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New York files $350M incentive plan for energy storage systems

New York filed its energy storage implementation plan to help achieve two-thirds of Gov. Andrew Cuomo's interim target of deploying 1,500 MW of such resources by 2025. The Cuomo administration has the ultimate goal of having 3,000 MW of energy storage resources in operation by 2030.

In a March 11 filing with the state Public Service Commission, the New York State Energy Research and Development Authority, or NYSERDA, proposed to spend about $350 million from 2019 through 2025 on incentivizing the deployment of battery storage across the state and another about $44 million to help administer and facilitate the program. The proposal responds to a December 2018 order by the PSC that set the storage targets and authorized the incentives, in accordance with a 2017 law.

Of NYSERDA's proposed funding, the state agency wants to budget $130 million as incentives for retail use, including $40 million in previously authorized state Clean Energy Funds for storage projects paired with solar photovoltaic systems. Another $150 million of the proposed funds would go toward bulk incentives, while $70 million would be allocated to "opportunities that have the greatest potential to build a self-sustaining storage market." Excluded from the program's budget are about $43 million of emissions cap-and-trade funds from the multistate Regional Greenhouse Gas Initiative that are slated to be used as bulk and retail incentives for Long Island.

As for payment rates, the NYSERDA plan offers incentives at a fixed amount per kilowatt-hour of usable storage capacity. However, the incentives are subject to future changes. The incentives also are applicable to all investor-owned utility service territories within New York except for bulk-scale storage within Consolidated Edison Inc.'s service area, including subsidiary Consolidated Edison Co. of New York Inc., as the company has its own separate bulk incentive program.

Under the plan, stand-alone or solar-paired storage projects up to 5 MW in size can receive commercial retail incentives beginning at $350/kWh. Those incentives are reduced to as low as $200/kWh once three funding "blocks" are depleted on a first-come, first-served basis.

For bulk-scale projects up to 20 MW in total size, the storage plan proposes incentive levels of $110/kWh starting in 2019 that are gradually reduced by $10/kWh each year until reaching $50/kWh in 2025. For projects larger than 20 MW, the plan would offer $85/kWh and then $75/kWh under two different New York ISO "class year" periods, estimated to begin in 2019 and in the 2021-2022 time frame, respectively.

NYSERDA also announced in a March 13 news release a new "Battery Energy Storage System Guidebook" to assist local permitting authorities and the energy storage industry with the siting and review processes for battery energy storage projects.

Those developments coincided with a March 13 announcement by ConEdison's Orange and Rockland Utilities Inc. that the southeastern New York utility selected Key Capture Energy to plan, design, install and operate its new battery storage project in Pomona, Rockland County. Key Capture Energy is an Albany-based, independent developer of utility-scale battery storage projects.

The Pomona battery storage facility is part of Orange and Rockland's Pomona nonwires alternative project designed to help maintain reliable service for customers, enhance "smarter" energy management and reduce greenhouse gas emissions from power plants. According to the utility, the battery storage project will allow the utility to delay building costly new infrastructure aimed at accommodating peak energy demand that occurs only a few times a year.