Report Says New York Is On Track To Meet Its Energy Storage Targets

April 13, 2022

by Peter Maloney
APPA News
April 13, 2022

New York is on track to reach the energy storage goals the state set in 2018, according to an updated report released by the Department of Public Service (DPS) .

DPS’ third annual State of Storage report recorded that energy storage projects totaling 1,230 megawatts (MW) were either awarded or contracted in 2021. That total equals about 82 percent of the state’s target of having 1,500 MW of energy storage installed by 2025 and 41 percent of the state’s target of having 3,000 MW of storage in place by 2030.

With over 12,000 MW of energy storage projects in New York utility interconnection queues and the New York Independent System Operator (NYISO) interconnection queue, the energy storage industry in the state is “robust,” the report said.

Common energy storage use-cases in New York include co-location with solar photovoltaic developments and other renewable energy resources.

Energy storage systems up to 5 MW are eligible for the state’s Value of Distributed Energy Resource (VDER) compensation, which is the most common compensation mechanism chosen by developers, the report said. Coupling energy storage with solar allows developers to maximize VDER compensation under many scenarios, according to the report.

The report noted, however, that not all projects in interconnection queues will come to fruition because of unfavorable project specific economics or other reasons. The report also noted that supply chain issues and increased competition for battery cells have resulted in price increases in 2021 that have persisted into 2022.

The average total installed costs for non-residential, retail projects that were awarded incentives averaged $567 per kWh for installations in 2022 and 2023, up from $464 per kWh for installations in 2020 and 2021, the report said. For projects above 5 MW that received an incentive and will provide wholesale market services, the total projected installed costs should average $370 per kWh for installations in 2020 and 2021, the report said.

The average total installed costs for behind-the-meter customer sited projects used for peak load reduction remain “relatively high” at $1,117 per kWh in 2021, up from $970 per kWh in 2020, the report said, adding that the cost increases were driven by supply chain issues and increased competition for battery cells.

However, the costs for large scale energy storage projects are expected to decrease into the $150 to $200 per kilowatt hour (kWh) range by 2030, the report said, citing recent industry analyst reports.

The New York Public Service Commission established the statewide energy storage goal of 3,000 MW by 2030 in December 2018 and subsequently adopted a suite of energy storage deployment policies and actions to achieve those goals.

In January 2022, Governor Kathy Hochul announced plans to double the state’s energy storage target to at least 6,000 MW by 2030.

The DPS and the New York State Energy Research and Development Authority (NYSERDA) are in the process of updating the state’s Energy Storage Roadmap to reflect the expanded goal. The roadmap would then go to the state’s Public Service Commission for further action.

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