New York energy storage incentive details: $280 million available *today*

New York State has launched bulk and retail energy storage subsidies to support the first 1 GWh of the state's 1.5 GWh target. The bulk incentive starts at $110/kWh, while retail starts in Block 1 at $350/kWh.

April 26, 2019 John Fitzgerald Weaver

Image: D Ramey Logan,
Liberty Island photo from Wikimedia Commons. License: Creative Commons Attribution 4.0

First, first you get the money. Then, you get the power. And then you get the energy storage.

The New York State Energy Research & Development Agency (NYSERDA) and the New York State Department of Public Service (DPS) have put forth $280 million worth of incentives for energy storage in two programs: one for “retail” systems smaller than 5 MW, and a Bulk Storage program for larger systems.

$130 million is available in the Retail Storage program (Details – pdf). The program pays $350/kWh (see below) for the first 100 MWh, with Block 2 incentivizing 185 MWh in Upstate and 215 MWh in New York City, for a total of 500 MWh.

Currently, the live dashboard reveals that $1.5 million has been committed to slightly less than 4.3 MWh of storage (if a four hour battery).

The incentive amount ($) will be calculated via the following formula:

$ = Average discharge (kW) x (Hours 1-4) x Incentive ($/kWh) + 0.5 x (Average discharge (kW) x (Hours 5-6) x (Incentive $/kWh))

Systems are paid 50% of the incentive for hours 5 and 6, and there is no incentive for any duration beyond 6 hours. The maximum duration that will be covered under the incentives is 15 MWh.

Systems must be grid connected, maintain a minimum 70% round-trip efficiency during the system life, and carry at least a 10-year manufacturer’s warranty. These batteries may provide backup power or power quality services, but must be operated primarily for electric load management or shifting electric generation to more beneficial time periods while operating in parallel with the utility grid.

Related to the Retail Program is the Solar Plus Energy Storage program that pays $350/kWh for energy storage.

The Bulk Storage program is divided into system size ranges greater than and less than 20 MW (below image) that are scheduled to receive $150 million. The program manual can be found here.

For these transmission-connected projects, there is no maximum size, however total incentives will cap at $25 million, and only one project will be awarded per meter. Those providing capacity to the wholesale market will receive the full incentive, and those providing only energy arbitrage or ancillary services will receive 75% of the incentive.

Projects must be in “Stage 9” in the New York Independent System Operator (NYISO) interconnection queue or later, or have begun the equivalent distribution utility study if connecting directly into the distribution grid.

Additionally, projects larger than 20 MW will be given a longer development period.

The incentive amount will be paid in four equal payments over three years: Payment 1 upon the project being dispatched by the NYISO into the wholesale day-ahead, real-time, or ancillary services markets, with the next three payments coming every 12 months.

There is an incentive claw back provision if projects don’t last 20 years.

Con Edison territory projects must apply under Con Edison’s Bulk Storage Dispatch Rights RFP which is expected to be released in July 2019.

The state hopes to deploy 1.5 GWh of energy storage by 2025, with one scenario from the state’s Energy Storage Roadmap shown below:

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