One of the Reforming Energy Vision’s primary goals includes renewable sources generating 70% of the state’s electricity by 2030. To do that, the New York grid seeks to implement distributed energy resources into its fuel mix.
How might New York’s energy market be redesigned to incorporate DERs like solar, energy storage, and others?
NYISO’s proposed changes meet opposition
In 2018, the NYISO proposed changes to the ICAP Capacity Market for how long a resource must be able to run to be eligible to be paid the full value of capacity.
Using the results of a study on energy-limited resources by GE Consulting (GE), the NYISO initially proposed that resources would need to be able to run for 8-hours in order to obtain full capacity value. The NYSIO then proposed it would allow resources that can perform for shorter durations to be paid a fractional portion of the capacity value as follows:
6-hrs = 75%
4-hrs = 50%,
A group of demand response and energy storage providers, including CPower, challenged the GE study’s findings.
A formal review of the GE study by Astrapé Consulting revealed “several flaws in the assumptions and methodology that influenced the study results to show a decreased capacity value for shorter-duration resources than would likely be expected.”
Skepticism of the GE study’s results quickly spread among key New York energy stakeholders, including DR providers, energy storage developers, C&I customers, environmental groups and various trade associations.
These stakeholders submitted a joint letter to the NYISO executive team and board of directors requesting “all market design changes relating to the GE Study results (including any changes to the SCR program) be removed from the DER Roadmap.”
So where does that leave New York?
Potential changes in the New York Energy Market
While there is an ongoing debate about the future of New York’s capacity market, there are no major regulations or market design changes yet announced to take effect in 2019. That could change pending the outcome of an April vote (more than a month away as of this writing) among New York’s energy stakeholders.
That means, for example, the Special Case Resource (SCR) demand response program will continue to operate under its current parameters, including a four-hour duration requirement.
As far as the DER wholesale market goes, New York is in wait-and-see mode. DERs, especially battery storage, and renewable energy sources are a key component of the REV’s drive toward New York’s energy future.
New York, like several other US energy markets, is faced with the question of how to value distributed energy resources in its marketplace.
The question of DER valuation is being debated by the NYISO and various energy stakeholders in the state. As of this writing, there is no definitive timetable for when the debate will conclude and regulations for DER valuation will be enacted.
New York has taken its place alongside California, New Jersey, and Massachusetts as a first-mover in establishing energy storage targets.
In June 2018, Governor Cuomo announced an energy storage roadmap that set New York’s storage target for 1,500 MW by 2025. According to the roadmap, that ambitious goal could elevate to 3,000 MW by 2030.
At the state level, New York has recognized the need to fund storage projects instead of subsidizing them. Last June, Governor Cuomo committed $200 million from the New York Green Bank to fund storage investments that will help integrate renewable energy onto New York’s grid.
Funding opportunities for storage abound with plenty of state money being made available for storage development.
But without certainty on the wholesale market side and established rules concerning dual participation between markets, meeting the state’s ambitious storage goals will continue to have its challenges.
The key energy players in New York will need to resolve these issues before any substantial investment from the private sector will take a position on energy storage. The NYISO is targeting April 17, 2019, for a vote on market design to accommodate DER integration into its wholesale markets.
This post was excerpted from the 2019 State of Demand-Side Energy Management in North America, a market-by-market analysis of the issues and trends the experts at CPower feel organizations like yours need to know to make better decisions about your energy use and spend.
CPower has taken the pain out of painstaking detail, leaving a comprehensive but easy-to-understand bed of insights and ideas to help you make sense of demand-side energy’s quickly-evolving landscape.