New York is the birthplace of our modern electrical grid. It's a point of pride, but also a source of pain for New Yorkers since it means that we have the oldest and most outdated system in the nation. The inefficiencies and periodic failures of our electric grid cost New York businesses and citizens billions of dollars every year.
Entrepreneurs and investors are ready to deploy more advanced, cleaner technologies and services that will reduce the vulnerability of our grid to natural disasters (like Hurricanes Sandy and Irene) and terrorist threats. They’re ready to deploy solutions that will benefit both urban and rural communities.
There's one problem: They’re prevented by outdated electricity sector regulations.
In an effort to address the outmoded rules and regulations that prevent innovation in our electrical system, New York state has been working for three and a half years on the Reforming the Energy Vision (REV) process. The purpose is to enable the transition to a modern, distributed and clean electrical grid that includes critical energy storage technologies.
Much emphasis has been put on solar power and other renewables, but there are still no clear market guidelines for energy storage -- meaning that many of the critical technologies needed to modernize and harden our grid to both natural and manmade disasters cannot be deployed at meaningful scale in the Empire State.
This inability of the New York Public Service Commission (PSC) to successfully implement REV has forced the legislature to take action. In June legislators unanimously passed an energy storage bill (A.6571 in the Assembly and S.5190 in the Senate). Thankfully, Governor Cuomo signed it into law at the beginning of December.
The bill calls for the New York State Energy Research and Development Authority (NYSERDA) and the state’s Department of Public Service to come up with a portfolio of energy storage policies, including a storage target, in the first quarter of 2018. While this is an important step forward, the state’s PSC still needs to determine the level of the target and whether or not it will be mandatory. It’s not time to celebrate just yet.
There will be powerful pushback against a bold, meaningful target. Much like lamp oil producers tried to prevent electrification from taking over their market at the turn of the last century, entrenched interests are currently obstructing the development of a competitive advanced energy storage market. This includes putting a hefty amount of pressure on the governor, legislature and regulators.
Widespread deployment of energy storage will benefit New Yorkers in a number of important ways. Energy storage enables the wide-scale deployment of renewable energy, enhances electric grid efficiency and resilience, provides grid flexibility, improves power quality, and minimizes load pocket congestion. It can also help replace older dirty peaker power plants (usually natural gas plants that may only turn on for a few hours or a few days per year) with cleaner energy sources.
Effective energy storage does all of this while ensuring grid reliability, saving New Yorkers billions in costly substation upgrades, improving public health, and addressing environmental justice concerns in neighborhoods throughout the state.
Deploying advanced energy storage will also be essential for New York to meet its 50 percent renewable energy and 40 percent greenhouse gas reduction targets by 2030.
New Yorkers invented the electric grid; we need to be at the forefront of reinventing it. We have to remove the barriers to entry that vested interests have put in the way of our innovators, entrepreneurs and investors. The next step is for policymakers to set a storage target bold enough to force the electricity utility companies to make way for the future.
Suzanne Hunt is president of Hunt Green LLC. Jigar Shah is co-founder and president of Generate Capital Inc. and a former board member of NYSERDA.