NYPA Utility-Scale Battery Energy Storage Project is Now Operating
August 27, 2023
by Paul Ciampoli
APPA News Director
August 27, 2023
New York Gov. Kathy Hochul on Aug. 25 announced that New York’s first state-owned utility-scale battery energy storage project is now operating in Franklin County, N.Y. The 20-megawatt facility was installed and is operated by the New York Power Authority.
The facility will connect into the state’s electric grid, helping to relieve transmission congestion “and pave the way for the utility industry and the private sector to better understand how to integrate more clean energy into the power system, especially during times of peak demand,” NYPA said.
The Northern New York Energy Storage Project also will help accelerate the state’s aggressive target to install 6,000 MW of energy storage by 2030, NYPA said.
The project, located in Chateaugay, about 40 miles northwest of Plattsburgh, is the Power Authority’s first utility-scale battery project and the first one built by New York State.
The facility, maintained and operated by NYPA’s St. Lawrence-Franklin D. Roosevelt Power Project, consists of five 53-foot walk-in enclosures, each with more than 19,500 batteries grouped in modules and stacked in racks. Each container pulls in and can disperse 4 MW of power.
The Northern New York Energy Storage Project is strategically located in a region that generates more than 80 percent of its electricity supply from renewable resources, including the St. Lawrence-Franklin D. Roosevelt Power Project, which generates more than 800 MW of hydropower, and more than 650 MW of wind generation.
“This is a first-of-its-kind project for the Power Authority and with it we are breaking new ground as we actively help lead New York State’s decarbonization efforts,” said NYPA President and CEO Justin Driscoll.
“By demonstrating large-scale battery development and operation, we are showing our ability to execute forward-thinking strategies and new technologies. The Northern New York Energy Storage Project will help New York achieve its aggressive climate goals and ensure that 70 percent of the state’s electricity supply comes from renewables by 2030.This project is a reliability and resiliency energy storage trendsetter that will be a model for others to follow,” he said.
The system also includes inverters, transformers, a control house, and back-up generator, all connected to the Willis substation, located north of the project.
The project, which provides 20 MW of power utilizing a lithium-ion battery system, was constructed by O’Connell Electric Company, Inc., of Victor, N.Y.
NYPA’s engineers were involved with the planning, development and permitting of the project and the project team met with local fire departments for training on the battery storage technology used at the facility.
NYPA’s engineers have ensured that the Northern New York Energy Storage Project met all fire safety and permitting requirements, it said.
NYPA is also testing other types of battery technology, such as advanced lithium-ion and zinc-air technologies, that demonstrate a reduction in the potential for thermal runaway, the most common cause of energy storage fires.
DOE Awards Companies Funds for Long-Duration Storage Projects in Vermont and Kansas
August 9, 2023
by Paul Ciampoli
APPA News Director
August 9, 2023
The U.S. Department of Energy’s Office of Electricity has selected two companies to receive $19 million in awards to demonstrate long-duration energy storage projects in remote communities and military housing.
The companies will receive funding to show how energy storage can lower electricity bills and increase power reliability in Vermont and Kansas.
This marks the first projects to be funded under the new energy storage demonstration programs enacted as part of the 2020 Energy Act.
The two companies receiving funding are NOMAD Transportable Power Systems and Corvias Military Living.
NOMAD Transportable Power Systems will receive $9.5 million which it will combine with its 50 percent cost share to lead a team to bring LDES to five communities in rural Vermont that have historically faced unreliable electric service during severe weather events, DOE said. The mobile energy storage systems will also serve as a new tool for emergency response across the region.
Corvias Military Living will receive $9.5 million which it will combine with its more than 50 percent cost share to demonstrate one of the first electric vehicle-inclusive microgrids at Fort Riley in Kansas, which will increase the energy resiliency, sustainability, and independence of military housing and other critical facilities.
Corvias will partner with General Motors Defense and other GM businesses to support the continued marketing and development of GM technologies for key markets in the U.S.
New York Governor Forms Working Group to Examine Energy Storage System Safety
August 4, 2023
by Paul Ciampoli
APPA News Director
August 4, 2023
New York Gov. Kathy Hochul on July 28 announced the creation of a new Inter-Agency Fire Safety Working Group to ensure the safety and security of energy storage systems across the state, following fire incidents at facilities in the state this summer.
State agencies will begin immediate inspections of energy storage sites, and the Working Group will help prevent fires and ensure emergency responders have the necessary training and information to prepare and deploy resources in the event of a fire.
Saying that fires at energy storage facilities are exceedingly rare, Hochul’s office noted that she has directed the Division of Homeland Security and Emergency Services Office of Fire Prevention and Control, New York State Energy Research and Development Authority, New York State Department of Environmental Conservation, Department of Public Service and the Department of State to lead the Working Group. The Working Group will examine energy storage facility fires and safety standards.
The Working Group will investigate the recent energy storage fires in New York and will conduct a comprehensive fire safety review, including emergency response analysis, of energy storage projects that experienced thermal runaway events across New York. Findings will include a list of recommendations for stationary energy storage equipment and installations.
The Working Group will review energy storage system operations and operators as they examine the condition of their batteries to verify operation within design parameters, remedy any deficiencies identified, verify operation of on-site fire suppression and confirm fire suppression plans with local fire departments, among other best practices.
The findings and resulting recommendations will also be shared with the New York City Fire Department, National Fire Protection Association, International Code Council, the New York State Fire Prevention and Building Code Council, and Underwriters Laboratories, which offers testing and certification services related to energy storage systems.
Fitch Outlines Threat of Battery Storage System Degradation
July 20, 2023
by Paul Ciampoli
APPA News Director
July 20, 2023
Battery energy storage systems, especially those used for arbitrage, could face faster degradation and higher capital expenditures volatility than renewables and thermal peaking plants, according to Fitch Ratings.
In a July 13 article on Fitch Wire, the ratings agency said, “we may raise our metrics thresholds” for battery energy storage systems to reflect risks related to volatility of arbitrage margins, use profiles and capex.
Battery energy storage systems can combine revenue streams from arbitrage, capacity and ancillary services under merchant schemes, long-term offtake agreements and regulated frameworks, Fitch said, noting that arbitrage strategies, such as buying energy when prices are low and selling it when they are high, are riskier and require active management, implying “margin volatility and less visibility over when and how much the asset will be charged and discharged.”
Batteries are subject to fast degradation with the useful life of utility-scale lithium-ion versions far below the estimate for solar panels, Fitch explained.
It said that degradation rates and life expectancy of battery storage mainly depend on how a system is used, especially with respect to frequency, depth of discharge and mode of operation, as well as battery chemistries and external conditions, such as temperature. In addition, in order to mitigate potential under performance, batteries require more frequent replacement than other energy technologies, Fitch said.
The ratings agency noted that battery degradation is affected by use. So, batteries that provide ancillary services for short-duration grid frequency regulation may face a different degradation rate than those that provide capacity for longer periods. And battery systems that have a high reliance on arbitrage revenue could also face even higher levels of degradation because optimal charging and discharging intervals often do not coincide with optimal arbitrage opportunities.
Overall, therefore, battery energy storage systems are exposed to higher levels of capital expenditure volatility compared with renewables or thermal peaking plants, Fitch concluded.
In terms of operational risks, battery systems, like renewable generators, can achieve high availability levels because they are relatively simple to operate. Thermal plants also can achieve high availability levels, but they are more complex to operate, Fitch said.
In terms of revenue risk, however, conventional thermal generators operate on a price-taker model when they sell in the spot market because they dispatch if prices exceed their variable cost of electricity generation, Fitch said. Renewable generators are less sensitive to market prices because they sell power when wind or solar resources are available and have low or no marginal costs.
Battery system operators, however, face a more difficult challenge because they need to consider both merchant sale and purchase prices in order to optimize margins, according to Fitch.
California Now has More than 5,000 MW of Battery Storage Capacity Online
July 12, 2023
by Paul Ciampoli
APPA News Director
July 12, 2023
The California Independent System Operator recently reported that more than 5,000 megawatts of battery storage capacity is now online and fully integrated into the electrical grid.
As of July 1, total battery storage on the grid had increased to 5,600 MW. Just three years ago, “we had about 500 MW on the grid and this rapid growth of energy storage in California has significantly improved our ability to manage through challenging grid conditions,” said Elliot Mainzer, the ISO’s president and CEO.
Since the summer of 2020, the ISO has seen a ten-fold increase in storage on the grid. The major driver behind the influx has been a series of storage procurement orders authorized by the California Public Utilities Commission requiring regulated utilities to add storage to their portfolios, CAISO said. These orders also call for significantly more storage in the coming years.
The CPUC’s plans call for a buildout of more than 10,000 MW in aggregate storage capacity on the grid by 2026.
In coming years, the ISO is expecting to see the emergence of new storage technologies as well as longer-duration storage resources that will be able to provide additional value to the grid.
Company Developing Storage Project to Monitor Export Flows in Northern Vermont
July 11, 2023
by Peter Maloney
APPA News
July 11, 2023
EVLO Energy Storage Inc., a subsidiary of Hydro-Quebec, is developing a utility-scale battery energy storage project in Troy, Vermont.
EVLO said the 3-megawatt, 12-megawatt hour storage project will store energy during strong energy production times for later use during times of peak energy demand, thus helping to smooth out the intermittency of renewable power generation and delivering value to utility customers.
The project will also provide data to the U.S. Department of Energy and Sandia National Laboratories to support analysis of how batteries can help the export of energy from the region. The project includes a $2 million cost-share partnership through Sandia’s Energy Storage Demonstration Projects program.
Troy is in the Sheffield-Highgate Export Interface area of Vermont’s electric grid in the northern tier of the state. Generation resources inside the interface are limited in real time to ensure that system capacity is not exceeded in the event of a potential future transmission outage.
From time to time, generation resources in the northern tier are required to curtail output due to the lack of capacity to export power, according to the Vermont System Planning Committee website, which also noted that utilities, clean energy advocates, regulators and other stakeholders are discussing ways that the limitations in the region can be addressed to reduce or eliminate curtailments.
The energy storage project, which is scheduled to be commissioned by the end of 2023, will consist of EVLO 1000 units, the company’s power converter system platforms and EVLOGIX energy management system. EVLO said it would monitor and maintain the system for 20 years.
Energy Storage Market Sees Decline in Installations
June 15, 2023
by Paul Ciampoli
APPA News Director
June 15, 2023
Across all segments of the industry, the U.S. energy storage market added 2,145 megawatt hours in the first quarter of 2023, a 26% decrease from the fourth quarter of 2022, according to a new report released June 14.
The grid-scale segment installed 1,553 MWh in Q1 2023, recording the second-straight quarterly decline and falling 33% below first quarter 2022 installations, according to the report released by the American Clean Power Association and Wood Mackenzie.
California and Texas continue to drive the market, accounting for 84% of Q1 activity, but project delays contributed to the declining environment, according to the latest U.S. Energy Storage Monitor report.”
Wood Mackenzie has forecasted 2023 additions from the grid-scale project pipeline at 8.9 GW and 10.5 GW across all segments. While the forecasted capacity for 2023 decreased slightly quarter-over-quarter, total additions for all segments are still expected to double by end-of-year 2023 from 2022.
“We are seeing the effects of supply chain issues and interconnection queue backlogs hinder market growth,” said Vanessa Witte, senior analyst with Wood Mackenzie’s energy storage team. “This is the first consecutive quarterly decline we have seen in the energy storage market since 2015 when installations were much smaller in volume and more unpredictable. While the market has faced challenges, we do anticipate a stronger second quarter, as many project CODs have been pushed, but are still very viable.”
Community, commercial, and industrial installations bounced back in Q1 after four consecutive quarters of lower-than-average activity. In total, the CCI market installed 203.3 MWh for its second-highest quarter on record and 145% above year-over-year numbers.
Residential storage recorded its second-highest quarter on record at 388.2 MWh but there was a decline from Q4 2022 installed capacity. This marked the first QoQ decline for the residential sector in nearly two years.
“Our outlook for the storage sector is still bullish, with projected growth strong through 2027. Near-term we will see some challenges, but we expect them to be corrected and activity to increase as more renewable generation will drive the need for storage,” said Witte.
Researchers Envision Making Backup Energy Storage Available by Rail
June 13, 2023
by Peter Maloney
APPA News
June 13, 2023
A new paper from researchers at Lawrence Berkeley National Laboratory details how railways could provide an energy storage network that offers a flexible option for backup power for the grid.
In the paper, Leveraging rail-based mobile energy storage to increase grid reliability in the face of climate uncertainty, published in Nature Energy, the researchers compared the cost of deploying batteries on rail cars for low-frequency events, such as weather related power outages, with the investment costs of stationary energy storage and transmission lines.
The study looked at historical freight rail flows, costs, and scheduling constraints to see whether railroads could be summoned to transport batteries for high-impact events, given that grid operators typically have at least a few days’ notice, and sometimes up to a week, when extreme weather is coming. The paper’s authors found that mobile energy storage could travel between major power markets along existing rail lines within a week without disrupting freight schedules.
In cases where the trains need to cover distances of about 250 miles or less, rail-based energy storage could make more sense from a cost perspective than building stationary battery banks to fill supply gaps that happen during less than 1 percent of the year’s total hours, the researchers found. At that range, transmission lines are more cost effective than rail lines, if the batteries are used more frequently, the researchers added.
When distances grow to more than 930 miles, rail transport of energy storage becomes cheaper than transmission lines for low-frequency events, the paper found. Bringing energy storage to weather-affected areas by rail could save the power sector upwards of 60 percent of the total cost of a new transmission line or 30 percent of the total cost of stationary battery storage, the authors concluded.
While both new transmission lines and banks of batteries to store energy will be needed to meet demand and provide backup power for a grid that is increasing powered by intermittent renewable resources, “we wanted to explore additional, complementary technologies,” Natalie Popovich, a Berkeley Lab research scientist and co-author of the study, said in a statement. “We have trains that can carry a gigawatt-hour of battery storage, but no one has thought in a cohesive way about how we can couple this resource with the electric grid.”
The paper cited New York State with its robust freight capacity and current transmission constraints between upstate clean energy generation and downstate load centers, as an example of where rail-based mobile energy storage could work well. In other cases, the authors said, it may make sense for multiple states to share the additional capacity from a rail-based battery bank.
“This is not necessarily a resource that needs to be in one region,” Jill Moraski, a graduate student at the University of California Berkeley, researcher at Berkeley Lab, and the paper’s lead author, said in a statement. “It can operate similar to an insurance policy, where you spread the coverage across risks for a wide geographic region.”
The authors acknowledged that regulatory and infrastructure hurdles exist. For instance, there are not adequate interconnections to take power off a train and plug it into the grid, nor are there approval processes, pricing regimes nor regulatory frameworks in place.
They also acknowledged that extending energy storage across the rail network is not a replacement for expansion of the existing transmission infrastructure, but it could be an important complement.
“Our paper gives a top-level overview of how rail-based mobile energy storage could benefit today’s grid, in today’s climate,” Moraski said.
Treasury, IRS Release Additional Details on Applying for Energy Credit Program
June 5, 2023
by Paul Ciampoli
APPA News Director
June 5, 2023
The U.S. Department of the Treasury and the Internal Revenue Service on May 31 released guidance that provides additional information about the application process and technical guidance for the expanded Qualifying Advanced Energy Project Credit program under the Internal Revenue Code.
Treasury and IRS established the expanded program under section 48C of the Internal Revenue Code on February 13, 2023.
The guidance is available on the IRS website.
The Qualifying Advanced Energy Project Credit renews and expands a tax credit created in 2009 through the American Recovery and Reinvestment Act.
It provides incentives for clean energy manufacturing and recycling, industrial decarbonization, and critical materials processing, refining, and recycling.
A broad variety of projects are eligible to apply for an investment tax credit of up to 30 percent, ranging from manufacturing of fuel cells and components for geothermal electricity and hydropower, to producing carbon capture equipment or installing it at an industrial facility, to critical minerals processing.
The Inflation Reduction Act provided $10 billion in new funding for the Qualifying Advanced Energy Project Credit program. Congress required that at least $4 billion be reserved for projects in communities with closed coal mines or retired coal-fired power plants. The initial funding round will include $4 billion, with about $1.6 billion reserved for projects in these designated coal communities.
To apply, taxpayers will submit concept papers describing the proposed project. Taxpayers whose concept papers receive a favorable review will be encouraged to submit a full application.
Concept paper submissions will be accepted starting June 30, 2023, and the deadline for concept papers will be July 31, 2023. Starting on May 31, taxpayers can access information and materials for preparing their concept papers.
More information for potential applicants, including a 48C mapping tool and an upcoming informational webinar, is available on the Department of Energy’s 48C webpage.
Treasury and IRS also released a Notice of Proposed Rulemaking for the Low-Income Communities Bonus Credit program under Section 48(e) of the Internal Revenue Code, which was established earlier this year.
The NPRM proposes rules for the application process and technical guidance for this program, which provides up to a 20-percentage point boost to the Investment Tax Credit for up to 1.8 gigawatts annually of solar and wind energy projects (with maximum output of less than 5 megawatts) located in low-income communities or otherwise serving low-income populations.
The NPRM reflects recommendations from a broad array of industry and environmental justice stakeholders to evaluate applications on an expedited basis and provide applicants clarity as quickly as possible.
Treasury and IRS intend to release final guidance related to the 2023 program prior to applications opening later this year.
Report Identifies Bottlenecks That Keep Energy Storage Projects From Being Built
May 23, 2023
by Peter Maloney
APPA News
May 23, 2023
Most energy storage projects are not built because of interconnection bottlenecks, according to a new report.
The report, The Interconnection Bottleneck Why Most Energy Storage Projects Never Get Built, was prepared by the Applied Economics Clinic on behalf of Clean Energy Group and found that local interconnection processes have not kept up with rising interest in and incentives for energy storage resources.
“Nationally, almost all of the projects waiting in interconnection queues are for solar, wind and storage projects,” Todd Olinsky-Paul of Clean Energy Group, said in a statement. “The wait to interconnect is so long that many projects drop out and never end up being built. Those that don’t drop out due to long wait times can face enormous costs for distribution grid upgrades, which makes projects uneconomic. This poses a barrier to energy storage deployment and hinders the ability of states to meet clean energy and decarbonization goals.”
The report synthesized information gathered in 11 interviews with stakeholders in interconnection policy debates conducted by the Applied Economics Clinic between August 2022 and January 2023.
The report used Massachusetts as a case study because the state provided an instructive example because of its advanced energy storage targets and incentive programs, advanced decarbonization and clean energy goals, and the steps the state has begun to take to address interconnection issues.
Interconnection barriers have already had negative impacts in Massachusetts, the report’s authors said, noting that, at the end of 2022, the state’s interconnection queue had 2,321 megawatts of proposed solar capacity, 429 MW of standalone storage capacity, and 868 MW of hybrid capacity. In comparison, the state had 1,195 MW of existing solar capacity in 2021 and 181 MW of storage capacity.
The report said interconnection problems are not unique to a single state or region and noted that at the national level a recent Lawrence Berkeley National Laboratory study found 1.9 million MW of solar, storage, and wind resources waiting in transmission interconnection queues. So, while the Applied Economics Clinic-Clean Energy Group report focused on Massachusetts, the report’s authors said the lessons learned are broadly applicable.
The report’s authors recommended that stakeholders, such as independent system operators, regional transmission operators, and the Federal Energy Regulatory Commission:
- create interconnection processes that take a systemic view of applications rather than examining interconnection applications and grid upgrades in isolation;
- continuously iterate interconnection processes to build in regular improvements, examine effectiveness, and coordinate stakeholders to tackle ad hoc coordination;
- integrate solutions on multiple fronts simultaneously, and
- spread distribution system upgrade costs over a broader set of stakeholders than just the projects applying for interconnection.
Overall, the report’s recommendations aim to tackle the core problems of interconnection, such as bottlenecks arising from deciding who should pay for system upgrades, not making system upgrades proactively, and not considering storage or related control technologies adequately. “It is likely that a combination of solutions is needed, as smaller process-related changes will not overcome the main interconnection barriers on their own,” the report’s authors said.