New York grid operator says wholesale market will drive investment in energy storage – EQ Mag Pro
There could be nearly 13GW of energy storage on the grid in New York by the middle of this Century, providing an “exceptional tool” to help balance renewable energy generation, the CEO of the state’s network operator has said.
The New York Independent System Operator (NYISO) earlier this month issued its annual Power Trends report, analysis into the state of play on the power grid and wholesale markets, which it is responsible for.
“We view storage as an incredibly, potentially valuable asset and we anticipate that the addition of new storage will give us an exceptional tool that will help us balance the intermittency of… both wind and solar,” NYISO’s CEO Rich Dewey said in a presentation of some of the key Power Trends 2022 findings.
The system operator expects to see an uptick in the amount of storage on the grid to be driven by changes in wholesale market rules it has made to enable wider participation and therefore increased revenues for energy storage, whether electrochemical like lithium batteries, or mechanical, like pumped hydro.
New York’s Climate Leadership and Community Protection Act (CLCPA) legislation put in place in 2019, requires the state to get 70% of its energy from renewable sources by 2030 and to make its electricity supply 100% emissions-free by 2040.
To help achieve that aim, the state also introduced a 3GW energy storage deployment target by 2030, which was doubled to 6GW by Governor Kathy Hochul in her State of the State Address at the beginning of this year.
However, NYISO also asserted that energy storage technologies as they are today would not be sufficient to run a grid on mostly or totally renewable energy. That task will require more than the relatively short durations of battery storage deployed at scale around the world, Dewey said.
So-called “dispatchable, emissions-free resources” will be needed as well. Although Dewey said that possible examples of these could include hydrogen in the gas grid or some kind of carbon capture and storage, he said it was clear there is a gap that needs to be met with a technology or set of technologies that is still to be introduced to the market.
Even in the present day, New York’s planning reserve margins for energy are starting to wear thin, according to NYISO, with fossil fuel resources currently retiring faster than clean energy additions come online. In 2021 there was actually a slight increase in carbon emissions relating to the closure of Indian Point nuclear plant and the turn-up of fossil fuel generators to step in.
NYISO’s ‘Tale of two grids’
New York’s other major challenge is its “Tale of two grids” as the operator dubbed it. Basically, the New York City urban region, which has high carbon intensity, very few renewable energy resources and very high demand, versus the out of town and Upstate regions which are already much less reliant on fossil fuels, largely thanks to hydroelectric resources but also much lower demand.
Unsurprisingly, the grid operator made the case for investment into transmission resources to alleviate the constraints that prevent energy being taken into downstate New York from outside resources, including the 9GW of offshore wind the state’s CLCPA legislation mandates for deployment. Several such projects are already being developed through a Request for Proposal (RfP) launched by New York State Energy Research and Development Authority (NYSERDA).
The state also has in place a 10GW target for distributed solar as well as strict targets for reduction of greenhouse gas emissions (GHGs) from buildings, all of which is also likely to drive the case for behind-the-meter (BTM) energy storage, which can help reduce demand on the transmission system.
Wholesale market changes for energy, capacity markets and ancillary services will help drive investment into grid-scale and behind-the-meter energy storage, NYISO said.
According to the New York Department of Public Service (DPS), as of the end of 2021, there were 1,230MW of deployed, contracted or awarded energy storage projects in the state, equivalent to 80% of an interim 1,500MW by 2025 policy target.
DPS also noted that there were 12GW of storage in New York interconnection queues at that time, Energy-Storage.news reported in April.
NYISO’s revisions to the wholesale market include filing compliance proceedings for the Federal Energy Regulatory Commission (FERC) Order 2222, which requires transmission system operators to reconfigure wholesale markets to allow distributed energy resources (DERs) to participate.
It also filed for FERC’s approval for tariff modifications that would remove buyer-side mitigation (BSM) costs for energy storage aggregation and received approval for rule changes that would allow energy storage co-located with wind or solar PV to take part in wholesale markets as separate assets to the generation.