NY Green Bank is working to fill financing gaps for solar-plus-storage projects as it backs off opportunities for solar-only investments, Managing Director Jason Moore said Thursday.
“There’s a whole lot of liquidity in the market for solar right now,” Moore said during a New York State Energy Research and Development Authority webinar on energy storage investments. In the solar sector, he said, yields are down for large portfolios; there are a lot of investors, and portfolio financings often are oversubscribed.
“We love that the market has fully embraced solar, particularly distributed solar in New York. [It] has been a long process to get lenders comfortable there,” he said.
NY Green Bank, a division of NYSERDA, focuses its investments on market gaps for technologies, and right now, it sees a need to support solar-plus-storage projects, Moore said.
“Solar projects may or may not be a fit for us anymore, however solar-plus-storage is in our wheelhouse right now,” he said. “That’s where we can be a bridging capital in the market to prove out the investment strategy, prove out the regulatory framework and prove out the ultimate success of the market.”
The Green Bank is also focusing on addressing disadvantaged communities and environmental justice issues.
“Projects that support communities that are historically underrepresented in the clean-energy economy are extremely important to NY Green Bank,” Moore said.
Storage Forecast
The outlook for energy storage opportunities in New York is bright, Schuyler Matteson, senior project manager for energy storage at NYSERDA, said during the webinar.
Growth in energy storage is being driven by planned offshore wind development, expansion of onshore renewables, stronger carbon reduction regulations and increased electrification, Matteson said.
New York has planned 9 GW of OSW projects that will be delivering energy to Long Island or New York City, and energy storage can “play a big role” in integrating and firming that energy, Matteson said.
In addition, he said there is a “huge opportunity” for energy storage from the state’s emissions reductions targets. Storage could replace about 3 GW of peaking power plants that NYSERDA expects will shutter in southern New York State, Matteson said.
Storage can also provide utilities flexibility as loads increase from electric vehicles and heat pumps. “Storage is one of the best resources you could ever imagine to deal with those new load patterns,” he said.
Studies by NYSERDA and NYISO show that the state’s goal to decarbonize its electric system through 2040 will require 10 to 15 GW of energy storage under a least-cost scenario.
“That’s something we’re taking very seriously as we evaluate where the market is today, where it’s going and what that means for the duration of storage,” Matteson said.
Program Funding
NYSERDA’s energy storage program has been popular over the last two years, but Matteson said opportunities for participation are still available.
The agency is working to meet the Climate Leadership and Community Protection Act’s 3,000-MW energy storage target for 2030. In 2019, the agency budgeted $400 million in grants for its energy storage program, with portions going to bulk projects (5 MW or larger offering wholesale market services), retail projects (under 5 MW) and projects sited on Long Island. NYSERDA has awarded funding for 1,200 MW of energy storage projects to date.
“About $41 million remains unallocated as we design and assess new programs and try to figure out what’s working, what might need to be changed and where that money can make the most impact as we move forward,” Matteson said.
Funding for the agency’s bulk storage program is fully allocated, but Matteson said that developers still have other funding options. Two solicitations are coming this year: one from NYSERDA for large-scale solar paired with storage and another from New York’s utilities for operation and dispatch rights to bulk storage systems. Dates for those solicitations have not been set.