New York Launches RFP for 1 GW of Energy Storage

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Written by Jesse Broehl for Industrial Info Resources (Sugar Land, Texas)--On July 28, New York launched its first request for proposals (RFP) for bulk energy storage, which in its first solicitation would procure 1 gigawatt (GW) of storage along a roadmap to eventually procure 6 GW. All forms of energy storage will be considered, such as pumped hydro, but the expectation is that battery energy storage systems (BESS) will be the primary if not sole contenders. Industrial Info is tracking more than 6 GW of BESS projects in various stages of development in New York, which are likely to be contenders for this RFP.

Click on the image at right for a pie chart showing the status of utility-scale BESS projects across New York.

IIR is Tracking a Robust BESS Market in New York
IIR's database shows there is approximately 6,201 megawatts of BESS capacity in various stages of development in New York state for the NYISO market. This capacity is represented by 58 plants. Most or all of these plants are likely contenders for New York's solicitation rounds. Five BESS plants are currently operational in New York. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can click here for a full list of plants.

BESS Was Spared the Tax Credit Phase-Out that Hit Wind and Solar
BESS has been growing rapidly recently throughout the U.S. as costs have come down and efficiency has gone up. Furthermore, unlike solar and wind, which saw their tax credits set for a phaseout in recent federal legislation, BESS projects retain full tax credit eligibility through 2033, with a gradual phase-down thereafter (75% in 2034, 50% in 2035, and 0% in 2036).

In fact, there is a shift underway in the wake of the federal legislation that is seeing developers shifting priority away from wind and solar projects and into BESS due to the tax credits remaining in place. The tax credits apply to both standalone storage systems and those paired with solar or wind.

New York Bulk Energy Storage Program
Like most energy initiatives in New York, the Bulk Energy Storage Program is administered by the New York State Energy Research and Development Authority (NYSERDA). The solicitation mechanism is an Index Storage Credit (ISC) incentive, which is modeled in part after the Renewable Energy Certificate (REC) and Offshore Wind Renewable Energy Credit (OREC) utilized in other NYSERDA programs.

The credits essentially act as a power purchase agreement (PPA) to give project owners greater revenue certainty while incentivizing them to participate in wholesale energy and capacity markets.

ISCs will be created based on a project's operational availability, and will represent one megawatt hour of energy storage capacity that is operational and available to discharge on a given day; projects will be credited and compensated based on the operational availability they achieve in each month over the course of the 15-25-year contracts.

Energy Storage RFP Kickoff Next Steps
With the July kickoff, New York's RFP goes into a qualifying stage. Entities interested in responding to this solicitation must first complete "Step One," which is an initial qualifying step for proposers to demonstrate program eligibility. Step One Eligibility Applications are due to NYSERDA by 3 p.m. Eastern Time September 4. Once proposals are deemed eligible by NYSERDA, proposers will be invited to submit a "Step Two" bid proposal for project evaluation.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).