New York Battery and Energy Storage Technology Consortium, Inc.

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1 VIA ELECTRONIC FILING August 14, 2015 Hon. Kathleen H. Burgess Secretary to the Commission New York State Public Service Commission Empire State Plaza, Agency Building 3 Albany, New York Re: CASE 14 M 0094 Proceeding on Motion of the Commission to Consider a Clean Energy Fund; Cases 10 M 0457; 07 M 0548; 03 E 0188; 14 M 0101 Dear Secretary Burgess: The New York Battery and Energy Storage Technology Consortium (NY BEST) appreciates the opportunity to provide comments on Clean Energy Fund Information Supplement (CEF) submitted by the New York State Energy Research and Development Authority (NYSERDA) to the New York State Public Service Commission. The New York Battery and Energy Storage Technology Consortium ( NY BEST ) is a notfor profit industry trade association that serves as the voice of the industry for 150 member organizations on matters related to advanced batteries and energy storage technologies. Our membership covers the full span of activities related to research, development, production and deployment of energy storage devices, and currently includes technology developers ranging in size from small start up companies to global corporations, leading research institutions and universities, national labs and numerous companies involved in the electricity and transportation sectors. Our mission is to catalyze and grow the energy storage industry and establish New York State as a global leader in energy storage.we do this by: (1) Acting as an authoritative resource on energy storage, proactively communicating energy storage related news and information, and facilitating connections amongst stakeholders; (2) Advancing and accelerating the commercialization process for energy storage technologies, from research and development, to products and widespread deployment; (3) Educating policymakers and stakeholders about energy storage and advocating on behalf of the energy storage industry; and 1 P age

2 (4) Promoting New York s world class intellectual and manufacturing capabilities and providing access to markets to grow the energy storage industry in New York. General Comments Role of Energy Storage in CEF and AchievingState Energy Goals NY BEST has reviewed the CEF and, as requested, has provided specific comments by individual CEF sections below. However, to provide context and a more comprehensive summary of our perspective, we offer these general comments summarized by three main points: 1. NY BEST supports the goals of the State Energy Plan to reduce greenhouse gas (GHG) emissions by 40 percent by 2030 and 80 percent by 2050 and to generate 50 percent of the State s energy from renewable energy sources by NY BEST also supports the State s Reforming the Energy Vision (REV) initiative to build a cleaner, more resilient, efficient and affordable energy system. We applaud NYSERDA and the Commission on taking strong action to transform our electric grid and create the grid of the future in New York State. NY BEST believes that energy storage mustplay a central role in achieving the State s energy plan goals. More specifically, energy storage is an essential element to the State s success in reaching the 50% renewable energy goal by Given that solar and wind power are intermittent sources, only providing power when the sun is shining or wind is blowing, there are significant challenges in moving from generating a small portion of the state s energy from these sources to relying on them for most of our energy. Storing the energy produced by renewable sources for use at a later time when it is needed is essential to ensuring the reliability and efficiency of the electric grid as we move closer to a higher penetration of renewable energy. The combination of batteries and other energy storage devices with renewable energy sources allows the renewable energy to be used at any time andpotentially fulfills all energy needs. Just as the State is seeking a path toward grid parity in terms of pricing and costs for renewable energy, NY BEST believes it must also pursue grid parity in terms grid performance and must work to create a grid of the future that is reliable, resilient, efficient and clean. Energy storage provides the necessary solutions to these challenges and is more effective than conventional energy sources in fulfilling this important role. NY BEST believes energy storage needs to be explicitly built into the State s strategy to achieve its renewable energy goals. 2 P age

3 We urge NYSERDA and the Commission to champion efforts to more closely examine the amount of storage that will be needed on the state s electric grid to support the 2030 goal of 50% renewable energy and to far surpass this goal as we move beyond This planning and visionary approach is critical to ensuring the success of the State s initiatives and we would welcome the opportunity to work expeditiously and collaboratively with NYSERDA and PSC to complete this important work. 2. NY BEST recognizes that the CEF is a pillar to support the State s energy goals and is designed to complement the other initiatives championed by New York State, notably the market structure and design changes being developed in the Commission s REV Regulatory Proceeding.It s envisioned that new markets and rate structures under REV will monetize the benefits of DERs and help animate and support markets for these resources, with the CEF being used to fill gaps through targeted bridge incentives and other strategies. Given that market design and structural changes to support DERsare still being developed in the REV proceeding, a full and thoughtful assessment of the CEF and its proposed funding allocationsfor different programs and purposes is difficult to complete at this stage in the process. More specifically, there is still a great deal of uncertainty about whether and how the products and services provided by energy storage will be valued and monetized through the REV process and absent that knowledge, NY BEST is concerned that the funding provided in the CEF for energy storage may not be sufficient to spur market development of energy storage projects that are necessary to support the State s GHG reduction and renewable energy goals.the CEF as proposed by NYSERDA includes a core premise that in the absence of a fully functioning market, initiatives may be needed to spur solutions and innovations that accelerate the transition to market mechanisms. While NY BEST and our members will continue to work through the REV proceeding to create new rate structures, we urge the Commission and NYSERDA to recognize that bridge incentives for storage may ultimately be needed to create the greatest opportunity for market penetration for storage. Largely for this reason, NY BEST supports NYSERDA s request for flexibility to move funding between CEF portfolios. This flexibility will be extremely valuable to allow NYSERDA and the Commission to fill potential gaps that may remain following the creation of market mechanisms established through REV. 3 P age

4 3. Finally, NY BEST greatly appreciates NYSERDA s careful analysis of the energy storage industry as outlined in the CEFMarket Development and Innovation and Research portfolio discussions and the specific initiatives proposed. We agree that the challenges faced by the industry as outlined are appropriate, particularly in relation to the need to reduce the industry s soft costs and improve interconnection processes. NY BEST encourages NYSERDA and PSC to accelerate the tasks identified in the CEF in an effort to more quickly foster the energy storage markets. NY BEST and our members welcome NYSERDA s and the Commission s support of the energy storage industry and we offer our assistance in accomplishing the analyses and studies outlined in the CEF. Comments on Summary, Introduction and Background Sections (CEF Sections 1,2,3) NY BEST supports the goals of the State Energy Plan to reduce GHG emissions by 40 percent by 2030 and 80 percent by 2050 and to generate 50 percent of the State s energy from renewable energy sources by NY BEST also supports the State s Reforming the Energy Vision (REV) initiative to build a cleaner, more resilient, efficient and affordable energy system and to increase the penetration of distributed energy resources. IN addition, we supportnyserda s identified outcomes for the CEF including: thriving and selfsustaining clean energy industries able to operate without subsidies; greater levels of private capital invested in clean energy and jobs in New York; and significant reductions in greenhouse gas (GHG) emissions from the state s energy sector. The CEF outlines four program portfolios Market Development, Innovation and Research, Green Bank and NY SUN and requests that PSC provide NYSERDA with flexibility to move funds within each of the CEF portfolios, as well as between the Innovation and Research and Market Development portfolios. NY BEST is supportive of this request, especially as we believe it will allow NYSERDA to shift additional resources to technologies, such as energy storage,to capture emerging opportunities and to support the State s REV goals.given that much of the market design elements of REV have not yet been developed, NY BEST is concerned that the products, services and benefits offered by energy storage may not be properly valued in the marketplace and, as a result, bridge incentive funding for the energy storage industry may be needed to spur market penetration. Thus, we view flexibility between the CEF portfolios as critical to addressing this potential scenario. Importantly, however, we believe that future funding changes between portfolios and programs should be proposed through an open and transparent process with meaningful stakeholder involvement and input. NY BEST further strongly recommends that PSC and NYSERDA adopt NYSERDA s recommendation to create New Advisory Groups targeted to 4 P age

5 each of the Market Development and the Innovation and Research portfolios. These new advisory groups should include national and state experts in clean energy markets, technology research and development, energy policy and project development. NY BEST and our members offer significant expertise in the energy storage field and would be interested in serving on these groups. Comments on Goals (CEF Section 4) NY BEST agrees that new approaches are needed to advance new long range policy goals, as stated in the 2015 New York State Energy Plan(the 2015 State Energy Plan ): Achieving 40% greenhouse gas (GHG) emissions reductions by 2030 and 80% by 2050 in the energy sector; and Meeting 50% of electricity demand by 2030 with renewable energy Achieving a 600 trillion Btu increase in statewide energy efficiency NY BEST supports these goals and looks forward to working with NYSERDA and PSC to implement efforts to achieve them.ny BEST urges all officials involved in implementing REV the CEF and related cases to recognize the critical role energy storage must play in meeting the State s goals. With respect to the renewable energy goal of 50 percent by 2030, energy storage provides the services needed to ensure that the grid provides reliable, uninterrupted quality power as well as operates efficiently and effectively as we increase the penetration of renewable energy on the grid. Given that solar and wind power are intermittent sources, only providing energy when the sun is shining or wind is blowing, there are significant challenges and pressures placed on the grid as we move from generating a small portion of the state s energy from these sources to relying on them for most of our energy needs.energy storage provides the necessary solutions to these challenges and storage needs to be explicitly built in to the State s strategy to achieve its renewable energy goals. NY BEST also recommends that the State develop a more comprehensive strategy for achieving GHG emission reductions in the transportation sector. The State Energy Plan GHG reduction goal of 40 percent by 2030 and 80 percent by 2050 applies to the State s transportation sector. However, it is unclear from the State Energy Plan and the CEF how the GHG emission reductions levels for transportation which accounts for more than onethird of all GHG emissions will be achieved. NY BEST is interested in working with the relevant state agencies, industry and trade groups and interested stakeholders to develop a 5 P age

6 more detailed and comprehensive strategy for advancing zero emissions vehicles and other clean transportation initiatives to reach and exceed the State s GHG reduction goals for transportation. Comments on Portfolios and Proposed Initiatives (CEF Section 5) NY BEST seeks clarification on the specific language included on p.43 of the CEF which states, The Market Development portfolio will principally include activities facilitating the market for on site, behind the meter clean energy including: energy efficiency, on site distributed generation, renewable thermal, as well as storage, micro grids and other supporting energy technologies. While we appreciate the inclusion of energy storage in the list of activities, NY BEST is concerned that this language suggests that market development may be limited to behind the meter applications. Energy storage provides a host of benefits in both on grid applications and behind the meter applications as more fully discussed in Section 6.9 of the CEF. NY BEST would like to ensure that the market development work envisioned by NYSERDA in the CEF includes both applications. Comments on Market Development Initiatives (Section 6) NY BEST appreciates and supports the targeted initiatives for energy storage that are included in the CEF. We agree that energy storage will be a key enabling technology to achieve New York State s goal for an 80% GHG reduction by 2050 and we urge NYSERDA and PSC to also recognize that storage essential for meeting the State s 50% renewable energy goal as well. We greatly appreciate NYSERDA s acknowledgement of the energy storage industry s significance in New York State and the role NY BEST has played in growing the industry here in the state. NY BEST agrees that certain energy storage technologies have been slower to develop than others and that the industry faces challenges in relation to siting, permitting, interconnection, monetizing values and benefits and standardized safety and performance information. NY BEST supports the strategies included in the CEF to target key barriers and we welcome the opportunity to work with NYSERDA, the Commission and the industry to implement these strategies. We encourage NYSERDA and the Commission to work to accelerate the implementation of these initiatives in an effort to stimulate and grow New York s energy storage market at a quicker rate. 6 P age

7 NY BEST also supports NYSERDA s request for flexibility to move funds between portfolios to support programs and initiatives to work alongside these efforts to spur market penetrations of specific DER technologies. NY BEST is hopeful that the strategies outlined in the CEF for energy storage, combined with the market design being developed through REV, will be sufficient to establish a self sustaining market for storage. However, in the event that they are insufficient, we would urge NYSERDA and the PSC to consider developing bridge incentives for storage to help overcome remaining barriers faced by the industry, achieve scale for energy storage projects and spur a vibrant self sustaining market. Large Scale Renewables and NY SUN (CEF Sections 7 and 11) NY BEST strongly supports the State s goals to achieve 50 percent of its energy from renewable sources by We also believe a longer term more aggressive goal should be developed and planned for as part of the effort to achieve the goal of an 80 percent reduction in GHG emissions by As NY BEST has previously noted, energy storage will be vital to supporting the grid as we increase the penetration of renewable energy resources in the state. The intermittent nature of renewable resources can create challenges for the grid system in terms of balancing between supply and demand and maintaining system stability and reliability. Combining batteries and energy storage technologies with renewable resources can solve these challenges more effectively than conventional alternatives and energy storage provides a variety of benefits including: improving power quality, maximizing renewable generation assets, reducing environmental impacts, mitigating transmission costs, and managing risk. NY BEST strongly recommends that PSC and NYSERDA undertake a study to more closely examine the need for energy storage to support increasing levels of renewable energy on the State s electric grid. Similar studies have been commissioned elsewhere and they have proven useful in identifying appropriate levels of storage that will need to be in place to ensure system stability and reliability. For example, California is projecting that itsexpected increase in variable energy resources could require as much as 4,600 MWs of flexible resources in a 33% RPS scenario and a maximum 1 hour ramp of 11,600 MWs under a 50% RPS scenario. Key characteristics of energy storage resources include not only their total capacity but also include their response times, ramp rates and flexible operating range. A study of this nature will help ensure the State has appropriately planned for a significant increase in renewable and variable energy sources. 7 P age

8 Comments on Innovation and Research (CEF Section 8) NY BEST generally supports the CEF s approach to the Innovation and Research portfolio and we generally support NYSERDA s refined approach to cleantech innovation to better drive the scale of clean energy required to achieve the objectives of REV. NYSERDA proposes to maintain historic levels of investment in innovation while: (1) focusing on high impact strategic priorities while maintaining an ability to pivot to emerging opportunities, (2) embracing a stronger technology to market focus to drive cleantech innovations towards market entry, and (3) employing rigorous portfolio management. NY BEST and our members have benefitted greatly from NYSERDA s R&D funding and it has assisted numerous companies in developing new battery chemistries, perfecting their technologies and commercializing their products. This support has been vital to the energy storage industry in New York and we encourage NYSERDA and PSC to continue to recognize the important role that NYSERDA s R&D funding has hadinadvancing our industry and supporting the entrepreneurial start up community in New York. NY BEST is specifically pleased that the CEF includes a section in the Innovation and Research portfolio for Enabling Technologies Energy Storage wherein NYSERDA proposes to initially focus investments in energy storage application analytics, which will enable an improved definition of system performance and value, improve the matching of product specification and applications, and reduce balance of system costs (particularly for installation). NYSERDA also proposes to explore a catalog approach, which would develop standardized product offerings, optimized for specific applications or load profiles, which could be manufactured in volume. NY BEST supports these efforts and would welcome the opportunity to work with NYSERDA on this approach and engaging our members to develop the catalog of applications. NY BEST is pleased that NYSERDA has incorporatedenergy storage technologies in programs envisioned in other strategic priority areas identified in thei&r portfolio and we encourage NYSERDA and PSC to include energy storage in these priority areas: smart grid systems, renewable and DER integration, building innovations, clean transportation and innovation capacity and business development. Energy storage will likely play an important role in supporting all of these priorities and we appreciate this role being acknowledged in the CEF. 8 P age

9 Lastly, clean transportation is also a major priority for NY BEST. As noted in the CEF, the transportation sector accounts for 40% of the fossil fuel CO2 emissions in NYS. However, while several of the programs identified in the Clean Transportation section of the CEF are laudable, they are extremely limited in scope. As a result, it is unclear from the initiatives outlined in the CEF how the State plans to achieve an 80% percent reduction in GHG emissions in this sector by NY BEST strongly encourages NYSERDA to work with the other relevant state agencies, including the Department of Environmental Consideration and the Department of Transportation to develop a more comprehensive strategy to achieving meaningful reductions in GHG emissions from the transportation sector. NY BEST is very interested in assisting the State in efforts to bring together government and industry leaders and key stakeholders in an effort to develop such a comprehensive strategy. Conclusion NY BEST appreciates NYSERDA for their efforts in preparing the CEF Information Supplement.We view the CEF as critical pillar for achieving the State s energy goals and we similarly view energy storage as a key enabling technology to supporting those goals.ny BEST fully appreciates the time and effort that have been devoted to preparing the CEF and we are thankful for the opportunity to provide input. Should you have questions or need additional informationor assistance, please feel free to contact us at Respectfully Submitted, Dr. William Acker Executive Director NY BEST 9 P age