N.Y.’s old ‘peakers’ prime target for energy storage

Source: Saqib Rahim, E&E News reporter • Posted: Monday, June 25, 2018

New York energy officials want utilities’ help in finding the most vulnerable fossil fuel plants in the state and exploring whether energy storage could replace them.

An energy storage road map released yesterday by state officials estimates there are roughly 3,000 megawatts of “peaker” plants — which run on oil and gas, and are used rarely — downstate. The report said these plants are candidates for being supplemented, or outright replaced, by energy storage.

Utilities should provide data on the peakers, said the document, authored by the New York State Energy Research and Development Authority (NYSERDA) and the Department of Public Service (DPS). “The data will help developers identify peaker locations that could be good candidates for storage,” it said.

The road map is one of the first concrete steps Gov. Andrew Cuomo (D) has taken to implement the energy-storage target he set this year. It’s also the latest sign that some states see energy storage technology as developed enough that it’s a meaningful option for taking at least some fossil generation off the grid.

New York, a state with heavier grid traffic and higher prices than most, offers plenty of entry points. The New York City region is particularly attractive to policymakers, though, because power demand sometimes gets so high that a fleet of oil and gas plants — with an average age approaching 50 years — has to fire up for a few hours.

In January, Cuomo called for 1,500 MW of deployments by 2025. NYSERDA and DPS were charged with figuring out how that might look in the real world, and the road map is their initial product.

“We have observed along with the rest of the industry that system costs are falling dramatically. And we believe that they are going to continue to fall based on the best available information we have,” Alicia Barton, president and CEO of NYSERDA, told E&E News.

She said that if the state passes supportive policies, “those cost declines will happen faster.”

Cuomo is running for his third term this year. The Democratic primary is in September, and the general election is in November.

One of the road map’s tasks was to imagine how, and where, 1,500 MW could go in New York. One plausible scenario, it said, is an even split among three main categories of applications: customer-sited, distribution-level and bulk. Examples would range from home arrays to small neighborhood arrays to large battery farms.

The report warned against waiting too long to hit the goal — thereby ensuring that it will be missed. That’s a criticism often heard in Northeastern states, which often fall short of their climate and renewable energy targets, and it’s a warning well taken for energy storage, which is a young technology.

With the road map out, the ball passes to the Public Service Commission, which regulates the state’s utilities.

The PSC will take public comments on the energy storage report. Cuomo’s goal is that by the end of the year, the PSC will write the storage goal into its regulations and also approve mechanisms to start deployments.

According to Barton, the state has $350 million already available to fund the efforts, thanks to ratepayers.

While some of NYSERDA’s critics have called these collections something of a slush fund for the governor’s energy programs, Barton — who joined the administration last year — said the real goal is to subsidize, then let the market take over.

“We absolutely are aiming at a future scenario where storage is cost-competitive, and that’s why this would be a short-term incentive for us to get line of sight to the time where storage would be sustainable on its own without incentive funding,” she said. “And we believe that is in sight toward this 2025 target.”

Energy storage has historically been seen as a premium technology, too expensive to deploy except for certain niche markets. In New York City especially, there are other impediments. The New York City Fire Department has expressed concerns about its ability to fight fires in high-density areas; it’s currently in talks to assuage those concerns.

In New York City, the beachhead may be in combining solar with storage. The Cuomo administration announced yesterday that it’s supporting a solar-plus-storage combination at Queens College. (Another array exists at a state university campus upstate, and another is being planned farther upstate.)

The array would combine solar panels on campus rooftops with lithium-ion batteries sitting in a trailer-like box outside. The batteries would charge up with solar power during the day.

Because the campus sits in a residential area, power demand spikes in the evening. At that point, the array would send its power out to the grid, exactly when power tends to be at its most expensive.

During major power outages, the array would also provide the campus its own independent power source.