New York state regulators yesterday approved energy storage goals of 1,500 MW by 2025 and 3,000 MW by 2030, plus a strategy to reach them, including a $310 million incentive program.
The commission has been considering its energy strategy for several months and collecting recommendations from industry players that ranged from accelerating microgrids to supplementing wholesale market shortfalls.
The final strategy, spelled out in a 199-page decision, relies on a combination of competitive markets, incentives, and market reforms to overcome barriers to energy storage. Much of it comes from an energy storage roadmap issued by the commission’s staff in June.
The commission expects the $310 million incentive to accelerate the cost decline curve for energy storage by almost two years. The incentives also will cut the cost of meeting the 1,500 MW target by $200 million and the 3,000 MW target by $400 million, according to the decision.
Gregg Sayer, a member of the commission, said during yesterday’s meeting that the incentive will help correct the “chicken and egg problem” energy storage faces. While energy storage will ultimately reduce energy costs “it is not immediately commercially feasible to expect the utilties or private market to build and install it. It’s just a little bit too expensive.”
More details about the incentive will be available when the New York State Energy and Development Authority (NYSERDA) puts forward a plan in 60 days.
Utilities to issue energy storage RFPs in 2019
The commission also ordered that utilities issue annual solicitations for bulk energy storage beginning in 2019. Competitive companies will develop and own the energy storage while utilities will manage it, giving them experience acting in a new role as distributed energy platform providers.
Consolidated Edison must seek 300 MW of energy storage and other utilities in the state 10 MW each. Utility plans for the solicitations are due to the commission within 60 days.
Regulators will allow the utilities to recover the contract costs by spreading them among all ratepayers.
The commission ordered:
- Utility solicitations for dynamic load management resources, under terms of at least three to five years, beginning in summer 2020
- Creation of new earnings adjustment mechanisms to encourage utility use of storage to improve system efficiency, reduce peak load and improve load factors
- Utility ownership of energy storage only when the market fails to produce needed resources
- Identification by utilities of property suitable for non-wires alternatives – and its value – to help competitive companies in NWA bidding
The commission postponed until next year some complex rate issues — such as delivery service costs for discharging and charging energy storage. Instead, the rate issues will be considered within another proceeding that looks at standby and buyback rates and at value stacking distributed energy resources. (Matter 17-01277.)
In a separate decision Thursday, the commission also okayed new energy efficiency targets for utilities. The targets are expected to reduce the state’s energy consumption by the equivalent of fueling and powering 1.8 million homes.
Cuomo takes shot at Trump administration
In praising the commission’s votes, Gov. Andrew Cuomo took a shot at the Trump administration’s lack of action on climate change.
“As the federal government continues to ignore the real and imminent dangers of climate change, New York is aggressively pursuing clean energy alternatives to protect our environment and conserve resources,” Cuomo said. “These unprecedented energy efficiency and energy storage targets will set a standard for the rest of the nation to follow, while supporting and creating jobs in these cutting-edge renewable industries.”
The energy storage decision, CASE 18-E-0130, is available on the commission website.