Hunting the ‘missing money’ in New York’s energy storage market - Pro Bid Energy (2023)

Hunting the ‘missing money’ in New York’s energy storage market - Pro Bid Energy (1)

It’s often considered among the leading US states for energy storage, but to date this reputation New York enjoys has been based more on ambition and favourable policy direction than action. Andy Colthorpe hears why this is expected to change in the next couple of years.

This is an extract of a feature which appeared inVol.34 of PV Tech Power, Solar Media’s quarterly technical journal for the downstream solar industry. Every edition includes ‘Storage & Smart Power,’ a dedicated section contributed by the team at

New York, New York,” goes a popular song from 1978: “so good they named it twice”. Energy storage industry observers may have been reminded of those words in early 2021 when New York governor Kathy
Hochul doubled the state’s energy storage target from 3GW to 6GW, to be achieved by 2030.

That upping of the target set under Hochul’s predecessor Andrew Cuomo is in line with the New York Climate Leadership and Community Protection Act (CLCPA) and its goals, which include achieving a carbon-free electricity system by 2040 and net zero emissions will be achieved by 2050, should all go to plan.

It’s also important to note the relevance of the ‘Community Protection’ part of the legislation, which was enacted in 2019. Along with standards on labour and job protection, and stimulating the statewide economy, there is a strong intended environmental justice aspect to the CLCPA.

New York’s fleet of thermal power plants includes about 6GW of peaker plants, often the most polluting to run among fossil fuel assets – and some of New York’s peaker plants run on kerosene or heavy fuel oil, which are even dirtier than natural gas. Those were often built in poorer areas of New York City, which also housed many communities of colour.

Towards the end of 2022, the New York Climate Action Council, convened to oversee the CLCPA’s implementation, published its Scoping Plan. This was followed by the publication of the long-awaited Energy Storage Roadmap 2.0 by the New York State Energy Research and Development Authority (NYSERDA) and the state’s Department of Public Service, which set out how that 6,000MW energy storage target will be achieved.

Due largely to its favourable policy landscape, New York has sometimes been grouped among the US’ leading states for energy storage. However, unlike the leaders Texas on roughly 2GW and California with double that for cumulative grid-scale installations, New York only had just over 116MW, albeit 1,230MW had been awarded or contracted for already by the end of 2021.

So, what has held New York back? And can Roadmap 2.0 put it into the fast lane?

‘Missing money’

One answer to the first question above is “missing money”, according to CEO Jeff Bishop of energy storage developer-owner Key Capture Energy.

“We’ve been developing in New York state since 2017, and we have a portfolio of about 1,000MW of projects that are under development there, including two projects that are currently in operation, KCE NY1, KCE NY 3, [and] we have one that is at the very end of construction now,” Bishop says.

“For the rest of the state, the key question has been: how do you get the missing money? Where New York doesn’t have the volatility of a market like Texas and so hence, there’s not really the same value proposition there is down in Texas.”

However, with its goals under the CLCPA, New York will need storage, and lots of it, to integrate all the new solar, wind, enable the retirement of fossil fuel plants and so on.

Regular readers of will have seen that a key component of Roadmap 2.0, as it pertains to utility-scale energy storage – or ‘bulk storage’ – as the state defines it, is the planned introduction of tenders.

Those solicitations are still at the proposal stage, require regulatory approval and may change before being rolled out, but they appear likely to be an effective way to structure a market for battery storage, Bishop says.

“We really think that after this goes through all of the regulatory processes, and once they start issuing requests for proposals (RFPs), that this will be a way that we’re going to be seeing storage really taking off in New York State by 2025.”

Good market design, challenging timing

The result of that is the proposed Index Energy Storage Credit (IESC) programme. Similar to a Renewable Energy Credit (REC) mechanism, developers bid a strike price into a state-led procurement, indicating the revenue levels they need to realise to make a project work economically.

This strike price is benchmarked against a reference price indicator set by the state, in other words a “mechanism to look at what the project can reasonably earn in the standard ISO markets for capacity and day ahead energy,” and then pays the developer the difference between reference and strike prices.

It preserves some of the best features of renewable energy procurement programmes, Dr William Acker, executive director of trade association and technology accelerator New York BEST (NY-BEST) says, keeping sufficient performance risk on the developers and encouraging their market participation.

The big risk, and the big persistent challenge, is that of timing, according to energy storage market analyst Vanessa Witte at Wood Mackenzie Power & Renewables. With NYSERDA unlikely to open up RFPs until 2024 at the earliest, it remains unanswered whether the state is able to hit its target in time.

The New York ISO market is “not an easy market to construct in,” and 2030 may be “cutting it close,” Witte says, observing that a couple of developer contacts have expressed that opinion. New York will get to its targeted 6GW and likely surpass it, “but when is that really going to happen?”

There has also been frustration, Witte says, that New York utilities such as Con Edison have not been procuring large volumes. RFPs issued have set prices that aren’t reflective of market value. That said, this is the sort of challenge the Index Credit has been created to solve.

One immense boon for energy storage development is the passing of the Inflation Reduction Act (IRA). While there are many facets to that legislation, the introduction of the standalone energy storage investment tax credit (ITC) could unlock opportunities for New York developers.

Hunting the ‘missing money’ in New York’s energy storage market - Pro Bid Energy (2)

Developers keen on New York despite uncertainties

“Companies like mine are attracted to states that have aggressive policies, and goals and that are backing those up with opportunities to have stacked revenue streams around energy storage,” says Kelly Sarber, CEO of Strategic Management Group, a developer of more than US$6 billion of US clean energy projects, and on the Board of Directors at NY-BEST.

New York doesn’t quite have those fundamentals in place, with utility-scale storage only able to play into capacity and wholesale arbitrage markets, which “doesn’t support building big merchant energy storage projects,” Sarber says.

“California and Texas are leading the nation in the deployment of energy storage, and it all has to do with the way that those markets are constructed, and developers are not afraid of risk,” the developer says.

“You’ve got different revenue streams that are more predictable in those markets. You’ve got the benefits of energy storage being able to be monetised in those markets, to a degree that they’re not currently being monetised in the New York market.”

Nonetheless, Sarber has “probably 3,000MW incubating” in the New York market, with sites and substations acquired. In fact, as of April 2022, there was 12GW of energy storage in the NYISO interconnection queue, double the 2030 target.

That congested queue could however give the impression, or an “artificial comfort level” that achieving the goal will be relatively easy, due to a lot of developers seeing an opportunity coming, possibly with a view to flipping projects and selling them on.

‘Good projects will always get built’

Sarber says, however, that as a prolific developer, she is bullish on the New York market’s growth path ahead. The type of energy storage projects Strategic Management Group is working on are “necessary” for the state, and backed by strong policies, New York can achieve 6GW.

“I’m just nervous about the time that’s going to take, and whether we have enough time to get 6,000MW of energy storage built in New York by 2030, based on where we’re at today.”

Fellow developer Jeff Bishop at Key Capture Energy is similarly bullish and says the company has been encouraged by the state’s proactive approach and “massive amount of work” by stakeholders, citing that it’s a question of when, not if, New York’s bulk storage buildout will happen.

“My macro view is: good projects will always get built. It’s just a question of timing. As we’re looking at New York, with all of their climate goals, 6,000MW is going to be the minimum of storage, quite frankly, where they’re going to be needing longer duration storage coming up, they’re probably going to be needing some clean hydrogen.

“I learned a long time ago not to ever bet against New York and New England, where they definitely will achieve the climate goals that they have in place. Sometimes it takes longer, but [they] always get there.”

This is an extract of a feature which appeared inVol.34 of PV Tech Power, Solar Media’s quarterly technical journal for the downstream solar industry. Every edition includes ‘Storage & Smart Power,’ a dedicated section contributed by the team at


How much did five long duration energy storage projects get funding in New York? ›

New York awarded $16.6 million in funding for five long-duration energy storage projects and made another $17 million available for projects that advance development of long-duration energy storage technologies, including hydrogen.

What is New York's energy storage goal? ›

New York state has released a road map on how it will reach 6 GW of energy storage by 2030, representing at least 20% of peak electricity load. The state Energy Research and Development Authority and Department of Public Service submitted the proposal to the Public Service Commission.

How much is the energy storage market worth? ›

The Global Advanced Energy Storage System Market size in 2022 stood at USD 19,000 Million and is set to reach USD 48,500 Million by 2032, growing at a CAGR of 9%

What is the outlook for energy storage Bloomberg New energy Finance? ›

Costs are expected to remain high in 2023 before dropping in 2024. The energy storage system market doubles, despite higher costs. The global energy storage market will continue to grow despite higher energy storage costs, adding roughly 28GW/69GWh of energy storage by the end of 2023.

What is the largest energy storage project in the US? ›

The Moss Landing battery storage project is a massive battery energy storage facility built at the retired Moss Landing power plant site in California, US. At 400MW/1,600MWh capacity, it is currently the world's biggest battery storage facility.

What is the biggest energy storage project? ›

Largest energy storage plants
Ouarzazate Solar Power StationThermal storage, molten salt3,005
McIntosh CAES PlantCompressed air storage, in-ground natural gas combustion2,860
Cerro Dominador Solar Thermal PlantThermal storage, molten salt1,925
46 more rows

Who is the market leader in energy storage? ›

Fluence's software capabilities recognized as key driver of market leadership. ARLINGTON, Va. – January 27, 2022 – Fluence (NASDAQ: FLNC) has been named the top global provider of battery-based energy storage systems according to the 2021 Battery Energy Storage System Integrator Report published by IHS Markit.

Who is the market leader in storage? ›

Container-based storage solutions to boost sales in the market. Who are the top players in the market? IBM, Microsoft Azure, Dell Technologies, Equinix, NetApp, and Hitachi Vantara are the top players in the market.

How big is the US battery storage market? ›

The U.S. battery energy storage system market size was valued at USD 336.6 million in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 23.9% from 2020 to 2027.

What energy companies is Bill Gates investing in? ›

Form Energy Inc., an energy-storage company backed by Bill Gates's Breakthrough Energy Ventures, is planning a $760 million factory in West Virginia, the latest plant announced in the aftermath of President Joe Biden's landmark climate law.

What is the outlook for energy storage in 2023? ›

Despite higher energy storage costs, additions will reflect ~28GW/69GWh of energy storage by the end of 2023. Multiple markets announced energy storage targets totaling over 130 GW by 2030.

What is the energy market outlook for 2023? ›

Global energy consumption will grow by just 1.3% in 2023, amid a slowing economy and high energy prices.

What states are leading in energy storage? ›

Five states account for more than 70% of U.S. battery storage power capacity as of December 2020. California has the largest share at 31% (506 MW) of the U.S. total. Texas, Illinois, Massachusetts, and Hawaii each have more than 50 MW of power capacity.

What are New York State's top three sources of energy? ›

Electricity. Natural gas, nuclear energy, and hydropower consistently generate more than 90% of New York's electricity.

What is New York's renewable energy target for 2030? ›

More than 40 million megawatt hours of clean energy annually. More than 25% of the electricity expected to be consumed in New York State in 2030. Eliminating over 20 million tons of greenhouse gas emissions every year.

What is the single largest untapped source of energy in the US? ›

Marine energy—power generated from ocean waves, currents, tides, and temperature changes—is the world's largest untapped renewable energy resource.

What is the largest renewable energy company in the US? ›

1. NextEra Energy, Inc. NextEra Energy, Inc. is a leading clean energy company based in Florida, USA. The company is one of the largest renewable energy producers in the world, with a current generating capacity of approximately 30,000 megawatts, largely from wind and solar sources.

Who is the single largest user of energy in the US? ›

With more than 350,000 energy-utilizing buildings and 600,000 vehicles, the federal government is the nation's largest energy consumer.

Which is the most efficient as an energy storage system? ›

Energy storage in lithium-ion batteries is considered one of the most efficient.

What is the most cost efficient energy storage? ›

Lead batteries are the lowest cost option compared with other battery technologies, in terms of both upfront cost and over the lifetime of the system. An initial investment in batteries at a renewable energy facility is $150-$200/kWh compared to other systems that could cost up to three times as much.

What is the most popular energy storage? ›

Pumped Hydro Power

Pumped hydroelectric facilities are the most common form of energy storage on the grid and account for over 95% of the storage in use today.

Who is the world leader in battery recycling? ›

Ecobat is the world's largest recycler of batteries. We meet essential energy storage needs by making the business of batteries safer and more sustainable for a circular energy economy. In 2021, Ecobat's lead battery recycling business fully recycled 70 million car batteries.

Who is the world leader in smart storage battery? ›

Samsung SDI. Samsung is a worldwide leader in the lithium-ion battery storage market, offering residential customers the ability to connect to the grid and PV arrays for the most efficient energy consumption model.

How much money did New York get for infrastructure? ›

Announced funding to date: To date, approximately $104 million has been allocated to New York for infrastructure resilience in 2022.

How much did the pumped storage project cost? ›

Ippagudem Pumped Storage Project is a pumped storage project. The total number of penstocks, pipes or long channels that carry water down from the hydroelectric reservoir to the turbines inside the actual power station, is expected to be 6 in number. The project cost is expected to be around $2,427.069m.

How much did the Walcha energy Project cost? ›

Estimated to cost up to £3bn ($4bn), the Walcha renewable energy hub is being jointly developed by MirusWind and Energy Estate. Construction on the phase one development comprising the 700MW Winterbourne wind farm is expected to be started in 2020, with commissioning expected in 2022.

How much did the Crimson energy storage Project cost? ›

As Electrek reported, the BLM approved the $550 million, 350 MW Crimson Solar Project, and Crimson Storage is a part of that project; it will generate and deliver power through the Southern California Edison Colorado River Substation and will provide power for around 87,500 homes.

Where does most NYC money come from? ›

Where do the City's revenues come from? New York City has a very broad revenue base which includes City taxes, user charges, federal and State grants, and other sources such as licenses, permits, and fines.

How rich would New York be if it was a country? ›

The economy of the State of New York is reflected in its gross state product in 2022 of $2.053 trillion, ranking third in size behind the larger states of California and Texas. If New York State were an independent nation, it would rank as the 10th largest economy in the world.

How did New York City get so rich? ›

Key Takeaways. New York City became the financial epicenter of the world despite Philadelphia having a first-mover advantage. New York gained ground on Philadelphia thanks to its dominance in commercial trade, in large part thanks to the completion of the Erie Canal in 1825.

What is the largest pumped storage facility in the world? ›

Bath County Pumped Storage Station

Is pumped storage better than batteries? ›

Batteries are more cost-effective at delivering small amounts of stored energy over a short time at high power levels. Pumped hydro is more cost-effective at storing and releasing larger amounts of stored energy.

Is pumped storage clean energy? ›

Pumped storage hydropower is a form of clean energy storage that is ideal for electricity grids reliant on solar and wind power. The technology absorbs surplus energy at times of low demand and releases it when demand is high.


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