N.Y. outlines plan for replacing renewable standard, awards 7 storage grants 

Source: Colin Sullivan, E&E reporter • Posted: Thursday, June 4, 2015

Precisely how the Empire State will approach distributed generation and energy storage under its “reforming the energy vision” process has begun to take shape with major announcements this and last week by the New York State Energy Research and Development Authority on both fronts.

NYSERDA, which is officially billed as a public benefit corporation but operates much like a state-run utility, has filed a proposal with state regulators detailing how it wants to approach renewable energy after the state’s renewable portfolio standard ends later this year.

Separately, the organization last week announced awards to seven companies looking to scale up or invent new approaches to energy storage.

Both areas are key parts of the reform effort know as REV, which is seeking to break down barriers to distributed generation set up by the old way of managing the electric grid in favor of a less centralized approach.

On renewables, NYSERDA — which runs the RPS and handles procurement — told the New York Public Service Commission it favors $1.5 billion over the next decade for large-scale solar, wind and other technologies. This funding level is consistent with prior levels under the RPS.

The organization said the funding level would demonstrate a long-term commitment to renewables that might set the technologies “on a path to a subsidy-free market and [provide] opportunities for customers to more easily procure clean power on their own.”

NYSERDA added that its filing with the PSC takes into account local industry and market feedback in an attempt to align with how the REV process will unfold later this year when those rules approach the finish line.

The organization has run the RPS since 2004 and has been largely responsible for the “main tier” component of the program, leading to about 1,800 megawatts of wind power. Most of the solar in the state is smaller scale, often on rooftops and comes under the “consumer tier” component and the New York Sun initiative.

Perhaps more importantly, the NYSERDA filing proposes adopting the following rules under REV to help large-scale renewables expand:

  • Bundled power purchase agreements (PPAs) “to reduce costs and electricity price volatility.”
  • Flexible procurements “to increase competition and ensure the selection of the lowest-cost projects.”
  • Centralized project solicitation/evaluation by a third party.
  • Procurements based on planned budgets, system needs and other considerations.
  • New incentives to facilitate voluntary market activity.
  • Securitization to lower the cost of project debt.
  • Long-term budget commitments from lawmakers in Albany.

The RPS will expire at the end of 2015 without having met the 30 percent goal it established, coming in closer to 25 percent by the end of the year. Despite that, environmentalists are urging the state government to adopt a 50-percent-by-2025 commitment in its place and insist the market in New York is barely tapped.

“The [PSC] should commit to 50 percent renewable energy for New York and start a proceeding to define the utilities’ role in purchasing renewables through power purchase agreements and other flexible renewable energy contracts such as contracts for differences and feed in tariffs,” wrote the Sierra Club recently in comments to the PSC. The group also called on REV to introduce a price for carbon.

Lisa Dix, senior New York representative for the Sierra Club, expanded on that position in an interview, saying she believes the rules recommended by NYSERDA will help the wind industry in particular and could lead to the state’s first-ever offshore wind facility, as well.

“What they did is they submitted options for how this large-scale program could look,” she said. “It gives the program the certainty that we were looking for.”

Dix stressed the importance of flexible contracts, noting the former process under the RPS was for 10- and 20-year renewable energy credit contracts. Opening up the contracting process to more innovative methods, she hopes, will enable New York to expand its renewable capacity by about 2 percent a year to achieve the 2025 50 percent goal.

“It’s really moving in the right direction,” she said. “We have been arguing for new flexible contracts. [The REC approach] just wasn’t working for renewable energy developers.”

A boost for batteries

Also announced were awardees for a round of funding meant to spark “bench-to-prototype” energy storage devices, though exact amounts were not released by NYSERDA.

The funds will go to seven companies that are members of the New York Battery and Energy Storage Technology consortium and cover advanced batteries, ultracapacitors, fuel cells and control modules.

Among the awardees are Urban Electric Power in New York City, which has developed a zinc-manganese-dioxide battery chemistry in a bid to reduce the total cost of storage in grid-based applications; Bren-Tronics, a supplier of rechargeable lithium batteries to the U.S. military; Applied Power Systems, which is working on a battery charger for transportation applications; and Varta Microbattery, looking at energy storage for solar projects and an “island interconnection device” that allows a microgrid to connect or disconnect from the main grid.

Energy storage is also gaining attention in New Jersey, where the state Board of Public Utilities this week proposed higher funding for such technologies, from $3 million a year under a clean energy program to $6 million.

The Board of Public Utilities in New Jersey said the higher funds will help to address some of the blackouts and supply constraints experienced in the aftermath of Superstorm Sandy in 2012. The board is actively attempting to tie any new storage to renewable energy as most distributed generation in the state is linked to the traditional power grid.

The announcements add to a regional focus on energy storage in recent months. In Massachusetts, regulators recently started a $10 million program to explore what energy storage applications make the most sense, while Connecticut will spend $3 million on a microgrid project that includes storage.