Dive Brief:
- Meeting New York’s goal of achieving 6 GW of energy storage by 2030 will take an “all-hands-on-deck” approach, including utility ownership of some storage, Consolidated Edison, National Grid and other utilities said Monday.
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Utility-owned projects would pioneer storage use cases before the market can support them and use space in utility facilities close to existing infrastructure to reduce costs to customers, ConEd and Orange and Rockland Utilities said in joint comments with the New York Public Service Commission.
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The Independent Power Producers of New York opposes expanding utility-owned storage. “If [utility-owned storage] is given free range, then customers who are already struggling with paying for rising transmission costs will be forced to pay for cost-overruns on storage projects that are guaranteed cost recovery,” the industry group said.
Dive Insight:
The New York State Energy Research and Development Authority and Department of Public Service in December issued a roadmap to double the state’s initial 3 GW storage goal to 6 GW by the end of the decade, with a 1.5-GW interim goal by 2025.
The agencies have proposed to extend funding for retail and residential storage programs already in place following a design of region-specific blocks of funding similar to what’s already used for storage projects in the state.
Estimates vary on how much it will cost New York to reach its target of 6 GW of energy storage in seven years.
A group of utilities told the Public Service Commission recently that reaching a 2025 goal of 1,500 MW of energy storage will cost customers about $2.5 billion. The utilities said their calculation is based on a dollar-per-kW estimate from a roadmap proceeding and other factors, including cost escalation estimates and megawatts installed from 2019 to 2025.
The state has said a 6 GW target is projected to reduce future electric system costs by about $2 billion, though officials were not specific. New programs should include 1,500 MW for retail storage projects and 200 MW for residential storage, with a cost estimate of between $1 billion and $1.7 billion, according to the Public Service Commission. As a result of the storage projects, customers’ electric bills would rise an average of 34 cents to 58 cents a month, a fraction of 1% for the average residential bill over 22 years, according to the PSC.
A total of 1,301 MW of storage, or about 87% of the 2025 target, have been awarded or contracted as of October 2022, with more than 130 MW installed, the state said.
About 12,000 MW of proposed energy storage projects are in distribution-level or wholesale-level interconnection queues in New York. “These metrics convey the rapid growth of the storage industry’s interest in the state since the 2018 Roadmap,” the state said in releasing the 6 GW roadmap in December.
ConEdison and Orange and Rockland Utilities said in initial comments to the PSC last month about the roadmap that the “quantity and pace of storage installation envisioned by the roadmap to reach the state’s targets is highly ambitious” and must provide flexibility to accommodate several procurement mechanisms.
The comments were among hundreds submitted to the PSC since 2018 at the start of the storage roadmap process. The target of reaching 1.5 GW by 2025 was set then, with a goal of 3 GW by 2030 that New York now seeks to double.
Central Hudson Gas & Electric; New York State Electric & Gas; Niagara Mohawk Power, or National Grid; and Rochester Gas and Electric support the new storage goal, but said utility-owned storage must be part of the plan to meet the target, according to their initial comments.
Utility-owned storage “can provide non-market services that benefit multiple parties, including communities, renewables developers, and utility customers,” they said.
“As bill impacts associated with clean energy expenditures in New York continue to grow, it is important to achieve net benefits for these dollars, particularly in early years when technology costs are high and project economics are most challenging,” the utilities said.
IPPNY urged the state to recognize that the successes from the deregulated generation market are applicable to energy storage. Investors should not be “chilled” by competition with utilities that have guaranteed cost recovery, the industry group said.
“Through independent investment, which is already being shown through energy storage projects in the NYISO interconnection queue, New York can advance energy storage resources economically and responsibly,” IPPNY said.
