New York Opens the Year with a Triple Boost for Energy Storage

New York Gov. Andrew Cuomo gave energy storage a triple boost yesterday with the release of a series of new climate change initiatives.

Second, he proposed that the NY Green Bank commit $200 million to drive down energy storage costs and deploy it where most needed on the grid. In addition, Cuomo directed the New York State Energy & Research Development Authority (NYSERDA) to apply at least $60 million to pilots and activities that will reduce barriers to energy storage, such as delay and obstructions caused in permitting, customer acquisition, interconnection, and financing.

The third boost comes indirectly by way of new restrictions Cuomo proposed for a market rival to energy storage, fossil fuel peaking generators. Peaking units that generate 25 MW or less are now exempt from carbon dioxide restrictions of the Regional Greenhouse Gas Initiative, a multi-state cap and trade program in the Mid-Atlantic and Northeast. However, Cuomo wants to broaden the restriction to include the smaller plants, arguing that many peakers are highly-polluting and often located close to population centers and low-income and minority communities.

Energy storage as rival to peakers

In his announcement, Cuomo did not address the peaker limits in terms of energy storage. However, any curb on use of peaker plants could open the door for more use of batteries. Batteries act as an alternative to peaking plants, since they too can discharge energy quickly onto the grid when a sudden need arises.

“Energy storage is already replacing peaking power plants, and we expect this trend to accelerate as the cost of storage declines,” said Kelly Speakes-Backman, CEO of the Energy Storage Association. “In New York, we already know from previous studies that NOx and other pollutants from peakers in the New York City metro area could be greatly reduced by using energy storage. By setting a target for energy storage and at the same time exploring ways to reduce pollutants from peaking units, New York is demonstrating an important way to save New Yorkers money while protecting their health.”

The extent to which energy storage is able to sell services into wholesale markets depends largely on rules set by regional grid operators, like the New York Independent System Operator (NYISO). Speakes-Backman said that ESA and other stakeholders are now working with NYISO to ensure that both capacity and ancillary services markets allow energy storage to participate effectively and fill any gaps left by retired peaking units.

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Applying the greenhouse gas restrictions to peaker plants will be part of a larger change in RGGI’s carbon dioxide cap that member states have already agreed to. Cuomo will direct the New York Department of Environmental Conservation (DEC) to undertake a rule-making in 2018 to make the changes.

In addition, Cuomo asked DEC to make complementary reforms to reduce emissions of smog-forming pollutants from peaking units and to adopt regulations ending the use of coal in the state’s power plants by 2020.