According to a research report released by the New York State Department of Public Service (DPS) recently, New York State is on track to achieve its goal of deploying 6GW of energy storage systems by 2030, while the state’s planned interconnection queue will double the installed capacity of energy storage projects. , will eventually reach 12GW.
The New York State Department of Public Service (DPS) has released its third annual "State of the Energy Storage Market" report, detailing the state's progress toward meeting its 2030 energy storage deployment goals, which the New York State government announced in January this year. The deployment target has doubled from 3GW to 6GW.
New York State also changed its mid-term goal of deploying 1.5GW of energy storage by 2025 in response to the newly established 2030 target. And by 2030, the state wants 70 percent of its electricity to come from renewable sources.
The New York State Department of Public Service (DPS) said that by the end of 2021, the total installed capacity of energy storage projects that had been deployed or contracted was 1,230MW, or about 82% of the 1,500MW target. However, energy storage deployment in the state appears to have been slow.
The target for planned deployment of energy storage systems, including the New York utility and the New York Independent System Operator (NYISO) interconnection fleet, has now doubled to 12GW. Although the New York State Department of Public Service (DPS) added that not all of these energy storage projects will be delivered smoothly. A recent portfolio launch in New York state is Nala Renewables' 280MW of four battery storage projects on Long Island, scheduled to come online in 2024.
The report breaks down data on storage deployments in the table above, with the percentage figures at the bottom of the table based on original targets. These figures do not include two pumped hydro projects participating in the New York Independent System Operator (NYISO) market and ahead of the 2025/2030 energy storage deployment target, with a combined capacity of 1.4GW.
The New York State Incentive Program provides financial incentives to build energy storage systems above 5 MW on Long Island that participate in wholesale markets, commercial retail projects below 5 MW, and residential energy storage systems paired with solar power facilities.
Of the 77 commercial retail projects funded by the incentive program, 64 were used to shift renewable energy dispatch time to time with higher distribution grid value under distributed energy value (VDER) compensation. According to the Long Island Power Authority's Dynamic Load Tariff, battery storage projects deployed on Long Island are combined with solar power generation to help the local grid ease demand during peak summer.
Many large energy storage projects offer or will offer wholesale services in the New York Independent System Operator (NYISO) market. Fourteen of these projects, including 550MW/1835MWh, have received $115 million in grants from the New York State Energy Research and Development Authority (NYSERDA) for energy storage projects targeting downstream capacity in the wholesale market or revenue from ancillary services.
According to the report released by the New York State Department of Public Service (DPS), the average deployment cost of non-residential energy storage projects is $464/kWh, while the average deployment cost of energy storage projects above 5MW in 2020/2021 is $370/kWh kWh. Compared to 2020/2021, the average deployment cost is expected to increase by 22% in 2022 and 2023 to $567/kWh. However, by 2030, the cost of deploying large-scale energy storage systems is expected to drop to the $150-$200/kWh range, according to industry analysts.
Investor-owned utilities in New York state must procure power from some energy storage systems to be operational by Dec. 31, 2025. Edison Associates must sign a power purchase agreement for power from the 300MW energy storage system, and along with other utilities, issued a request for proposals (RFP) in August 2021. The New York State Department of Public Service (DPS) has rejected the utility's proposal to own energy storage systems, claiming that improving market rules and removing barriers will eliminate the need.
The report also said that the New York Independent System Operator (NYISO) and stakeholders have made progress in expanding the way energy storage systems can participate in the market. The New York Independent System Operator (NYISO) compliance response to Federal Energy Regulatory Commission (FERC) Order 2222, requiring system operators (ISOs) to expand eligibility and increase Distributed Energy Resources (DER) participation, remains Awaiting approval from the U.S. Federal Energy Regulatory Commission (FERC).
The New York Independent System Operator (NYISO) is pending rate revisions from the U.S. Federal Energy Regulatory Commission (FERC), which, if approved, would ease restrictions on energy storage deployment and significantly expand aggregation opportunities. This includes reducing the cost of all clean energy, including energy storage systems.
One reform accepted by the U.S. Federal Energy Regulatory Commission (FERC) is the market design for co-located energy storage resources (CSR) that will be implemented in December 2021. It allows wind and solar power facilities to be co-located with energy storage systems, share grid interconnections, and participate in wholesale markets in different ways for resources under their respective participation models. Additionally, new co-located energy storage projects can submit a single interconnection request to reduce delays and costs.
In addition, the committee plans to introduce a new participation model in 2022 that will allow co-located energy storage systems and renewables to share interconnection to share a point identifier (PTID), a bid and a timetable.
The report concludes by saying that the combination of programs and actions approved by the New York State Department of Public Service (DPS) effectively establishes the basis for a competitive market for the state to deploy more energy storage systems.
The report also noted that "the New York State Department of Public Service (DPS) recommends that no corrective action is currently required to the Commission's energy storage deployment policy."
While the next review of the energy storage program will take place in 2023, the New York State Department of Public Service (DPS) and the New York State Energy Research and Development Authority (NYSERDA) are updating the roadmap to reflect the new goals.