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New York governor Hochul welcomes 20MW state-owned battery storage asset

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New York’s governor Kathy Hochul has welcomed the start of commercial operations at a 20MW battery energy storage system (BESS), the US state’s first project of its type in public ownership.

“Deploying energy storage technologies make our power supply more reliable and resilient, further enabling New York to build a robust clean energy grid,” Hochul said on Friday.

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The 20MW, 1-hour duration (20MWh) BESS asset is located in the tiny town of Chateaugay, which has a population of around 2,000 in Franklin County. It’s near the US border with Canada to the far north of New York State.

Owned and developed by the New York Power Authority (NYPA), a public benefit utility corporation, the system will participate in wholesale markets and provide ancillary services to the New York grid, helping it to integrate and utilise local renewable energy sources.

Northern New York Energy Storage Project, as it has been named, is being considered a pathfinder or demonstration project to show how battery storage can help integrate renewable energy in the state and is being maintained and operated by St. Lawrence-Franklin D. Roosevelt Power Project, which is one of NYPA’s hydroelectric plants.

“By demonstrating large-scale battery development and operation, we are showing our ability to execute forward-thinking strategies and new technologies,” NYPA president and CEO Justin E Driscoll said.

As regular readers of Energy-Storage.news will know, New York has one of the most aggressive energy storage deployment targets around. It was set in 2019 as part of the state’s Climate Leadership and Community Protection Act, which aimed for 70% renewable energy on the grid by 2030, and an 85% reduction in greenhouse gas (GHG) emissions by 2050.

Within that, former governor Andrew Cuomo had put in place a 3GW by 2030 target for energy storage, which was then upped by successor Hochul to 6GW.

Each of New York’s utilities were given individual targets to reach, and NYPA as a publicly owned entity responsibility to lead the way, as we heard from then-CCO at NYPA, Sarah Orban Salati, in a 2021 interview with this site.

NYPA is gunning for supplying emissions-free electricity by 2035. The utility has a bit of a head start, due to its portfolio of hydroelectric plants which comprise roughly three-quarters of its fleet, and the utility supplies about a quarter of New York State’s power overall.

Northern New York Energy Storage Project, the first BESS asset in its ownership, “is a reliability and resiliency energy storage trendsetter that will be a model for others to follow,” CEO Driscoll said, with the regions around it also home to growing wind power generation capacity.

A local EPC firm, O’Connell Electric Company, carried out construction of the lithium-ion BESS and other equipment and associated infrastructure such as inverters, transformers and backup generator.

BESS equipment supplier was not disclosed in New York State or NYPA announcements, although photographs show the logos of NEC Energy Solutions, the now defunct energy storage arm of the Japanese electronics company which has since been acquired by South Korea’s LG.

Challenges ahead for New York BESS projects

NYPA began work on the project in 2020 and at that time it had an estimated total cost of US$29.8 million, of which the utility’s board of trustees approved US$23.8 million financing in 2020, following an earlier approval for the other US$6 million in 2018. While publicly owned, NYPA’s revenues come from its electricity sales.

A big piece of the decarbonisation puzzle for New York is how to get fairly abundant renewable energy resources generating in the less populated Upstate areas of the state into the crowded urban demand centres, the biggest being New York City.

That, and challenges of physically siting large-scale BESS within the cities of New York has led to the handful of grid-scale projects already online or in construction being put in Upstate areas, beginning with developer Key Capture Energy’s KCE NY1 project in 2020.

By the end of 2021, while more than a gigawatt of energy storage contracts with utilities had been signed in the state, only around 116MW was actually in operation.

Earlier this year, Key Capture Energy CEO Jeff Bishop was among interviewees in an article for our quarterly journal, PV Tech Power (Vol.34). Bishop noted that one of the main challenges was that the value proposition of energy storage on the New York grid wasn’t as strong as in Texas for example, where the electric grid has a lot more volatility that BESS can help manage, often quite lucratively.

Efforts are ongoing to help developers find what Bishop described as the “missing money”, with the New York Energy Research and Development Agency (NYSERDA) currently working on its proposals to launch tenders for large-scale BESS during 2024.

Bishop – and other interviewees for the article – were confident that New York can and will get to that energy storage target and perhaps exceed it. However, Kelly Sarber, a self-style “prolific developer” with Strategic Management group and Vanessa Witte, market analyst with Wood Mackenzie, expressed concerns that the state might struggle to meet it on time.

While NYPA can take a leadership role, the state’s investor-owned utilities (IOUs) such as Con Edison have taken much longer to get on board with fulfilling their quotas, leading the state to hand them an extension on their first tranches of project contracts.

Fire safety working group

Another challenge currently facing the sector is the topic of fire safety. Urban New York was already plagued with recent concerns over faulty or misused e-bikes and scooters catching fire in apartment blocks. Unrelated to that, the NYC fire department had also put in place restrictions on lithium batteries in urban areas.

While safety features for large-scale BESS are known to be sophisticated and layered, and developers have a vested interest in not seeing their assets go up in flames, a spate of three fires at BESS installations from May to August this year has stoked those concerns.

Governor Hochul recently convened a fire safety working group across multiple agencies and authorities of the state, vowing to ensure all systems are designed, installed and operated safely – including ordering immediate inspections of all existing installations.

This could represent another challenge for New York in getting to its storage goals, with local media carrying multiple recent reports of towns and counties considering banning or putting a pause on developments.  

Our publisher Solar Media is hosting the 10th Solar and Storage Finance USA conference, 7-8 November 2023 at the New Yorker Hotel, New York. Topics ranging from the Inflation Reduction Act to optimising asset revenues, the financing landscape in 2023 and much more will be discussed. See the official site for more details.

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