New York has some of the most aggressive clean energy policy goals in the world via its Climate Leadership and Community Protection Act, targeting decarbonisation of its electricity sector by 2040. Energy storage is expected to play a vital role, with the Act introduced by Governor Andrew Cuomo including a target of 3GW of storage deployment by 2030 to support the transition away from reliance on fossil fuels.
New York Power Authority (NYPA), a public power organisation which serves around a quarter of the US state’s electric load, said on the release of its strategic plan VISION2030 in December that it wants to lead by example with a commitment to cost-effective clean energy that could see NYPA reach emissions-free electricity by 2035.
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That plan included enabling 450MW of energy storage on its networks within 10 years. NYPA also said it would be a “first-mover” in developing and demonstrating long-duration as well as short-duration battery storage. It’s fair to say the potential for battery storage in New York was talked about for a long time before deployments began, partly due to the state’s strict safety codes in its urban areas.
Yet since developer Key Capture Energy deployed the first multi-megawatt large-scale battery system in upstate New York a couple of years ago, NYPA has certainly been among those leading the push for more rapid, scaled, safer and affordable development. Initiatives have included a commitment to building a 20MW project of its own, which like the utility itself will remain in public ownership; a pilot project to deploy a lithium-ion ‘Supercell’ battery unit at one of its offices that it is hoped will prove that batteries and urban buildings can coexist in harmony; and also a deal to rent out land on one of NYPA’s former fossil fuel plant sites for Con Edison and 174 Power Global to build a 100MW / 400MWh battery project.
Others include a planned pilot for long-duration zinc-air batteries with manufacturer Zinc8 and an ongoing investigation of how NYPA can replace its fleet of gas peaker plants with cleaner alternatives.
NYPA raises revenues mainly through electricity sales from its 16 generation assets — around 80% of which are hydroelectric power plants. It doesn’t get tax money or state subsidies so it has to operate in a lean and nimble way. Energy-Storage.news speaks with chief commercial officer (CCO), Sarah Salati, who leads economic development programmes at NYPA as well as bidding the group’s assets into wholesale markets.
Energy-Storage.news: As CCO for NYPA, what do your duties include? And where do lithium-ion and other energy storage technologies fit into that?
Sarah Salati, NYPA CCO: I have a broad portfolio to date, bidding and contracting of our generation assets into the wholesale market and economic development programmes, which is low-cost hydro in exchange for capital commitments and job creation retention in New York State.
Then also grid-scale development, which has predominantly been transmission with also some large-scale storage. And also our customer-facing business lines, which are a range of products and services: from traditional energy efficiency retrofits, to our New York Energy Manager, which is a digital building energy management system, and the first electric vehicle public charging infrastructure that's going to be built out across New York State. And then all of our customer-sited distributed energy resources (DERs).
I’ve been with NYPA for about two-and-a-half years, but from Day One, energy storage was already an area of focus for us. The Climate Leadership and Community Protection Act was legislated two years ago and had targets for various technologies: 9GW of offshore wind, 6GW of DERs and 3GW of energy storage to be put on the grid.
Within that, my team set targets for what amount we would help to contribute and facilitate on the grid-scale. And then behind-the-meter, anytime that we're putting solar panels at customer sites, we always are looking for an option for pairing with energy storage. We've had a couple of great marquee projects. One that comes to mind is the solar rooftop on the Javits Center [large convention centre], which is also being paired with battery storage.
‘The original renewables company in New York State’
As we understand it, it’s taken a while to get the parameters set up right for deployments in the state?
Clearly in other markets, you've seen use cases, PJM with frequency regulation several years ago being one, but then you got to a point where it was saturated and the pricing really tanked. But the projects that went in early, got good paybacks and very strong paybacks.
Within New York, it continues to evolve. The legislation, but also the funding and incentives that New York State Energy Research and Development Authority (NYSERDA), our sister agency, has put into place with Market Accelerator Bridge Incentives (MABI) funds that look at hundreds of dollars per kilowatt on a sliding scale as more storage is integrated into the grid, are other ways that New York has been promoting storage, as well as just generally the evolution that's coming with distributed markets and wholesale markets and being able to count storage towards capacity payments, even at a lower sliding scale in terms of duration of capacity.
You mentioned that a lot of your work is around bidding some of those hydropower resources into the market. I guess in a way NYPA is quite fortunate, I suppose, in having that base of quite clean resource, something like 80% of your generation…
We provide about 25% of the energy to New York State and three quarters of that is our hydro. I just say that NYPA was the ‘original renewables company in New York State’! It is also the original storage company, because we have our Blenheim-Gilboa pumped hydro storage facility, as well as the reservoir at our Niagra plants. So pumped hydro provides over 1.5GW of storage capability to the state.
Lithium-ion and other technologies have some way to go to catch up there, but is it true also that the beauty of lithium and some of those new technologies is that they can be distributed and put where they are most needed?
Exactly. That is the benefit of storage. The implementation, the ability to pick it up and move it should you need to, so that is a possibility. In terms of what NYPA has been looking at doing, we have the 20MW one-hour battery (20MWh) that's being put into the North Country. Typically, energy arbitrage is not always the use case, the business case, that pencils out.
But that was an area [where] because of the massive amount of wind that's in the North Country there and the negative pricing that was entering, the ability to charge the battery at points when there is a lot of negative pricing and discharge it when it's needed, was what we're looking to do there. It's very much a demonstration project and we're going to be enabling universities and others to look at the way it's operating in order to help advance storage in the state.
With respect to other activities that NYPA is trying to undertake, I'm a true believer in public-private partnerships. A great example of that is the fact that we are, as part of our VISION2030 strategy, we have five initiatives, one of which is transitioning away from natural gas.
We're looking at all the assets and land that we own, many of them are in load pockets, in dense urban areas. So what we did at our Poletti Power Plant site, in Astoria, Queens, was to lease out our land to a storage developer that bid into [utility] Con Edison’s 2019 Request for Proposal (RFP) for storage. Con Edison is going to need to procure up to 300MW / 1,200MWh by 2025. Our partner 174Global Power (developer, part of the Hanwha Group) was the winner of the Con Edison bid and there will be a 100MW / 400MWh storage facility at that site in the next couple of years.
We have a target as part of our VISION2030 of facilitating 300MW of grid scale storage. So we're already a third of the way in terms of that. That also speaks to the fact that NYPA doesn't need to own and operate everything, but really we're looking at facilitating the integration of storage into the state.
And with the more recent Governor’s State of the State Address (early 2021) and the focus on transmission, we obviously will continue to look at ways to use the case of transmission and distribution (T&D) deferral for storage as well, at the bulk level as well.
The Governor’s recent commitment to improving and upgrading New York’s transmission infrastructure didn’t really put down any new definite targets or plans in terms of energy storage, so will that be a question of figuring out what works best?
Well, we have so much of the renewable resources elsewhere in the state and the load is all in Southeast New York. So it's ensuring that we're not spilling water, we're not wasting the wind. And we're getting it where it’s needed.
‘New York State is very bold in its aspiration on clean energy – energy storage will support that’
Your role includes bidding generation assets into wholesale markets. Battery storage is so versatile in what it can do. What have been your experiences modelling what markets will look like once you get more batteries involved and what do you think that future might look like?
That's a really good point. Even the New York Independent System Operator (NYISO) is having to update all of its software it's using to try to incorporate all these smaller assets that can ramp up and down at extraordinary rates. It's similar for NYPA. We have an active trading desk, we're asset-backed so that we bid all of the generation that we have into the NYISO market on a daily basis, and then also in the real-time [markets] if that's needed.
What we're looking at doing and currently have underway is ensuring that we have the skillsets and platforms to be able to both model and bid these newer assets that are going to come into our portfolio. So it's one of the strategic initiatives that we have, because in the end, the state is looking to have 100% renewable energy supply by 2040. To do that NYPA has to as well be able to provide a 24/7 renewable product and so that will incorporate obviously, solar wind storage as well as our baseline hydro.
What have been some of the main challenges to date and conversely, in what ways has there been acceptance of new technologies like energy storage in and for New York?
I don't think that New York's any different than any other market. In the end, we're looking at cost-effective implementation of any new technology and to support the need. NYPA, from the beginning, has always known the value of storage because of our pumped hydro and the value that it's brought to the system.
Storage, lithium-ion, was brought in to try to solve intermittency and New York State is very bold in its aspiration. It's legislated to get to 100%, renewable by 2040, to have 3GW of storage on the system. We're working very hard to help facilitate and make that happen. What you see is the best of the public and private sector coming together either in partnerships that NYPA undertakes, with our land, our demonstration projects, and also with the incentives that NYSERDA is offering to help make this happen.
One challenge is that clearly distributed resources and storage can operate at the wholesale level and at the distribution level and the harmonisation of those two is a brave new world for distribution utilities and for the NYISO. It's about being able to value it sufficiently and providing the mechanisms in place for the value streams to come through to the technology as well.
We’ve seen that NYPA is looking very closely at options for replacing or retiring gas peaker plants, which can be expensive to maintain and own and polluting to use even if they don’t run a large percentage of the time and don’t represent a huge amount of capacity overall. Can energy storage play a role there?
In our VISION2030 strategy, we have five initiatives: preserving and enhancing the value of hydro, growing transmission, transitioning away from natural gas, reimagining the canal system which we run and working with our customers to reach renewable supply over the next five to 10 years, in accordance with the legislation and the policy objectives of the state.
The transitioning away from natural gas is a recognition that we have fossil fuel plants. We have a number of peakers in New York City, and in the wider area where there are requirements for reliability purposes that 80% of the generation be close to the load. We're working with environmental justice groups to undertake analysis to identify any range of technologies that can support transitioning away from natural gas, we also have some clean hydrogen or green hydrogen projects that we're looking to pilot as well.
It is a priority for us and storage is just one of the technologies and probably one of the more robust technologies that we have to tackle the issue, but we have a very strong environmental justice pillar in our strategy as well, as well as Diversity, Equity & Inclusion (DE&I) commitments. All of that is resulting in trying to identify and use our many customers in the city to install community distributed generation paired with solar, looking at installing EV chargers in areas that are typically disadvantaged.
We're also supporting the electrification of mass transit, working with the bus system across the state and also the Metropolitan Transit Authority (MTA) to support reduction of emissions in those neighbourhoods as well. NYPA is very committed. We see ourselves as leaders. And we have patient capital, unlike, sometimes the private sector. I think you'll see a lot of great work coming from NYPA in the next couple of years around that issue.
Are you looking to other areas such as California where energy storage, either paired with solar or standalone, is replacing natural gas as a peaking capacity resource on the grid? For example AES Corporation recently brought online the 100MW / 400MWh Alamitos battery plant which does that.
That project was one of the first examples of the ability to have storage replace gas peaking plants, so you see there with a contracting mechanism that it is possible. It’s case-by-case and in different areas, in terms of the resources that are available. What we've seen to date that's been very successful nationally, is frequency regulation, where the market’s been set up [right], peaking capacity, and T&D deferral. There's much more to come with the integration of such large-scale renewables like offshore wind, in New York State too.
VISION2030 talks about demonstrating and deploying long-duration technologies for storage as well as short-duration. Is there any sense yet of how big a proportion of your deployment targets might end up being lithium-ion as opposed to newer technologies such as flow batteries that could offer several hours of storage?
Typically I think the 3GW [state deployment target for] storage is going to be seen predominantly as lithium-ion, because it's the choice of the industry to date. Clearly for peaking capacity, depending on where it is, long-duration storage is what's necessary.
The technologies to support that are ones that we're also going to be looking at as we investigate opportunities to transition away from natural gas. We're agnostic when it comes to the specific technology, assuming that it's technically robust and that it's safe, and that it is reasonably cost effective, but all of the work that we're doing really is to accelerate the technology cost curves coming down at a state and national level. We see that year over year with the projections, along with the EV industry in terms of the economies of scale, that we're getting there. So I'm very optimistic that we're reaching a tipping point in the next couple of years.
Cover Image: The solar array on the rooftop of the Javits Center convention centre complex, paired with battery storage in what Salati describes as one of NYPA's 'marquee projects'. Image: NYPA Flickr account.