roadmap describes a longer‐term – 2026‐2030 – vision, its primary focus is to identify deployment opportunities, use cases, and implementable actions that the state can undertake to support deployment of various energy storage applications in the near‐to‐medium term – that is, 2019‐2025, according to the document.

The policy, regulatory, and programmatic actions for consideration and implementation in the near-to-medium term that the roadmap recommends fall into seven general categories, the document noted:

  • Retail rate actions and utility programs – improve customer retail delivery rates and programs like utility dynamic load management programs to send more accurate price signals that correspond to the system‐wide and locational value of peak load reductions and to reduce financing barriers
  • Investor‐owned utility roles – enable development of a market‐based storage sector and align utility incentives to that end by clarifying the role and business model for investor‐owned utilities (IOUs) to manage the full customer bill, leveraging assets such as storage and expanded non‐wires alternatives (NWA+, where third‐party assets provide utility T&D deferral, reduce generation capacity obligations by reducing peak system load, and provide ancillary services to the wholesale market
  • Direct procurement approaches through NWAs, Renewable Energy Certificates (RECs) and NYS leading by example – expand the market by employing direct procurement approaches through utility NWAs, NYSERDA’s RECs that can pair large‐scale renewables with energy storage, and NYS “Lead by Example” procurement initiatives
  • Market acceleration incentive – utilize market acceleration bridge incentives to hasten the market learning curve and reduce costs
  • Address soft costs including barriers in data and finance – pursue cross‐cutting actions to reduce barriers including expanding access to more granular system load data to target highest‐need locations on the electric system, lowering costs – e.g., permitting, interconnection, and capital costs – as well as insuring access to a skilled workforce
  • “Clean Peak” actions – align storage approaches with Department of Environmental Conservation (DEC) draft combustion turbine peaking unit regulations to reduce NOx and develop approaches to differentially value peak carbon reductions. That includes implementing “Clean Peak” actions through rate design, the market acceleration bridge incentive, REC procurements and a to‐be‐developed methodology for analyzing peaker plant operational and emission profiles on a unit‐by‐unit basis to determine best potential candidates for hybridization, repowering, or replacement by storage
  • Wholesale market actions and distribution/wholesale market coordination – develop approaches to directly or indirectly access wholesale market values (including capacity and ancillary service values) by modifying wholesale market rules to better enable storage participation, including dual market participation (i.e., where storage simultaneously provides both distribution system and wholesale system services) in compliance with FERC Order 841. According to a Feb. 15 FERC statement, Order No. 841 helps remove barriers to entry for emerging technologies such as electric storage resources by requiring each regional grid operator to revise its tariff to establish a participation model for electric storage resources that consist of market rules that properly recognize the physical and operational characteristics of electric storage resources  

Among other things, the document noted that staff recommends establishing an approximately $350m bridge incentive statewide, including in Long Island Power Authority (LIPA) and PSEG Long Island’s service territory, to accelerate adoption of customer‐sited storage and storage sited on the distribution or bulk systems, including pairing with solar photovoltaic (PV).

Incentive levels should be aligned with declining storage costs to accelerate cost declines, spur innovation, and enable a self‐sustaining market without incentives, the document said. Staff recommends that existing sources of funds, such as those authorized under the Clean Energy Fund, be identified to support that recommended funding commitment, the document said.

Staff estimates that such an incentive program could support a significant amount of customer‐sited and distribution/bulk sited storage by 2021–22, while accelerating cost declines, deploying more than one‐third of the 1,500 MW 2025 target, and establishing critical foundations for a self‐sustaining market without direct incentives, the document noted.

Staff estimates that a bridge incentive program could reduce soft costs by up to $50 per kWh for a distribution/bulk‐sited system and up to $150 per kWh for a customer‐sited system by 2025 compared to 2017‐18 costs, thereby improving project bankability, the document said.

Furthermore, that program is projected to accelerate the cost decline curve by almost two years and save about $200m from the projected cost of deploying 1,500 MW of energy storage by 2025, and more than $400m from the projected cost of deploying 3,000 MW by 2030, according to the document.

According to Cuomo’s statement, multiple technical conferences will be held throughout the state to allow for public feedback on recommendations and approaches identified in the roadmap. The commission has created a new proceeding to consider and establish a 2030 storage target and the deployment mechanisms to achieve the 2025 and 2030 energy storage targets by the end of the year, the statement noted, adding that public comments on the roadmap can be submitted via the DPS website through Case Number 18-E-0130.

About Corina Rivera-Linares 3286 Articles
Corina Rivera-Linares was TransmissionHub’s chief editor until August 2021, as well as part of the team that established TransmissionHub in 2011. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial from 2005 to 2011. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines.