|Does New York have a renewables mandate?||Yes||50 percent by 2030|
|Does New York have a state mandate or target for storage?||Yes||1,500 MW by 2025|
|Does New York offer financial incentives for energy storage development?||Yes|
|Does New York have a policy for the strategic deployment of Non-Wires Alternatives or Distributed Energy Resources to defer, mitigate, or obviate need for certain T&D investments?||Yes|
|Does New York have a policy addressing multiple use applications for storage?||No|
|Does New York have a policy on utility ownership of storage assets?||No|
|Does New York allow or mandate the inclusion of energy storage in utility IRPs?||Yes|
|Has New York modified its permitting or interconnection requirements specific to energy storage?||No|
|Does New York allow customer-sited storage to be eligible for net metering compensation?||Yes||(Energy storage projects paired with eligible DER are eligible)|
|Has New York revised its rate structures to drive adoption of behind-the-meter storage?||Pending|
|Approximate development of storage capacity in New York.||Approximately 1,460 MW of storage deployed|
Supported by a clear vision articulated by the state’s governor, actions by the New York Legislature and New York Public Service Commission (NY PSC) have solidified the role of energy storage as an important foundation of the state's transition to a clean energy-powered future. In fact, New York has established one of the most aggressive procurement targets for energy storage in the country with its pledge to meet a target of 1,500 MW of storage deployed by 2025. By comparison, California has a 1,300 MW by 2020 target; Massachusetts is pursuing a target of 2,00 MW by 2025, and New Jersey recently adopted a 2,000 MW by 2030 target.
At this time, energy storage is still in the early stages of development in New York (as is the case with other states). Approximately 1,460 MW of storage have been deployed in New York, of which approximately 1,400 MW of pumped hydro at two New York Power Authority facilities. The largest non-hydro storage facility in the state is a 20-MW flywheel used for frequency regulation, operated by Beacon Power in Stephenstown, N.Y. Beyond that, another 100 MW of storage is in various states of development, mostly in constrained downstate regions, and about six other battery storage projects that in aggregate total 430 MW.
New York is defining energy storage policy within the broader efforts contained in the Reforming the Energy Vision (REV) initiative, which has been in place since 2015 and aims to make a number of systemic changes to the state’s regulatory model and operational requirements. REV’s clean energy goals for 2030 include:
Provisions of the REV proceedings include moving New York utilities from a cost-of-service business model to a market-based model. Specifically, utilities will maintain their former status as energy distributors, but will also assume the role of "market operators," facilitating transactions between those who provide energy and those who use it. Utilities will be incentivized to use DER in their grid planning efforts. In this new role, utilities will own the distributed service platform that DER sellers and retail customers use to buy and sell electricity. REV envisions that current utilities in New York state will become a sort of “mini-ISO” as it relates to DERs. Utilities will be incentivized to use DER in their grid planning efforts.
The REV policy is being executed in two tracks. Both tracks seek to meet the same three goals: Track One described in an order released on February 26, 2015, focuses on shaping the new utility vision and DER ownership challenges. Track Two described in an order released on May 16, 2016, focuses on the necessary changes in the current regulatory, tariff, market, and incentive structures.
With regard to the development of energy storage specifically, New York is in the midst of developing an energy storage policy framework that can support what is anticipated to be a robust market in both the state’s distribution system and wholesale market managed by the New York Independent System Operator (NY ISO). To date, New York’s energy storage policy framework has utilized procurement targets, financial incentives and demonstration projects to jumpstart the energy storage marketplace in the state. Two specific areas that have been the core tenets of New York’s storage policy are: 1) financial incentives provided by the state that are geared toward enabling the unique system benefits storage can provide; and 2) changes in rate design that would enable a shift toward energy storage, which are being assessed as part of the broader REV initiative.
In February 2018, Governor Andrew Cuomo’s State of the State address included a clean energy agenda, in which energy storage (and energy efficiency) targets were promised by executive directive (to be subsequently implemented by the New York PSC). The energy storage initiative set New York on the trajectory to achieve 1,500 MW of storage by 2025 and up to 3,000 MW by 2030. (The energy efficiency target for investor-owned utilities aims to more than double utility energy efficiency progress by 2025). Governor Cuomo added another goal, pledging to make New York's electricity supplies 100 percent free of carbon dioxide emissions by 2040. Both announcements were made as part of the governor’s wider REV initiatives that includes a Clean Energy Standard to generate 50 percent of the state's electricity from renewable energy sources by 2030.
Other state-level agencies are directly involved in the development of energy storage policy in New York. Perhaps most directly involved is the New York State Energy Research & Development Authority (NYSERDA) conducts energy analyses, provides financial aid for energy-related projects, and arbitrates programs related to energy efficiency and renewable energy. In response to the governor’s State of the State address, NYSERDA, in collaboration with the New York Department of Public Service, developed the New York State Energy Storage Roadmap to identify key policies, regulations and initiatives instrumental to achieving what would become the formally adopted goal aiming for 3,000 MW of energy storage capacity by 2030.
The Roadmap offers an approach and a series of recommended actions that are
intended to achieve the Governor’s 1,500 MW target for energy storage. Key provisions of New York’s Energy Storage Roadmap include:
As outlined in the Roadmap, the New York State Energy Research and Development Authority (NYSERDA) established, as part of its Clean Energy Fund, a $15.5 million funding program for energy storage projects. Through the funding program, NYSERDA is seeking proposals for early stage product development (up to $200,000 per award), product development (no award limit) and product field testing (up to $1 million per award). The bridging incentive is intended to jumpstart the energy storage market in the state of New York.
o 8 PSL §74(1) defines a “qualified energy storage system” as a “commercially available technology that is capable of absorbing energy, storing it for a period of time, and thereafter dispatching the energy using mechanical, chemical, or thermal processes to store energy that was generated at one time for use at a later time.”
1. Retail rate actions and utility programs: Improve customer delivery rates and programs like dynamic load management (DLM) programs to send more accurate price signals.
2. Utility roles and business models: Incentivize utilities to manage the full customer bill, leveraging assets such as Non-Wires Alternatives (NWA) and unused real estate to reduce ratepayer costs.
3. Direct procurement: Use direct procurement approaches through utility NWAs, the Renewable Energy Standard (RES), and the State’s “Lead by Example” initiatives to expand the market for energy storage.
4. Market acceleration incentives: Utilize “bridge incentives” to accelerate soft and hard cost reductions.
5. Soft-cost reductions: Reduce soft costs by, for example, expanding access to more granular system load data and increasing access to a skilled workforce.
6. “Clean peak” actions: Develop approaches to CO2 reduction compensation that varies with time, and integrate the DEC’s draft combustion turbine peaking unit regulations into energy storage policy.
7. Wholesale market actions: Reform wholesale and retail market rules to better enable and coordinate energy storage services when technically and economically feasible
Even against the backdrop of the massive REV proceedings in New York, there are still a number of policy issues related to energy storage that are still being vetted by the state’s stakeholders. Three significant policy issues that still require resolution in New York include:
A summary of these issues currently under discussion in New York is provided below.
From the utilities’ perspective, questions remain regarding the ownership models and applications for storage that will emerge from REV initiatives.
Achieving a full array of utility and customer benefits through the development of energy storage may require a variety of storage scale, ownership, and control scenarios. However, in general the New York PSC has made clear through various REV orders and proceedings that utility ownership of Distributed Energy Resources (DERs) would be prohibited, barring a few specific exceptions. DERs in this case is considered to be distributed generation, storage used for economic purposes, and customer-side demand management. However, the exceptions outlined by the New York PSC could prove to be favorable to utility-owned energy storage as a DER.
Exceptions for utility ownership of energy storage assets currently include the following circumstances:
There are stakeholders in New York, including utilities, that continue to make the argument that storage deployment at a scale optimal to the power system, which could include utility ownership given that utilities historically have been most informed of grid needs and positioned to deploy resources throughout their territories. As energy storage technologies and opportunities continue to mature, it is likely that utilities will continue to challenge the prohibition against ownership.
One of the key elements in New York’s Energy Storage Roadmap is creating the potential for energy storage to draw revenues from both the retail market and wholesale markets. This is consistent with policy objectives established by FERC’s Order 841, and was viewed positively by storage developers as it opens the possibility for storage technologies to pursue multiple revenue streams based on multiple-use applications. However, based on the New York ISO’s (NY ISO’s) filing response to FERC’s Order 841, this is still likely unsettled policy and a potential conflict.
Here’s how: Order 841 directs ISOs and RTOs to develop revisions to existing tariffs to open up their wholesale energy, capacity and ancillary services markets to energy storage resources on a nondiscriminatory basis. Grid operators had to submit their compliance filings by Dec. 3. However, in its filing NY ISO does not accommodate dual participation in both retail and wholesale markets. The NY ISO also requested an extension from FERC on the implementation of its new rules for energy storage in the wholesale market to May 2020.
This potential policy inconsistency may take some time to resolve, with strong arguments on both sides of the issue. Being able to participate in the ISO is going to be key to the full implementation of energy storage in New York. However, because the NY ISO is not under the jurisdiction of state agencies the goals outlined within New York’s Energy Storage Roadmap may be difficult to achieve unless participation in the wholesale markets is approved.
Siting storage projects in highly congested areas, such as New York City, has remained a challenge as building and fire codes have not evolved sufficiently to address siting restrictions that impact storage development. One specific problem has been delays resulting from the Fire Department of New York's permitting processes and concerns about safety and the risk of fire associated with battery storage. The lack of clarity around standards pertaining to the indoor siting of lithium-ion battery storage systems has limited energy storage projects in the city. This lack of clarity is impacting storage development and thus the potential to meet targets the state has established.
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