Dive Brief:

• New York state has released a road map on how it will reach 6 GW of energy storage by 2030, representing at least 20% of peak electricity load.
• The state Energy Research and Development Authority and Department of Public Service submitted the proposal to the Public Service Commission. It’s projected to reduce projected future statewide electric system costs by nearly $2 billion and the average customer bill would rise by less than .05%, or 46 cents a month with the plan, state officials said.
• The storage plan, announced Dec. 28 by Gov. Kathy Hochul, D, would support New York’s goal for 70% of the state's electricity to come from renewable sources by 2030 and achieve 100% zero-emission electricity by 2040.

Dive Insight:

The proposal calls for 3,000 MW of new bulk storage that would power about 1 million homes for up to four hours. The power would be procured through a competitive Index Storage Credit mechanism that officials say will provide some certainty to projects while saving money for consumers.

The proposal also calls for 1,500 MW of new retail storage to power about 500,000 homes for up to four hours, and 200 MW of residential storage that would power 120,000 homes for up to two hours. NYSERDA’s block incentive programs would support the increased storage.

At least 35% of plan funding would support projects to benefit disadvantaged communities and target fossil fuel peaker plant emissions reductions.

"Storing clean, renewable energy and delivering it where and when it is needed is one of the most critical challenges we must overcome to reduce statewide emissions, especially from traditional fossil fuel peaker plants," Hochul said in a statement.

Electric utilities also would be required to study the potential of high-value energy storage projects toward providing cost-effective transmission and distribution services not currently available in existing markets.

Hochul unveiled plans in January 2022 to double New York’s 3 GW by 2030 storage target in her State of the State message.

Attorneys at the law firm Foley Hoag said the centralized procurement method is a “key headline” of the state’s proposal. The Index Storage Credits would be similar to the Index REC structure used for NYSERDA’s procurement of “Tier 1” large-scale onshore renewable energy and offshore wind renewable energy certificates, they said.

Solicitations using this mechanism would account for half of the 6 GW goal, the Foley Hoag attorneys said.

New York’s storage road map cited rising costs due to supply chain constraints, material price increases and increased competition for battery cells are “notable barriers to deployment” and to some extent, have increased recently. It also cited delayed interconnection processes and downward pressure on capacity revenue.

Despite the Inflation Reduction Act and its investment tax credits for standalone energy storage projects, The road map recommends additional financial support to reach the 6 GW deployment goal, Foley Hoag attorneys said.