New York State could be on its way to crafting the most aggressive energy storage goal in the country.
The target is still a work in progress, but based on Gov. Andrew Cuomo’s (D) recent announcement and interviews with analysts, it could be set above 1,500 MW by 2030.
“I think the target would be higher than 1,500 MW,” Conor Bambrick, air and energy director at Environmental Advocates of New York, told Utility Dive.
California’s energy storage target is 1,300 MW by 2020. In his state of the state address in early January, Cuomo set a target of 1,500 MW by 2025. But 2030 is the target year that will be established by New York's current energy storage bill, to keep it on the same track as the state's 50% renewables goal in its Clean Energy Standard.
'Eye catching' goal
Cuomo’s 1,500 MW goal is “eye catching,” Dan Finn-Foley, senior storage analyst at GTM Research, told Utility Dive. But “at most,” he said, “it will serve as one input for the Public Service Commission as they begin the process of designing and setting policy around the final target.”
Finn-Foley called the 1,500 MW goal “aspirational,” but noted that “it comes with serious teeth” in the form of $200 million from the New York Green Bank and $60 million from NYSERDA towards energy storage pilots and deployments. “This level of investment has real potential to kick-start the market, though the timing is still up in the air,” Finn-Foley said.
The timing of New York’s energy storage target has been a stop and go affair from the start. The state’s legislature passed a pair of bills last June that directed the New York Public Service Commission to develop an Energy Storage Deployment Program, including a storage procurement target for 2030. The program would be run by the New York Energy Research and Development Authority (NYSERDA) and the Long Island Power Authority (LIPA). Cuomo signed the bill nearly six months later, but with a catch — a “chapter amendment,” which is sometimes used when a bill is passed without executive input.
In a signing memo attached to the bill, Cuomo said his office had “secured an agreement with the Legislature to pass legislation in the upcoming session” that would amend the law. That means the storage legislation will not reach its final form until it is amended by the passage of A8921, which has been introduced and is working its way through the legislative process. The bill is expected to pass soon, according to the office of Representative Amy Paulin (D), one of the bill's sponsors.
Two concerns addressed
The amendment is designed to correct a technical issue in the legislation the governor signed in late November, and it identifies two concerns: possible fiscal burdens the bill would create and consistency with the state’s Reforming the Energy Vision (REV) program.
The technical issue was a matter of timing brought on by the time gap from passage to enactment of the bill — changing the original Jan. 1, 2018, deadline for the Public Service Commission to complete the implementing regulations to year-end 2018.
On the funding front, the amendment aims to retain flexibility on sources of funds for the energy storage program. Among the options are the state’s existing $5 billion Clean Energy Fund and funds received as part of New York’s participation in the Regional Greenhouse Gas Initiative.
The governor also wanted to be sure that the energy storage program would be consistent with New York's REV program, which aims to move the state’s electric power sector toward market mechanisms and away from mandates backed by ratepayer charges.
The January 2018 amendment to the energy storage bill also added functions the technology should perform, such as deferring costs associated with transmission, distribution and generation capacity; minimizing peak loads in constrained areas; assisting in the integration of variable output energy resources; reducing greenhouse gas emissions; reducing demand for peak generation and improving reliability.
Goals and targets
The amendment has a small but telling change in language. “Energy storage deployment program” became “energy storage deployment policy.” The change helps the governor preserve fiscal flexibility by making it clear that the energy storage initiative does not have to ask for money, analysts said.
The amended bill also removes the word “target,” using instead the softer term “goal.”
“NYSERDA has made it clear that this is a ‘goal’ and not a ‘target,’” Brett Simon, another storage analyst at GTM Research, told Utility Dive. “It helps show this isn’t a hard piece of legislation.”
Simon said it is also worth considering that the goal in Cuomo’s announcement is tied to 2025 while the goal in the energy storage legislation is 2030, indicating that the state is likely to push more aggressively for a goal higher than 1.5 GW in 2030.
But it is still unclear how the $260 million in Green Bank funding in Cuomo’s announcement will be allocated, so it is hard to say exactly when it will start having a clear effect on the market, Simon said. He also noted that there are still questions around permitting and fire safety issues in New York City, but the Fire Department of New York and the city’s Department of Buildings are expected to announce additional guidelines in the first half of 2018.
Unique New York
Among the other unique circumstances in New York is the fact that the state is aiming to derive 50% of its energy from renewable sources by 2030 without relying on gas-fired generation as a bridge, as many other states are doing. So far, New York has resisted the development of new natural gas resources and even the construction of gas pipelines that would bring gas in from out of state.
The state's resistance could make energy storage more important in managing the influx of renewable resources, analyst Tim Grejtak at Lux Research, told Utility Dive. That could create conditions similar to the scenario in California where the state called on energy storage to backstop the potential loss of gas-fired generation when the Aliso Canyon gas storage fields were shut down after leaks were discovered, he said. The quick mobilization of energy storage projects to fill that gap helped jumpstart California’s energy storage market, Grejtak said.
Grejtak also noted that the “holistic,” market-based approach New York is taking could be important in demonstrating how energy storage can compete with other resources.