Consolidated Edison Company (ConEd) and Orange and Rockland utilities (O&R) have issued a joint Request for Proposals (RFP) for bulk energy storage and dispatch rights in New York, US.
ConEd, the largest investor-owned-utility (IOU) in New York, provides electricity services to around 3.6 million customers. O&R, a subsidiary of ConEd since 1999, provides electricity services to approximately 309,000 customers across New York and New Jersey. The companies issued the RFP 16 December.
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The New York State Public Service Commission (NYPSC) directed New York state utilities to procure 350MW of energy storage projects.
According to NYPSC’s orders, detailed in Case 18-E-0130, In the Matter of Energy Storage Deployment Program, ConEd will have a 300MW procurement goal, and the other five IOUs will have 10MW procurement goals.
Projects procured in the RFP may have a maximum term of 15 years and must be operational by 31 December 2030.
In June 2024, New York governor Kathy Hochul approved the Energy Storage Roadmap 2.0, which includes a statewide goal of deploying 6GW of energy storage on the NYISO grid by 2030. Despite this significant goal, the development of large-scale energy storage projects has been slow in the state.
The state is looking to replace peaker plants, which emit a disproportionate amount of emissions compared to their operating time. Due to peakers being predominantly sited in densely packed urban areas of New York City, these also most negatively impact disadvantaged communities and communities of colour.
Part of the state’s plan for bulk storage procurement is using the ‘Index Storage Credit’, where the state underwrites some of the merchant risk for developers, but when revenues exceed the strike price, profits will be paid back.
Embracing the Index Storage Credit and utilities issuing RFPs could be a sign that energy storage projects will increase in the state. In a 2023 article for our quarterly journal PV Tech Power (Vol.34), Jeff Bishop, CEO of energy storage developer-owner Key Capture Energy said:
“We really think that after this (the Index Storage Credit) goes through all of the regulatory processes, and once they (utilities) start issuing requests for proposals (RFPs), that this will be a way that we’re going to be seeing storage really taking off in New York State by 2025.”
Key Capture Energy did finalise contract negotiations for two large-scale battery energy storage system (BESS) projects with Long Island Power Authority (LIPA) 18 December, part of a 2021 RFP by electricity transmission and distribution (T&D) operator PSEG Long Island on behalf of LIPA, which owns the T&D systems on Long Island.
It is worth noting, however, that the projects were among five selected from the RFP for contract negotiations, but two of the five were terminated a year later. Developers cited that they could not hold firm to the pricing set out by their bids.
New York’s strict fire codes also present barriers to BESS deployment. The RFP from ConEd and O&R specifies that proposals for indoor batteries in New York City will not be considered based on current fire safety regulations and the risk of the batteries not receiving the necessary permits for operation.
On 26 July 2024, A draft of proposed changes to the New York Fire Code was published, increasing safety and standardisation of BESS installations in the state.
In late November 2024, IPP Eolian pulled plans for a 100MW/400MWh standalone BESS in Catskill, New York (Premium access article). Based on Energy-Storage.news analysis of the minutes of planning meetings, the potential of BESS fires was a main concern for the Catskill Planning Board and locals.
The instructions and documents from ConEd and O&R for prospective bidders can be found here (ConED official website).
