Dive Brief:

The New York Public Service Commission (PSC) on Thursday approved two initiatives aimed at combating climate change: an ambitious energy storage target and the acceleration of progress toward meeting the state's energy efficiency goals.

The PSC set an energy storage goal of 3,000 MW by 2030 with an interim goal of 1,500 MW by 2025, as well as a new energy efficiency target for the state's investor-owned utilities that aims to more than double utility energy efficiency reductions by 2025.

The PSC's decision makes New York the fourth state to adopt an energy storage target, although New York's is the most ambitious so far.

Dive Insight:

There was a great deal of debate running up to the release of New York's energy storage target on the PSC decision. When New York Democratic Gov. Andrew Cuomo announced New York's energy storage Roadmap this summer he called for a 1,500 MW by 2025 target, but several analysts said the target could be twice as high.

The PSC ended up going with the higher number.

By comparison, California has a 1,300 MW by 2020 target. Massachusetts regulators are considering a policy that would raise the state's existing 200 MWh storage target to 2,000 MW by 2025. And New Jersey recently adopted a 2,000 MW by 2030 energy storage target.

The PSC's decision was based on analysis done by Acelerex. When the consulting firm modeled an aggressive timeline for retiring all pre-1990 combustion turbine peaking units in New York City and Long Island by 2025, resulting in 3,600 MW of energy storage being deployed in the state by 2030.

But in its decision, the PSC said while energy storage can play a "critical role" in providing peaking services, "it is not practical to suggest that storage may be the only solution in reducing the need for peaking generating units." Consequently, the PSC set its target below the 3,600 MW mark.

The commission said it is "timely and necessary" to adopt an energy storage goal of 1,500 MW by 2025 and an "aspirational deployment goal" of 3,000 MW by 2030.

And, to speed deployment, the commission ordered the state's six investor owned utilities (IOUs) to directly procure energy storage resources on the state's bulk power system via competitive solicitation and have the facilities in service by Dec. 31, 2022.

The order calls for Consolidated Edison to procure 300 MW of energy storage and the other IOUs to procure at least 10 MW each.

Con Ed was singled out to carry the biggest portion of the procurements because analysis showed that the biggest opportunities were in the utility's territory, according to an energy storage expert who is not authorized to make public statements.

The PSC order also addressed the issue of timing. In the discussions leading up to the PSC's order there was an emphasis on creating a value stack of multiple revenue streams as quickly as possible to garner the greatest benefits possible for energy storage projects. A key part of that equation is being able to sell services from distribution connected energy storage facilities into the wholesale power market run by the New York Independent System Operator (NYISO).

However, in its filing to comply with Federal Energy Regulatory Commission (FERC) Order 841, which seeks to create a level playing field for energy storage, NYISO does not accommodate dual participation. NYISO also requested an extension from FERC on the implementation of its new rules for energy storage in the wholesale market to May 2020.

"That clearly creates a time gap issue" for developers eager to begin work on their energy storage projects, Mike Alter, a senior associate on ICF International's DER team, told Utility Dive.

Another provision in the PSC's order should help developers bridge that gap. The commission order authorized a $310 million market acceleration bridge incentive to be administered by the New York State Energy Research and Development Authority (NYSERDA).

The sum represents the lion's share of $350 million Cuomo earmarked to speed energy storage deployments this summer. Cuomo made the other $40 million available to support solar-plus-storage projects in October. The state seems to be using the bridge funds to close any market gaps, Matt Robison, a principal with ICF's DER team, told Utility Dive.

On energy efficiency, Cuomo in April directed the state's Department of Public Service and NYSERDA to raise the state's efficiency targets. The agencies set 2025 target of 185 trillion British thermal units (Btu) of reductions by 2025.

The PSC's order approved the 185 trillion Btu target and adopted an incremental target of 31 trillion Btu of reductions by the state's utilities toward the achievement of that goal. The PSC also adopted a subsidiary target of an annual reduction of 3% in electricity sales by 2025, as well as a subsidiary target of at least 5 trillion Btu in reductions through the deployment of heat pumps.

The PSC said those targets would "put New York on a path to achieve the 185 TBtu goal as well the overall state goal of 40% statewide reduction of greenhouse gas (GHG) emissions from 1990 levels by 2030."