ALBANY, N.Y. — The promise of doing well for both the environment and the economy (and the obstacles to that goal) were highlighted as the 2024 edition of New York’s energy storage industry conference opened. 

Manufacturers, developers, regulators and researchers — each looking for ways to overcome the challenges and be part of the solution — offered updates on their progress at Capture the Energy 2024. 

William Acker, executive director of the New York Battery and Energy Storage Technology Consortium (NY-BEST), highlighted these parallel goals as he welcomed attendees to the conference on May 15. 

“We will be focusing a lot of discussion in this conference around how we’re going to meet New York state’s climate and energy goals that are among the most aggressive in the country and really are an opportunity to redefine things and to really get a much better future for all of us,” he said. 

In most decarbonization scenarios, storage is more than an opportunity; it is an imperative. 

The transition from baseload fossil generation to intermittent zero-emission renewables is predicated on there being a way to store energy in periods of excess generation for use in periods of insufficient generation. 

Building enough of that storage to accomplish that depends on technological, financial, regulatory and societal factors that are mostly still evolving. 

The New York State Energy Research and Development Authority is working on multiple fronts to firm up some of those factors and streamline buildout of energy storage in the state.  

State Efforts

In her keynote address, NYSERDA President Doreen Harris announced the latest step in this effort: the launch of the much awaited Block 5 of the retail energy storage incentive. The $58.5 million funding package is expected to incentivize construction of 135 to 150 MW of energy storage in New York City. 

“Fundamentally, when we think about this funding, it’s intended to deploy what are the most mature projects across our state in the place that it is probably needed the most, to reduce peak flows, to mitigate the need for additional distribution grid upgrades and [to] displace some of the dirtiest fossil fuel peaker plants in the region,” Harris said. 

New York’s official goal is 3 GW of storage installed by 2030, but Gov. Kathy Hochul has directed that it be doubled to 6 GW. A proposed road map that would formalize that target and lay out a path to reach it has been in an extended period of review by the Public Service Commission. 

“I have to tell you, we are eagerly, like you, awaiting a decision on that road map,” Harris said. “But fundamentally, that is our next step that will allow us to partner with the industry to really scale up that next wave of projects and to deploy at a much greater scale toward the 6 GW goal.” 

Beyond this, NYSERDA is helping fund research and development and supporting market reforms. 

Word of the Day

Adam Cohen, chief technology officer and co-founder of NineDot Energy, focused his keynote on the need for market reforms to make storage work financially. 

It now operates under a haphazard system that he described as “make it fit where it can, how it can.” The term for this is “kludge,” he said, and he proceeded to describe a situation just as clunky as that word sounds. 

Utility rates for the past century have been based on the axiom that generation must be designed to meet maximum anticipated need because energy cannot be stored, he said. As a result, the characteristics and benefits of energy storage are fundamentally mismatched to existing tariffs. 

“It should not be a kludge anymore when we have gigawatts of these things on the grid [and] terawatt-hours of energy going to be consumed and spit back out in bursts when it’s most needed,” Cohen said.  

“You should charge the battery in an optimal way, and you should export the battery and apply grid services in an optimal way, and not have to build this duct-taped version of a tariff.” 

NineDot and other retail developers in New York have collaborated to produce a series of bidirectional service classification principles they would like to see: The tariff should be market-based and transparent; be universal, so it provides certainty; optimize imports and exports; provide localized adders; be adaptable to the changing grid; share savings with low-income customers; and use rates that computers can read. 

Headwinds, Tailwinds

Vanessa Witte, senior research analyst on Wood Mackenzie’s storage team, said the data and analytics provider has a bullish outlook on standalone storage, primarily because of the federal investment tax credit, but also all the wind and solar generation being planned: Their volatility creates a need for storage. 

However, WoodMac also sees short-term hurdles in the renewable energy sector, such as permitting and interconnection delays, local opposition, interest rates and inflation. 

“Really, we just need to accept the reality that total capex is high; interest rates are not expected to go down this year,” Witte said. “Despite some drops in supply cost and also lithium raw material costs, total capex does remain high.” 

The data show multiple problems in New York, and as it stands now, she projects the state will not reach 6 GW of storage by 2030. 

Fossil generation retirements are on track to far outstrip storage additions, Witte added: “Currently, what I’m showing right here is actually 2.8 GW of utility-scale [storage] by 2028. And then 4.5 GW of retirements.” 

But the equation changes after 2030. Construction of wind and solar has fallen well behind schedule in New York — far enough perhaps that its 70%-by-2030 target is now out of reach — but extensive buildout still is expected. And storage must follow. 

“Storage is very sensitive to state mandates, especially when paired with a financial incentive, other policies, other regulation [and] market signals; this is due to it being still very new,” Witte said. “So, New York also has a large amount of renewables coming online, not in the near future necessarily, more into the latter half of this decade, post of 2030. But it will create some clear market mechanisms by creating volatility on the grid.” 

There’s one other factor at play in New York: It’s New York. 

“New York is known to be one of the most difficult regions to build in. A number of developers actually don’t want to get involved in New York. There’s just too many permitting issues, the NIMBYism, the interconnection timeline, but also the interconnection costs,” Witte said. “The question is, what is the return for all of the difficulty and additional time to develop? Some areas do have higher volatility and better returns, but many areas don’t.” 

She added: “Sometimes working with utilities has also proven to be really challenging. Some are not accepting the PPA cost. Others maybe want to move into ownership and don’t want to contract for PPA any more at all.” 

Evolving Technology

Energy storage technology and applications are still evolving, especially the long-duration energy storage that will be critical if state policymakers do succeed in weaning New York off fossil fuels. 

One after another, speakers discussed the need to advance not only the development of technology, but also high-quality execution of it. 

Around the time of last year’s conference, New York City was reeling from a wave of hundreds of fires sparked by poorly made or incorrectly used lithium batteries for E-bikes and E-scooters. Soon after the 2023 conference, three unrelated fires hit New York grid-scale battery energy storage facilities in remote corners of the state, each one more serious and more widely publicized. 

The sequence of events galvanized local opposition to battery storage well beyond mere NIMBYism. (See Battery Storage Developers Bump Against Perception of Risk.) 

Harris said NYSERDA is part of the multiagency task force assembled to design safety standards and prevent further erosion of public trust in battery storage. Its work continues. (See NY Fire Code Updates Recommended for BESS Facilities.) 

Meanwhile, recent industry reports have faulted battery manufacturers’ quality control. (See Insurer: Majority of BESS Failures are in First Two Years and Engineering Firm Finds Quality Problems in BESS Manufacturing.)

M. Stanley Whittingham, who was awarded the 2019 Nobel Prize in Chemistry for his work on lithium-ion batteries, raised the same issue.

“These fires we had last year … it’s sloppy manufacturing, cheap manufacturing — things go wrong,” he said. “Same as what we have in New York City with E-bikes. These are cheap batteries, all from a certain country.” 

Whittingham, who is NY-BEST’s vice chair of research and a distinguished professor at Binghamton University, reminded the audience that all major commercial innovations in batteries came from the U.S. or U.K. 

The U.S. can take the initiative back, he said.  

“We don’t want to chase the Asians. That’s not going to work. We want to leapfrog them. So, we’re going to come up with more sustainable technology.” 

The economics must get better too, Whittingham said. 

“It takes 40 to 80 kWh to make a 1-kWh battery, so we have to change that.” 

Brian Gemmell, COO of National Grid’s New York electric utility, said the state has only about 400 MW of utility-scale storage built toward its 6,000-MW goal at a critical time in the energy transition. He explained the need to sharply accelerate the buildout and why speed cannot be the overriding concern. 

“We recognize that product development has slowed in the past year. The state has taken a crucial review of fire safety standards after the thermal runaways in 2023,” Gemmell said in his keynote address. 

“So, we’re particularly focused on ensuring this standard is successfully implemented with the engagement of communities including fire first responders. I want to emphasize that safety and reliability must serve as the foundation of energy storage deployment going forward.” 

Erik Spoerke, energy storage materials lead at Sandia National Laboratories, drew back to the longer view to give a better sense of where all these incremental setbacks and advances are leading. 

He’s leaving Sandia after 20 years to take an advisory role in the U.S. Department of Energy’s Office of Electricity. 

“I’m trying to help them understand how we can make grid-scale long-duration storage viable,” he said in his keynote speech.

He gets asked why he’s making such a large transition, taking a policy position after decades of hands-on work in the lab. 

“Really, an important part of the motivation here is to recognize that in the next 10 years, we’re expecting there to be more change to the grid infrastructure than in the last century. That’s a pretty good jump. … And there’s been a few times in history we can think about where there’s been that kind of colossal technical endeavor.”