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APPA Supports EPA Finding Tied To Mercury and Air Toxic Standards

April 18, 2022

by Paul Ciampoli
APPA News Director
April 18, 2022

Citing the need for regulatory certainty, the American Public Power Association (APPA) is voicing support for the U.S. Environmental Protection Agency’s (EPA) finding in a proposed rule related to the agency’s Mercury and Air Toxic Standards (MATS) that it is “appropriate and necessary” under a section of the Clean Air Act to regulate hazardous air pollutant emissions from electric generating units.

APPA, which outlined its position in April 11 comments submitted to EPA, noted that its members continue to utilize coal-fired power subject to MATS.

“The Association and our members have and continue to be dedicated to clean air in our communities and protection of the environment. Our members have made significant investments to reduce air toxics and become compliant with MATS,” APPA said.

“Many members continue to pay for those investments through loan obligations.  For these reasons, APPA members have a significant stake in EPA’s Proposed Rule and the forthcoming residual risk and technology review (RTR) process,” it said.

Air emissions data from the utility sector show vast reductions in emissions and hazardous air pollutant emissions, APPA noted. “MATS compliance is a significant contributor to this result.  These reductions provide important context for EPA’s reconsideration in the proposed rule and for the forthcoming RTR.”

Finalized in 2012, the MATS rule, paired with other rulemakings at the time, caused significant reductions in mercury and other hazardous air pollutants in the electric utility sector, the trade group pointed out. EPA estimates coal- and oil-fired electric generating units have reduced total hazardous air pollutant emissions by 96 percent since 2010.

These achievements have not been without expense to generators and end users, APPA said. Owners and operators of coal- and oil-fired electric generating units have spent more than $18 billion to comply with MATS, while concurrently retiring and investing in replacement generation, such as natural gas, renewables, hydro, and nuclear. Utilities opted to either retire affected units, based on economics often dictated by unit capacity, or install the control technologies required by the rule.

“APPA emphasizes that retirements to comply with MATS are part of the unprecedented investment to air quality made by numerous cities and municipalities. A decision to retire a coal facility is not reversable given permit restrictions, physical decommissioning, and the economics of the power market. Contemporaneous with retirements, public power made substantial new investments to replace the coal-fired baseload generation with lower or non-emitting generation resources,” the trade group said in the comments.

Regulatory Certainty Is Essential

“Regulatory certainty is essential to municipalities and cities,” APPA went on to say. “At this juncture, the electric utility industry has fully implemented MATS. States have relied on MATS-related ancillary benefits in their state plans for other Clean Air Act programs.”

Sources have also relied on these same controls to comply with other Clean Air Act obligations, such as requirements for non-hazardous air pollutant MATS surrogate pollutants.

Now that these capital expenditures are complete, sources are realizing the value of their investments and anticipate doing so in the future, APPA said. Electric generating units “have relied on MATS rulemakings when making these substantial financial commitments. Single unit and single plant owners cannot pivot quickly to regulatory change. Generation shifting is not an option.”

APPA noted that cities and municipalities are committed to the transition to cleaner energy.  “Renewable energy projects require financial investment, asset procurement, and permitting.  Commissioning clean energy requires time and money. If public power utilities must contend with unanticipated new environmental projects for MATS, resources may need to be diverted away from renewable projects to address new MATS-related environmental projects.”

APPA continues “to emphasize that public power has fully implemented MATS and has relied on previous investments to reduce” hazardous air pollutants in planning for future energy transitions. “Regulatory certainty is critical to ensuring future plans can be sustained to transition to a cleaner energy future. For these reasons, we ask EPA to consider the challenges that a change in MATS would have on this cost-sensitive subset” of electric generating units.

EPA’s proposed rule recommends revoking a prior finding that it is not “appropriate and necessary” to regulate electric generating units under Clean Air Act Section 112. The proposed rule instead finds that it is “appropriate and necessary” under Section 112(n)(1)(A) of the Clean Air Act to regulate hazardous air pollutant emissions from electric generating units. The proposed rule uses a new methodology to support its proposed “appropriate and necessary finding” the new approach considers the advantages of regulation (public health, environmental effects) and disadvantages of the regulation (costs, impacts to the EGU sector, and society). EPA has also offered an alternative methodology which compares the monetized benefits and consequences of the rule.

APPA said that the public power community has expended substantial resources to comply with MATS. “Notably, our support does not extend to all aspects of EPA’s ‘appropriate and necessary’ methodology and analysis in the proposed rule. We note that the Section 112(n)(1)(A) analysis is a one-time event and has no application in other Clean Air Act contexts.  The proposed rule should have no precedential influence in other Clean Air Act regulatory frameworks.”

The BCA monetizes the benefits and consequences of the rule. The proposed rule, using the BCA approach, found that the benefits of MATS regulation far exceed costs, even without accounting for nonmonetized benefits of reduction.

The BCA approach is “a reliable, analytic approach to tally benefits and costs of regulating EGUs under Section 112,” APPA said. APPA said it supports EPA’s decision in the proposed rule, reiterating the need for regulatory certainty.

APPA, Other Groups Send Letter To EPA

Meanwhile, in an April 11 letter to EPA, APPA and other trade groups and unions said that restoring the appropriate and necessary determination responds to the Supreme Court’s decision in Michigan v. EPA that EPA must consider costs in evaluating whether it is “appropriate and necessary” to regulate “and enables electric companies to remain focused on getting the energy we provide as clean as we can as fast as we can, while maintaining the reliability and affordability that our customers value.” 

The groups also said that should EPA move forward with any reconsideration of the RTR, it should ensure that any new standards are consistent with the ongoing transition of the power sector and allow for companies to make holistic decisions as they deploy additional clean energy resources.

Along with APPA, the following groups signed on to the letter:

EPA Releases 29th Annual U.S. Greenhouse Gas Inventory

April 18, 2022

by Paul Ciampoli
APPA News Director
April 18, 2022

The U.S. Environmental Protection Agency (EPA) recently released its 29th annual inventory of U.S. greenhouse gas emissions and sinks, which offers a national level overview of annual greenhouse gas emissions from 1990 to 2020.

EPA reported that net U.S. greenhouse gas emissions were 5,222.4 million metric tons of carbon dioxide equivalent in 2020, a nearly 11% decrease in emissions from 2019.

The sharp decline in emissions from 2019 to 2020 is largely due to the impacts of the coronavirus pandemic on travel and economic activity. “However, the decline also reflects the combined impacts of several factors, including population trends, energy market trends, technological changes including energy efficiency improvements, and the carbon intensity of energy fuel choices,” EPA said. 

For the latest release, EPA said that it has made several important improvements. For example, EPA has added estimates for two important sources of methane: emissions from post-meter uses of natural gas, which includes leak emissions from residential and commercial appliances, industrial facilities and power plants, and natural gas fueled vehicles; and emissions from flooded lands such as hydroelectric and agricultural reservoirs.

Additionally, EPA worked with researchers to include estimates of methane emissions from large anomalous leak events, such as well blow-outs.  

The GHG inventory covers seven key greenhouse gases: carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride, and nitrogen trifluoride.

In addition to tracking U.S. greenhouse gas emissions, the inventory also calculates carbon dioxide that is removed from the atmosphere through the uptake of carbon in forests and other vegetation. 

The report has been compiled annually since 1993 and submitted to the United Nations Framework Convention on Climate Change (UNFCCC).

The report is prepared by EPA in collaboration with numerous experts from other federal agencies, state government authorities, research and academic institutions, and industry associations.

Click here for additional details about the inventory.

Agencies Warn Of Cyber Threats Against ICS/SCADA Devices

April 18, 2022

by Paul Ciampoli
APPA News Director
April 18, 2022

The Department of Energy, Cybersecurity and Infrastructure Security Agency, National Security Agency and Federal Bureau of Investigation are warning that certain advanced persistent threat actors have shown the capability to gain full system access to multiple industrial control system/supervisory control and data acquisition devices.

Those devices include Schneider Electric programmable logic controllers (PLCs), OMRON Sysmac NEX PLCs, and Open Platform Communications Unified Architecture (OPC UA) servers, the agencies said in an alert.

The actors have developed custom-made tools for targeting industrial control system/supervisory control and data acquisition devices. The tools enable them to scan for, compromise, and control affected devices once they have established initial access to the operational technology (OT) network.

Additionally, the actors can compromise Windows-based engineering workstations, which may be present in information technology (IT) or OT environments, using an exploit that compromises an ASRock motherboard driver with known vulnerabilities, the agencies said.

By compromising and maintaining full system access to industrial control system/supervisory control and data acquisition devices, these actors could elevate privileges, move laterally within an OT environment, and disrupt critical devices or functions.

The agencies urged critical infrastructure organizations, especially energy sector organizations, to implement the detection and mitigation recommendations provided in the alert to detect potential malicious advanced persistent threat activity and harden their industrial control system/supervisory control and data acquisition devices.

The alert is available here.

California’s Peninsula Clean Energy To Buy Energy From Geothermal Facility

April 15, 2022

by Paul Ciampoli
APPA News Director
April 15, 2022

Ormat Technologies has signed a 15-year power purchase agreement (PPA) with Peninsula Clean Energy, a California community choice aggregator, under which the CCA will purchase 26 megawatts (MW) of energy from Ormat’s Heber 2 geothermal facility located in Imperial Valley, Calif., effective January 1, 2023.

The PPA marks the successful completion of Ormat’s first ever solicitation for bids, with a request for bids (RFB) on the Heber 2 facility issued in July 2021.

The RFB was published immediately after the California Public Utilities Commission (CPUC) issued its Mid-Term Reliability decision, requiring the procurement of 1,000 MW of weather invariant, zero-emission, 80% capacity generation by all California load serving entities by 2026.

Power from the Heber 2 facility complies with related guidelines, making it the first geothermal PPA to meet the new CPUC requirements, Ormat said on April 14.

The American Public Power Association has initiated a new category of membership for community choice aggregation programs.

South Dakota Cities Find Success With Water Heater Programs

April 15, 2022

by Paul Ciampoli
APPA News Director
April 15, 2022

The cities of Volga and Howard, S.D., are finding success with water heater programs, with customers in both cities taking advantage of rebates on water heaters offered by Heartland Consumers Power District.

Volga and Howard offer Rheem Marathon water heaters for sale at the local utility.

Heartland began offering rebates to residential and commercial customers in 2015 for installing electric water heaters with a lifetime warranty. Marathon water heaters are the most popular brand fitting that description.

The program was developed because it was seen as a win-win: the customer had an efficient water heater with a lifetime warranty and the utility saw an increased electric load. They are also a great fit for a load management system.

Currently, Heartland offers a $200 rebate for the purchase of a water heater 50 to 79 gallons. For water heaters 80 gallons and larger, a $400 rebate is available.

Since Heartland began offering rebates on water heaters, customers in both Volga and Howard have qualified for a proportionately large number of rebates.

Heartland provided rebates for the installation of 291 water heaters from 2015 through 2021. Of those heaters installed, 89 were in Howard and 76 in Volga. The installations in those communities represent 56% of total installations, with 30% in Howard and 26% in Volga.

The city of Volga has been selling Marathon water heaters as far back as 2010.

The city offers both 50- and 85-gallon models, offering discounts to the customer on both. Fifty-gallon water heaters are offered at a price of $768.50, a discount of $368.50 from the city’s cost to purchase. With the $200 rebate from Heartland, the customer pays $568.50. The 85-gallon water heaters are sold for $1,165.50, which includes a discount of $365.50. After the rebate, the final cost to the customer is $765.50.

The city attributes the success of the program mostly to word-of-mouth. While the information is available on the city’s website, they don’t actively promote it.

To make it as convenient as possible, the city will deliver the water heater at no extra cost.

To get the discounted pricing, the customer must have the water heater hooked up to the city’s load management system. This helps keep the city’s peak demand down, which keeps the city’s costs down.

City Electric Superintendent Chad Collins says the program is worth continuing because minimal time is taken by city staff to run it. The city orders water heaters as needed, more when they know a new development is in the works. Because the tanks are so efficient, they don’t get complaints about them being controlled through load management.

Howard has also been selling Marathon water heaters for over ten years. The city originally started the program with the idea that it was a good customer service — since customers purchase both water and electricity from the city, efficient water heaters seemed like a good product to sell at a discount.

Like Volga, the city of Howard doesn’t advertise the Marathon program. Word-of-mouth is the main advertising tool. Local plumbers are aware of the program so when they get a call from someone needing a new water heater, they refer them to the city.

Including the rebates offered by Heartland, Howard sells the water heaters for about half price. A 50-gallon heater costs the purchaser $487.77 after rebate while an 85-gallon model costs $576.

In order to qualify for the discounted pricing, the water heater must be hooked up to the city’s load management system.

Public Power Utilities Eligible To Participate In DOE Clean Energy Innovator Fellowship

April 15, 2022

by Paul Ciampoli
APPA News Director
April 15, 2022

The Department of Energy (DOE) recently launched a Clean Energy Innovator Fellowship that recruits talent from diverse backgrounds to spend up to two years supporting the work of eligible host organizations, which include electric public utility commissions and public power utilities. The deadline for applying is May 6, 2022.

Innovator Fellows receive a stipend and an educational allowance to support host institution projects that will help decarbonize the power system, electrify transportation and industry, and make the U.S. power system more equitable and inclusive, DOE said.

“The goal of the program is to increase access to clean energy career opportunities across the country and accelerate the national transition to resilient and affordable clean energy,” the federal agency noted.

Host institutions and fellowship candidates must each apply separately to participate in the program. DOE will facilitate the process of matching host institutions and fellows.

Projects may address a wide range of topics, including, but not limited to, grid modernization, equitable and affordable access to clean energy and energy efficiency, integration of electric vehicles and building electrification, resilience planning, interconnection, and rate design.

Projects are defined up front, but they have the flexibility to evolve over the fellowship period, DOE said.

Additional details are available here.

Solar Energy Innovators Program

DOE launched the innovator fellowship due to the success of its Solar Energy Innovators Program (SEIP), which was launched in 2017.

SEIP supports qualified candidates at all career levels as they spend one to two years developing and executing research projects with host institutions pursuing solutions to solar energy deployment challenges. Many the program’s alumni have accepted permanent jobs at their host institutions, and others got permanent jobs doing similar work.

Dr. Paul Brooker was a professor at Central Florida University conducting research on fuel cells, electric vehicles, and solar energy when he applied to the SEIP fellowship.

Brooker spent his fellowship at the Orlando Utilities Commission (OUC), a public power utility, simulating the impact of a 108-megawatt solar project on OUC’s operations. He liked the work so much he changed his career. OUC hired Brooker for a full-time job as a supervisor of engineering and research in emerging technologies.  

Brooker’s fellowship mentor, Justin Kramer, a manager at OUC in emerging technologies, says, “Being a host organization was extremely convenient and valuable. This program really helps OUC bridge the gap between academia and industry. Our participation brought a new perspective to the team and innovative approaches as to how we pursue new technologies and engage with universities in a way that benefits both parties.”

San Francisco PUC Helps To Cut Emissions, Promote Equitable Access To Clean Energy

April 13, 2022

by Paul Ciampoli
APPA News Director
April 13, 2022

San Francisco Mayor London Breed on April 7 announced a series of new programs that her office said will reduce carbon emissions and promote equitable access to clean energy in San Francisco, two priorities highlighted in San Francisco’s recently updated climate action plan.

The initiatives, which are being managed by the San Francisco Public Utilities Commission (SFPUC), include discounts for 100% renewable energy for low-income customers, rebates to replace fossil fuel powered appliances, and incentives for installing electric vehicle (EV) charging infrastructure.

Together, the programs will help the city make further progress in reaching Breed’s climate action goals, including achieving net-zero emissions by 2040.

Last year, the mayor and the SFPUC announced that CleanPowerSF will provide all customers with 100% renewable electricity by 2025, five years ahead of the city’s goal of 2030 and twenty years ahead of the State’s goal of 2045. The SFPUC launched CleanPowerSF in 2016 with a mission to provide San Francisco residents and businesses with clean, renewable electricity at competitive rates.

Breed’s office noted that the SFPUC has launched a slate of new programs that support a faster transition to renewable energy and more equitable access for communities most impacted by climate change:

The San Francisco Public Utilities Commission currently operates two retail electricity services: Hetch Hetchy Power and CleanPowerSF. Together, these programs serve nearly 390,000 customer accounts in San Francisco and meet over 70 percent of the electrical demand in the City.

Hetch Hetchy Power is San Francisco’s publicly owned-utility, which provides 100 percent greenhouse gas-free energy to public facilities such as City Hall, schools and libraries, some private commercial developments, and affordable housing.

Utility In Reading, Mass., Expands Renewable Choice Program To C&I Customers

April 13, 2022

by Peter Maloney
APPA News
April 13, 2022

The Reading Municipal Light Department (RMLD) in Massachusetts recently expanded its Renewable Choice program to commercial and industrial customers.

RMLD launched the opt-in program in February, making it available to residential customers and allowing them to support additional renewable energy resources above and beyond the public power utility’s annual non-carbon energy targets.

Funds contributed to the Renewable Choice program are used to retire New England Power Pool (NEPOOL) Generation Information System (GIS) compliant renewable certificates, starting with Mass Class 1 certificates.

The certificate retirements under the Renewable Choice program are in addition to RMLD’s compliance retirements of 26 percent in 2022, which increase 3 percent each year so as to reach 100 percent, i.e., net zero by 2050.

Customers in the program, which now includes commercial and industrial customers, can choose to contribute at one of three levels to bring their monthly electricity usage to 50 percent, 75 percent, or 100 percent renewable/non-carbon. RMLD will base the Renewable Choice charge on the participating customer’s monthly kilowatt hour (kWh) usage, which will appear as a line item on the customer’s monthly electric bill.

The expansion of the Renewable Choice program will enable commercial and industrial customers to achieve sustainability goals that are often established in corporate mission statements and supply chain reporting, RMLD said.

Participation in the Renewable Choice program requires a one-year commitment and that a customer is current with their bill.

Additional information about the Renewable Choice program is available at https://www.rmld.com/home/pages/renewable-choice where customers also can find a calculator that allows them to input their monthly kWh usage to calculate their monthly

Renewable Choice charge for any of the three participation levels.

RMLD serves over 70,000 residents in the towns of Reading, North Reading, Wilmington, and Lynnfield Center and has over 30,000 meter connections in its service territory.

Report Offers Recommendations Tied To Grid Security Exercise

April 13, 2022

by Paul Ciampoli
APPA News Director
April 13, 2022

Continuing to enhance routine and emergency operations coordination between the electricity industry and natural gas providers and boosting operational coordination between the electricity industry and communications providers are recommendations flowing from a November 2021 grid security exercise that included a significant number of public power participants.

Over two days, more than 700 planners led their organizations’ efforts to exercise their response and recovery plans in the face of simulated, coordinated cyber and physical attacks on the North American bulk power system and other critical infrastructure during the exercise, GridEx VI.

Hosted every two years by the North American Electric Reliability Corporation’s Electric Information Sharing and Analysis Center (E-ISAC), GridEx is the largest grid security exercise in North America.

In 2021, GridEx participants expanded to include more representation from public power, co-op and municipal entities, Canadian partners and other critical infrastructure sectors, such as natural gas, original equipment manufacturers, financial services, and telecommunications, NERC said. Approximately 60 public power utilities participated.

The E-ISAC divided play into two portions. Distributed Play, held on November 16–17, 2021, provided the opportunity for operational participants across North America to exercise the resilience of the electricity system. The Executive Tabletop, held on November 18, 2021, convened industry executives and government leadership from the United States and Canada to explore the challenges presented by a severe cyber and physical attack against the grid.

On April 7, 2022, NERC released a lessons learned report related to GridEx VI.

Executive Tabletop Overview

The GridEx VI Executive Tabletop saw executives and leaders from 88 organizations, and almost 200 individuals in total, join the Tabletop.

Participants included senior representation from U.S. and Canadian government entities and executive leaders representing U.S. and Canadian cooperatives, investor- and publicly-owned utilities, and independent system operators.

The lessons learned report said that the E-ISAC took steps to diversify participation in GridEx VI to account for a wider range of perspectives when exploring the Tabletop scenario.

This resulted in greater participation from interdependent industries, such as natural gas and telecommunications, an active role for Canadian Government partners, and wider U.S. Government representation, including representatives from state government. The active participation of representatives from the Canadian government and interdependent industries in particular added significant value to the Tabletop as reflected in the report’s recommendations, the report noted.

Details on Tabletop Scenario

The Tabletop scenario prompted participants to assess the impact of serious cyber and physical security attacks and take the actions needed to respond; communicate effectively; restore power; and address serious public health, safety, and grid security challenges.

The Tabletop exercise was designed in four phases to simulate how industry and government would respond to a sophisticated, well-coordinated cyber and physical attack.

These phases were as follows:

Phase 1—The First Hour after the Attacks: Challenging operating conditions further degrade reliability when the Western Interconnection splits into two islands after a transmission disturbance initially assumed to be caused by wildfires.

Phase 2—The Next Morning: Attacks on electricity and natural gas infrastructure cause widespread power outages affecting many high-priority customers, including defense-critical facilities.

Phase 3—Later that Day: Telecommunications disruptions impair power system restoration activities and complicate coordination with government. Wind generation resources are disrupted by widespread control and response issues.

Two Weeks and Beyond: The Western Interconnection is restored and customer load is eventually reconnected, but energy and capacity margins are tight for the foreseeable future. Active cyberattacks have ceased.

During plenary and breakout sessions, facilitators led participants through discussions designed to simulate the communication and coordination that would occur during a real event.

Executive Tabletop Recommendations

Among the recommendations included in the lessons learned report related to the executive tabletop is that industry and government should continue to build effective communications procedures and systems to share operational information.

“The electricity industry has robust grid monitoring and control capabilities that have withstood the test of emergency situations over decades of operation. However, the Tabletop scenario presented conditions that severely strained the industry’s ability to communicate operational status to their many external stakeholders, including state/provincial and local government,” the report said. “In addition, the scenario’s involvement of a nation-state adversary added a layer of complexity regarding how and with whom to share highly sensitive information.”

The report also recommends that there be continued enhancements to routine and emergency operations coordination between the electricity industry and natural gas providers.

The scenario included disruptions of natural gas to generating stations, the report noted. “Compared with the previous Tabletop two years ago, the discussion benefitted from the more robust participation of natural gas operators, the Oil and Natural Gas Subsector Coordinating Council, and natural gas trade associations in the United States and Canada.”

Strengthening operational coordination between the electricity industry and communications providers is another recommendation.

“The critical interdependencies between the electricity and communications sectors are well-understood and have often been a prominent component of the GridEx series of exercises,” the report said. “This time, the Tabletop scenario featured a widespread loss of landline and cellular communications while electricity utilities were recovering from the cyber and physical attacks and restoring the grid. Participants agreed that the loss of communications would essentially halt the grid restoration process.”

Other recommendations related to the tabletop exercise are:

Distributed Play Scenario

The GridEx VI Distributed Play scenario saw a nation-state target the North American grid with cyber and physical attacks that spanned two days.

Incidents ranged from disinformation on social media to cyberattacks that targeted industrial control systems.

The E-ISAC divided the two-day exercise into four moves. The E-ISAC also developed “Move 0,” which included optional material in the week preceding the exercise to prepare players for the incidents that would follow.

The E-ISAC developed a series of physical, cyber, and operational injects in partnership with subject matter experts, expert planners, and partners from the SANS Institute, Idaho National Laboratory, and the National Renewable Energy Laboratory to ensure that the exercise reflected the complex threat the grid faces today, the report noted.

The E-ISAC developed a scenario and a Master Scenario Event List, but the planners were encouraged to customize the scenario to meet their needs. Consequently, the timing, content, and substance of exercise play varied between participating organizations.

The Distributed Play Scenario drove observations and recommendations, captured in the GridEx VI lessons learned report, identifying specific actions the E-ISAC could pursue to improve future GridEx exercises, including ways to increase participation and effectiveness of future GridEx exercises.

Report Says New York Is On Track To Meet Its Energy Storage Targets

April 13, 2022

by Peter Maloney
APPA News
April 13, 2022

New York is on track to reach the energy storage goals the state set in 2018, according to an updated report released by the Department of Public Service (DPS) .

DPS’ third annual State of Storage report recorded that energy storage projects totaling 1,230 megawatts (MW) were either awarded or contracted in 2021. That total equals about 82 percent of the state’s target of having 1,500 MW of energy storage installed by 2025 and 41 percent of the state’s target of having 3,000 MW of storage in place by 2030.

With over 12,000 MW of energy storage projects in New York utility interconnection queues and the New York Independent System Operator (NYISO) interconnection queue, the energy storage industry in the state is “robust,” the report said.

Common energy storage use-cases in New York include co-location with solar photovoltaic developments and other renewable energy resources.

Energy storage systems up to 5 MW are eligible for the state’s Value of Distributed Energy Resource (VDER) compensation, which is the most common compensation mechanism chosen by developers, the report said. Coupling energy storage with solar allows developers to maximize VDER compensation under many scenarios, according to the report.

The report noted, however, that not all projects in interconnection queues will come to fruition because of unfavorable project specific economics or other reasons. The report also noted that supply chain issues and increased competition for battery cells have resulted in price increases in 2021 that have persisted into 2022.

The average total installed costs for non-residential, retail projects that were awarded incentives averaged $567 per kWh for installations in 2022 and 2023, up from $464 per kWh for installations in 2020 and 2021, the report said. For projects above 5 MW that received an incentive and will provide wholesale market services, the total projected installed costs should average $370 per kWh for installations in 2020 and 2021, the report said.

The average total installed costs for behind-the-meter customer sited projects used for peak load reduction remain “relatively high” at $1,117 per kWh in 2021, up from $970 per kWh in 2020, the report said, adding that the cost increases were driven by supply chain issues and increased competition for battery cells.

However, the costs for large scale energy storage projects are expected to decrease into the $150 to $200 per kilowatt hour (kWh) range by 2030, the report said, citing recent industry analyst reports.

The New York Public Service Commission established the statewide energy storage goal of 3,000 MW by 2030 in December 2018 and subsequently adopted a suite of energy storage deployment policies and actions to achieve those goals.

In January 2022, Governor Kathy Hochul announced plans to double the state’s energy storage target to at least 6,000 MW by 2030.

The DPS and the New York State Energy Research and Development Authority (NYSERDA) are in the process of updating the state’s Energy Storage Roadmap to reflect the expanded goal. The roadmap would then go to the state’s Public Service Commission for further action.