A 400-megawatt-hour battery from 174 Global Power will balance NYC’s energy needs with increasing offshore wind power capacity.
New York utility Con Edison has signed its biggest energy storage contract to date, a 100-megawatt/400-megawatt-hour lithium-ion battery project that will help balance a grid facing rising levels of offshore wind and other renewable power in the years to come.
Under the contract announced Wednesday, developer 174 Power Global will build the battery system, and Con Edison will bid its power into New York wholesale energy markets for seven years after it starts operations in 2022. After that, 174 Power will take over the battery system’s operations and wholesale market value.
The project being built at a former power plant site in Astoria, Queens is the first bulk energy storage system to be contracted under Con Edison’s request for proposals process launched last year. It’s the biggest utility-contracted battery in the state thus far, though independent power producer LS Power is planning to build at least 300 MW/1,200 MWh of batteries at its Ravenswood power plant in Queens.
New York will need a lot more energy storage to meet its goal of reaching 70 percent renewable electricity by 2030 and a carbon-free electricity system by 2040. The state has set targets of 1,500 MW of storage by 2025 and 3,000 MW by 2030, and it has created a set of policies including incentives for storage developers and procurement requirements for its biggest utilities.
Financial terms of the deal were not disclosed, although a Con Edison spokesperson said that the project was likely to come in at an industry-standard project cost of $1 million per megawatt plus an additional 25 percent premium for land and development costs in New York City. The state-owned utility New York Power Authority owns the land, which is the site of the former Poletti power plant.
The size of the battery and the economics to justify it represent a big departure compared to the batteries built in the state so far. The biggest to date is the 20 MW/16.5 MWh system developed near Albany by Key Capture Energy.
In New York City, the biggest battery is the 4.8 MW/16.4 MWh Gateway Center project built by developer Enel X to serve Con Edison’s need to reduce grid congestion and defer grid upgrades as part of its Brooklyn-Queens Neighborhood Program. Grid reliability is also the core use case for Con Edison’s 2 MW battery at Ozone Park in Queens and for a 1 MW demonstration project with Shell/GI Energy in Staten Island.
A battery business case geared toward a renewables-rich future
The new battery with 174 Global Power, by contrast, will be serving the wholesale energy, capacity and operating reserves markets of state grid operator NYISO. At present, it’s not clear that these markets will offer the revenue to justify this business case, Daniel Finn-Foley, energy storage director at Wood Mackenzie, said in a Wednesday email.
But downstate New York is facing significant supply-demand imbalances that will require large-scale energy storage to manage, he noted. New York City and environs make up most of the state’s electricity demand but have less than one-third of the state’s current renewable energy capacity, and there’s not enough transmission capacity to carry all of New York’s ample upstate wind and hydropower to its downstate load centers.
New York’s plan to close the Indian Point nuclear power plant by next year and retire its most polluting power plants by 2025 will only exacerbate this imbalance. Work is underway to build out the transmission system between upstate and downstate, but those projects are still years from completion.
At the same time, New York has also set a target of 9 gigawatts of offshore wind power by 2035. It has already awarded 1.7 GW of offshore wind contracts set to be online by mid-decade and opened a solicitation for up to 2.5 GW more this summer.
All that offshore wind will need to be connected to transmission systems in Long Island and New York City, and be balanced with a grid that will be rapidly electrifying its building heating and transportation needs now served by fossil fuels.
“Wholesale market revenue today may not be enough for a storage system like this to pencil out, but, like planting an orchard, it’s an investment in the future,” Finn-Foley said. “With massive amounts of offshore wind planned over the coming decade, this project will allow Con Ed to move toward its 300 MW interim storage target while 174 Power Global plans for a rich harvest down the line.”
Con Edison has not awarded any other projects from its 2019 solicitation that would help meet its 2023 target for 300 MW of storage with at least four hours of storage capacity. But its pending petition with the New York Public Service Commission is expected to lead to additional procurements of utility-scale storage when approved next year, a Con Edison spokesperson told Greentech Media.