New York agencies install energy storage system for peak shaving, power price arbitrage

The New York Power Authority is using a first-of-its-kind lithium-ion battery energy storage system to provide electricity peak shaving capabilities as part of a demonstration project that stores lower cost energy and delivers it during high demand periods when power prices are higher, Cadenza's CEO said in Feb. 17.

NYPA and the New York State Energy Research and Development Authority selected the high-safety, lithium-ion "superCell technology" developed by Cadenza Innovation partially due to the system's safety measures that prevent fires, said Christina Lampe-Onnerud, also Cadenza's founder said in video interview.

The 50-kW/250-kWh system went through NYSERDA's study phase and it was determined that the safety issue was important, Lampe-Onnerud said. Specifically, the system is designed to prevent the spreading of a "thermal runaway event," which results from internal short circuits that could lead to a fire.

Committed to eliminating the "potential risk of thermal propagation" which can lead to fires and explosions, Cadenza's US Department of Defense-tested supercell has a patented design that helps to "bolster utility grid resilience and power a range of uses in the commercial and industrial market and other key sectors," according to a Feb. 16 statement issued by the state agencies and the company.

"Notably, by packaging components to lower costs and increase safety, the supercell is designed to reduce the need for additional, high-cost fire safety protection and mitigation systems – resulting in improved energy density and supporting the advancement of the Li-ion battery industry," the statement said.

The energy storage system has been deployed immediately adjacent to NYPA's White Plains, New York, offices and the goal is for the installation to serve as a model for integrating "low-cost, safe, high-performance renewable energy resources into the grid," especially in urban areas, that can be replicated at other businesses throughout New York State and beyond, according to the statement.

The technology was designed by Connecticut-based Cadenza Innovation in collaboration with Hitachi Energy.

Peak shaving capability

The project is expected to demonstrate its peak power demand shaving function that reduces the peak electricity load of a typical commercial building.

"The unit is reducing peak loads at the Power Authority's main offices, smoothing electricity network operations and showing a safety advantage by demonstrating a reduction in the potential of thermal runaway," Justin Driscoll, NYPA's acting president and CEO, said in the statement.

"Our goal is to demonstrate whether this unit will provide energy storage and power quality services on a scale that can meet commercial, industrial and network demands at buildings that are similar to ours," Driscoll said.

Peak shaving reduces a building's maximum power demand thus reducing the associated utility peak demand charge. This can result in cost reductions for site owners, primarily by arbitrage, which involves storing lower cost energy absorbed at time periods of lower power demand and delivering that energy at time periods of higher cost due to higher power demand, the statement said.

The pilot project will also help advance New York State's climate and clean energy goals, including Governor Kathy Hochul's plans for the State to achieve 6 GW of energy storage capacity by 2030.

The state's Climate Leadership and Community Protection Act mandates 70% renewable energy by 2030 and 100% zero-emission electricity by 2040, with Governor Hochul recently proposing an expansion of New York's energy storage programs to double the goal to 6 GW by 2030, which represents at least 20% of the state's peak electricity load, according to the statement.

The New York Independent System Operator forecasts that total energy storage nameplate capacity will surpass 6 GW in 2032.

Cadenza's Lampe-Onnerud said the company is in discussions to set up US manufacturing operations. Asked how the recent lithium price increase has impacted the company's plans, Lampe-Onnerud said she has been in the battery industry for 20 years and commodity price fluctuations are "nothing new."

Lithium carbonate CIF North Asia prices assessed by S&P Global Commodity Insights were trading at $69,800/mt Feb. 16, down from a high of just over $78,000/mt in November 2022. Lithium prices had not traded above $40,000/mt until January 2022.