Expanding Energy Storage: Challenges and Opportunities

Energy storage systems will play a key role in role in reaching New York’s 50% by 2030 renewable energy generation goal. Using energy storage systems, such as large-scale batteries can help drive down electricity costs, integrate renewable energy, and provide a stable supply during peak electric usage or operate critical systems during a grid outage. Scaling them up, however, is proving to be a challenge.

The primary two currently available renewable energy technologies, wind and solar energy, have the advantage of complementing each other, with wind energy peaking at night and solar during the day. The challenge is that without storage, energy must be transmitted to the grid for use right away. That often means we can turn off the dirtiest power generators, but at the same time generating capacity of renewables is often wasted. For example, when demand is lowest at night and wind is at its highest potential, turbines often need to be turned off so as not to overload the grid. Battery storage can help the grid operator and utilities better plan and fully utilize existing assets, ensuring reliability, a consistently larger percentage of clean energy usage, and also bringing down cost.

An additional impediment is the lack of renewable baseload technologies that can satisfy demand when wind and solar cannot. Currently, Indian Point plays a key role in ensuring reliability. As it is phased out, however, replacing the lost capacity with natural gas may prove controversial in a state striving to meet ambitious emissions and renewable energy goals. Just last week, NYISO said it could take as many as three natural gas plants to ensure reliability after Indian Point goes offline.

Energy storage can help to fill that gap. A battery technology trade association released a study earlier this year arguing that energy storage, paired with renewable energy and efficiency, could replace as much as a quarter of Indian Point’s 2,000 MW of capacity at a lower cost for consumers by 2021. Especially as large scale offshore wind farms come online south of Long Island and New York Harbor, battery storage will be critical to unlocking their full potential.

A few weeks ago, Governor Cuomo signed A. 6571/S.5190 to make New York the fourth state to adopt an energy storage target, following California, Massachusetts and Oregon. The bill calls for the New York State Energy Research and Development Authority (NYSERDA) and the state’s Department of Public Service (PSC) to come up with a portfolio of energy storage policies, including a storage target, in the first quarter of 2018.

NYSERDA hopes to complete its piece of the energy storage roadmap in the first quarter of 2018. NYSERDA President Alicia Barton said that the energy storage goal could lead to new opportunities for microgrids: “We think that 2018 is going to be an exciting year for the energy storage conversation in New York. This legislation sets a strong, high level signal. And now we are going to turn to the work of implementing details.”

Despite such pronouncements, only 4.8 MW of storage had been deployed in New York City by the end of 2016. Permitting has been identified as a significant barrier. The process has been described as “arduous.” In addition, out of an abundance of caution due to New York City’s density and the uncertain dangers of large-scale lithium-ion batteries, fire safety regulations have made installing such devices prohibitively expensive. Reports have suggested water and ventilation requirements can be reduced without a significant sacrifice to safety.

In the end, the state’s new program will be shaped by the PSC and NYSERDA but the target is expect to be a goal, not a mandate. When the legislature reconvenes in January, it’s expected that amendments to the bill will be passed. The Governor wants to ensure that any energy storage goals line up with the existing Reforming the Energy Vision (REV) plan and its associated goals. For example, seeks to avoid surcharges on ratepayers and find market-driven solutions instead. A chapter amendment could give more flexibility to the PSC to determine how to fund the program.

There is still a great deal to figure out with the state’s energy storage program, but it appears that policymakers and government officials are headed in the right direction. We look forward to continued progress in 2018, with significant benefits for both consumers and our climate goals on the horizon.