Written by Kerry Burke, ERS, August 22, 2018
In his 2018 State of the State address, Governor Andrew M. Cuomo announced a 1,500 megawatt (MW) energy storage target by 2025. This impressive number is equivalent to approximately one-fifth of the electric demand for all New York State homes. New York will also be establishing a target for 2030 in the coming months.
Following-up on his State of the State Address, Governor Cuomo announced the official release of the New York State Energy Storage Roadmap in June. The Roadmap details actions currently underway along with a series of recommended actions that the New York State Department of Public Service (DPS) and the New York State Energy Research and Development Authority (NYSERDA) identified to achieve the Governor’s 1,500 MW target. It also sets New York on the path to achieving the upcoming 2030 target. This marks yet another major accomplishment for New York State, an established national leader in clean energy.
The Roadmap details how the 1,500 MW of storage will be utilized to support Governor Cuomo’s Reforming the Energy Vision (REV) initiative, a strategy to build a clean, resilient, and affordable energy system for all New Yorkers. It identifies storage deployment opportunities, examples of best-fit use cases, and tangible actions that the State can take. These actions are designed to develop the market framework that will enable storage to be cost effectively deployed to meet customer and/or system needs. The document continues down this path by examining project economics and the impact of the Roadmap recommendations on the bankability of four sets of use cases:
- Customer-sited deployments
- Distribution system deployments
- Bulk system deployments
- Deployments that provide services in multiple markets (distribution and bulk services)
The Roadmap recognizes that energy storage is at the forefront of the dynamic changes occurring in New York’s energy sector. It lays out the path for storage to be fully utilized to reduce customer electric bills, reduce the impact of outages, increase renewable energy generation, and reduce harmful emissions. Written comments on the Roadmap may be submitted until September 10, 2018, with reply comments due by September 24, 2018. Three technical conferences were also held during the summer of 2018. A Public Service Commission Order on this proceeding is expected by the end of the year.
Rising to the Challenge
To reduce capital costs and barriers until the market is self-sustaining, the Roadmap outlines a number of specific State interventions, several of which are described below.
New York Green Bank (NYGB), a financial entity whose goal is to increase private sector investment in clean energy projects, will invest at least $200 million in funding for storage-related investments.. NYGB currently has an open RFI to solicit direct interest from project developers on how it can address financing gaps and support energy storage projects. This will help demonstrate the economic viability of storage systems for other financial parties.
Simultaneously, the Roadmap seeks to accelerate installed energy storage cost declines (costs have declined by an average of 10‐15 percent per year since 2010) by introducing a set of bridge incentives into the market, with $350 million of incentive funding recommended. The incentives are intended to scale the industry and thereby help drive down the non-hardware costs for customer-sited energy storage systems upwards of $150 per kWh, per system, by 2025.
NYSERDA is also investing in moving the market forward by supporting soft cost reduction strategies. This includes streamlining the permitting process and providing assistance to encourage storage vendors to expand into New York. In addition, NYSERDA is identifying best fit use cases for customers, educating stakeholders and end users, and providing technical assistance to bolster project development. Further, funding is available for project feasibility studies and installations, and NYSERDA is collecting system performance data to develop case studies and other market resources.
On the Horizon
Each of the activities currently underway and the recommended actions put forth in the Roadmap are meant to establish a self-sustaining market, reduce capital costs, and implement viable storage systems across New York. With the release of the Roadmap also comes an official request for public input. Stakeholders are encouraged to provide feedback on the Roadmap directly through the DPS website.
A major selling point of the Roadmap is the ability of energy storage to simultaneously address concerns related to renewable energy, New York’s job market, and marginalized communities. The Roadmap plans to bring nearly $2 billion in gross lifetime benefits for utility customers, avoid over one million tons of CO2 emissions in the next 10 years, improve grid resiliency during regional outages, and enhance the air quality in neighborhoods that are adjacent to older, polluted power sources slated for retirement. The Roadmap also paves the way to introduce 30,000 new jobs into this rapidly growing cleantech industry.
One of the key tactics that the Roadmap outlines for reaching the State’s storage objectives is increasing the number of customer-sited systems. These systems can lower customer electric bills, increase building resiliency, help integrate renewables into the grid, and provide locational grid relief services. There is a suite of resources currently available for building owners and operators to begin implementing energy storage solutions that help reduce operating costs and improve grid operations.
Building owners, operators, and other stakeholders seeking more information on value streams, funding for feasibility studies, or technical assistance related to pursuing energy storage opportunities can visit the NYSERDA Energy Storage Portal or contact ERS at firstname.lastname@example.org. All of these resources, including experts for technical assistance, have been made available under NYSERDA’s energy storage program.