Updated: New York Launches Next Stage of $40M NY Prize

April 21, 2016
New York has issued the second NY Prize request for proposals, this one offering $8 million from the $40 million pot designated to spur community microgrid development in the state

New York has issued the second NY Prize request for proposals, this one offering $8 million from the $40 million pot designated to spur community microgrid development in the state.

One of the most watched microgrid opportunities in North America, the NY Prize attracted 147 microgrid proposals in its first phase last year. From those proposals the state issued 83 grants of about $100,000 each for microgrid feasibility studies — $8.1 million in all.

Editor’s Note: This story is an updated version of an April 20 alert. We’ve added more details about the new RFP.

Now the New York State Energy Research and Development Authority plans to select eight communities, which will each receive prizes of $1 million to be applied toward engineering, design and business plans. Winners will be required to offer a 15 percent cost-share.

Phase II proposals are due October 12.

“This competition will help make communities more resilient as well as bring New York one step closer in its goal toward achieving 50 percent renewable energy by 2030,” said Gov. Andrew Cuomo, in announcing the second phase of the NY Prize. “By creating strong local power networks, we can help modernize our energy grid while providing clean, reliable power to New Yorkers for years to come.”

The NY Prize is part of the state’s larger Reforming the Energy Vision (REV), a revamping of electric power rules and markets to open the way for a more decentralized grid.

The state is trying to spur microgrids, in particular, to help avert the kind of prolonged outages that crippled New York City during SuperStorm Sandy in 2012

“Community microgrids will reduce costs and add more clean energy technologies like solar, wind and batteries into the electric grid,” said Richard Kauffman, New York State chairman of energy and finance. “NY Prize is an essential component of Governor Cuomo’s Reforming the Energy Vision strategy to modernize our energy infrastructure and provide New Yorkers with greater opportunity to choose how they power their communities for greater reliability, affordability and a cleaner environment.”

For more insight on the NY Prize, attend “NY and Beyond: Advancing Microgrids Nationally with Lessons Learned in New York,” a May 19 conference hosted by Microgrid Knowledge in Manhattan.

What NY Prize seeks in second phase

The phase II RFP is open to local governments, community organizations, non-profit entities and for-profit companies. Even those who did not participate in Phase I may apply. But to compete, all applicants must complete a benefit-cost analysis and comparable feasibility analysis.

The state will not accept proposals from simple, campus style microgrids. Instead, it seeks microgrids that include at least one facility that provides critical services to the public. The microgrid also must have multiple uniquely owned/controlled buildings that act as a group of interconnected loads and distributed energy resources. It must lie within a clearly defined electrical boundary. And it must act as a single controllable entity, which can connect and disconnect from the grid and operate in both grid-connected or island mode.

In evaluating proposals, NYSERDA will look at microgrid capabilities, technical design, commercial, financial and legal viability and a benefit/cost analysis. The authority also will take into account other considerations, such as potential benefits of the microgrid to the local utility, support from public interests, and how the microgrid platform helps customers interact with the grid.

NYSERDA also is asking applicants to describe the path that the municipality has established for procuring services from the microgrid. The authority says it wants to foster communication between the parties to avoid issues over procurement later.

The eight winners will have an opportunity to vie for additional funds in the third stage of the $40 million competition, which will be issued at a date yet to be specified.  Third-phase funds will go toward microgrid construction, but winners will be expected to secure private capital for the majority of projects costs. So the state will look more favorably upon stage 3 competitors that offer a higher cost sharing amount.

Under a tentative, schedule the state will issue phase II contracts in December and open competition for the third phase in January 2018 with an eye toward choosing final winners in June 2018.

Funding aside, the NY Prize is expected to advance the microgrid market just by the amount of valuable data collected through the feasibility studies submitted in Phase I. NYSERDA is now sifting through the information, which includes microgrid costs, and expects to release an analysis over the coming months.

Micah Kotch, NY Prize director, noted that many NY Prize participants have “already made significant progress in identifying world-class partners to help design and build these critical systems. The state looks forward to continuing our work with communities, their partnering utilities, and innovative companies to advance local power and create models for others to replicate.”

Those who do not win may still be able to tap into state help, possibly for energy efficiency or renewable endeavors that they identified while researching microgrids.  They will be connected to resources at NYSERDA, the New York Power Authority, their local distribution utility and private sector companies.

The NY Prize phase II RFP is available here: www.nyserda.ny.gov/rfp3044. A NYSERDA report on Microgrids for Critical Facility Resiliency in New York State provides guidance for communities considering applying for phase II funding.

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About the Author

Elisa Wood | Editor-in-Chief

Elisa Wood is the editor and founder of EnergyChangemakers.com. She is co-founder and former editor of Microgrid Knowledge.

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