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$350 Million Incentives To Boost Energy Storage In New York
- Jul 05, 2018 -


Recently, New York released a roadmap for energy storage, which plans to store capacity of 1500 megawatts by 2025. The roadmap uses policy incentives, wholesale markets, price signal adjustments and other tools, so it is known as a Swiss Army knife omnipotent approach.


The road map issued by New York governor Andrew Cuomo is the latest play to reform its energy vision, which is an overall strategy to speed up the use of distributed energy in New York.


Energy storage technology is more and more described as a "Swiss Army Knife" technology, because it can provide many different uses, from the provision of a live standby power to an expensive grid upgrade. The roadmap uses these capabilities to increase energy storage devices in three areas: large power market, distribution system and customer site.


The state is implementing the microgrid through the NY award scheme, and it will take a place in the energy storage roadmap. The plan is to develop microgrids, electric vehicles, solar power and energy storage to provide 500 megawatts of energy storage capacity for customers.


An incentive of $350 million


To achieve its goal, the state wants to help the market reduce the cost of energy storage. The plan aims to achieve this goal by offering $350 million to developers, which will come from existing sources of income, such as the clean energy fund. The details have not yet been determined, but if its incentives are approved by the state regulatory agency, it will become a way to help reduce the cost of energy storage. The roadmap envisages a reduction in the cost of 1500 megawatts of energy storage capacity by US $200 million. According to its energy storage roadmap, this incentive also helps to reduce the cost of software in the retail / wholesale power system by $50 / kWh, and the cost of commercial sites is reduced by $150 / kWh.


The document says that in addition to incentives, energy storage projects in the expensive electricity market in New York are already or will soon be feasible. This is especially true for solar and energy storage projects or for commercial installations or distribution systems.


"By the beginning of 1920s, a large number of use cases were expected to be economically viable, reducing the soft costs (i.e., non hardware costs) in the early installation costs, and increasing the number of developers working in the state." The road map points out.


Since 2010, the installed energy storage cost in the US has decreased by an average of 10%-15% per year. According to this roadmap, the cost of lithium ion battery is the largest, while the price of other energy storage technologies is also decreasing.

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The role of a utility company


New York utilities will purchase and develop energy storage projects. In order to get support from public utilities, the plan will create incentives for utilities through the new income adjustment mechanism acquired by the energy storage and distribution system.


The plan also supports alternative alternatives to encourage the deployment of more energy storage projects. The alternative to non cable is to replace distributed energy sources built by traditional infrastructure, such as power plants and transmission lines.


Extension of non cable alternatives to wholesale markets


New York will expand its cable replacement options based on the road map to encourage its use in the wholesale market. According to the road map, this will get greater value from energy storage and reduce the power cost of the whole system.


"This expanded alternative way of cable replacement is to build value sharing among taxpayers, developers and utility companies in the future." The content of the roadmap is pointed out.


In order to encourage the use of energy storage in the wholesale market, the road map presents an incentive measure, which may take the form of fixed capacity payment. This payment can be used for energy storage up to 100 megawatts, which aims to create revenue sources for energy storage projects and make them more attractive to financial investors.


The roadmap also attempts to help build non cable alternatives by asking public utilities to open some important project information, such as the value of their unused land near a potential non cable replacement site.


The report also calls for:


Increasing customer delivery rates and plans (such as utilities dynamic load management) to send more accurate price signals.


Increase energy storage incentives for the existing New York solar program to speed up the development of solar energy and energy storage projects and allow them to obtain a federal tax credit before maturity.


• monitoring public utilities rates, utilities solicitation and carbon values to reflect the system benefits and value of energy storage projects.


The next step of the energy storage Roadmap

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The roadmap is developed by the New York public service department (DPS) and the New York energy research and development administration. The proposals in the roadmap need to be approved by the State Public Service Commission, a regulatory body in New York. As the next step, the state will seek comments on the plan.


Combined with the road map, New York green bank has issued an information request to developers to provide information about the energy storage financing gap. As it plans to invest at least $200 million in energy storage related projects, New York green bank plans to issue a proposal later this year, and its clean energy solicit proposal (RFP) will focus on solar and energy storage projects.