We submitted comments to the New York Public Service Commission regarding New York’s 6 GW Energy Storage Roadmap: Policy Options for Continued Growth in Energy Storage, a document that was jointly submitted by New York Energy Research and Development Authority and Department of Public Service Staff in December 2022. The December 2022 document analyzes the need to increase New York’s storage target to 6 GW and the barriers to storage deployment, and provides policy recommendations to help the state achieve 6GW of storage deployment by 2030.
Our comments offer the following observations and recommendations:
- For any bulk system program where energy storage owners are compensated for the gap between strike prices and reference prices, ensure that reference prices fully reflect the market-based payments for value that energy storage projects are expected to provide.
- A program providing for out-of-market payments presents some risk of distorting wholesale market operation, including risks arising from the market power of some market participants, and the ultimate program design should avoid unnecessary market distortion.
- It is important to recognize and monitor real performance characteristics of energy storage, including round-trip efficiency, the extent to which resources are actually operational and available to perform, and degradation.
- The environmental and public health values arising from pollution avoidance enabled by resources that avoid the deployment of emitting generation depend crucially on the location of those resources, and can be very large. Ideally the value of pollution avoidance would be recognized by requiring polluters to fully internalize the costs they impose, or as a second-best option by compensating emissions reductions direction. In the absence of more optimal mechanisms, we acknowledge that targeting procurement to the area of the grid where peaker plants are most concentrated is justified, but highlight other opportunities for pollution avoidance enabled by storage, notably where it enables electrification of highly-polluting activities.
- We emphasize the importance of underlying rate design for providing efficient price signals for behind-the meter resources.