New York City’s Bigger Blackout Threat, and the Evolving Role of Distributed Energy Storage

Earlier this month, New York City demonstrated what it looks like when a major urban area endures a large-scale power outage.

But in the week after the high-profile blackout, which occurred after an equipment failure knocked out power to more than 72,000 customers, New York City endured a bigger threat to grid reliability—prolonged extreme weather. As a heat wave enveloped the region over the past week, the corresponding spike in air conditioning usage brought electricity demand to abnormally high levels. If the grid is unable to meet this demand, the power will go out. While it may not receive the same attention as the blackout that occurred earlier this month, maintaining this balance between supply and demand on the grid is critical at all times.

New York’s commercial and industrial (C&I) energy users play a valuable role in the efforts to maintain grid reliability. Demand response (DR) programs offered by the regional electric grid operator and utilities compensate C&I customers for reducing consumption from the grid temporarily when called upon, such as when a heat wave drives a spike in demand for power. Amid this most recent heat wave, Enel X dispatched about 140 MW of capacity over about 90 total hours of DR dispatch activity in New York, about 70 MW of which was dispatched in New York City.

This DR capacity not only helps energy providers maintain reliable access to power, but also helps them do so in a more affordable and sustainable way. Reducing demand when the grid encounters these conditions also reduces the need for the expensive, fossil fuel-dependent power generation equipment required to ramp supply quickly enough to prevent an outage. In a state with some of the country’s highest electricity costs and most ambitious emissions-reduction goals, the flexibility offered through DR programs is a valuable resource.

In New York, on-site energy storage and solar-plus-storage systems are helping to increase that flexibility. The ability to leverage low-cost power on-site can maximize earnings through DR—as well as minimize the costs of relying on the grid at other intervals—by eliminating the need to shut down energy-intensive equipment in the facility. This enables the C&I facilities that are unable to participate in DR by curtailing electricity consumption to provide relief to the grid in emergency situations. Across 9 DR dispatch events in New York in the last week, Enel X delivered about 70 MWh in capacity from energy storage assets.

New York has introduced additional programs that encourage the use of distributed generation to reduce the impact of peak demand on the grid. The Value of Distributed Energy Resources (VDER) program, for example, offers compensation for power exported to the grid, with pricing influenced by the environmental benefits and demand avoided as a result of that power (among other factors). Solar-plus-storage systems can be significantly valuable for this program, providing the control to export clean power at times when the value from the VDER program—and the value to the grid—is at its highest.

These value streams have helped to make New York one of the most attractive markets for energy storage in North America. Today, this business case has created new opportunities for C&I energy consumers to finance and outsource the management of distributed energy resource projects so they can capitalize on these opportunities without making a capital investment.

Distributed energy resources will play an important role in New York’s energy future. After experiencing one major power outage and enduring a weather event that intensified the risk for another, New York received a reminder of just how important that role will be.

To learn more, register for Energy Manager Today’s upcoming webinar, Deep Dive on New York’s Energy Storage Opportunity. The live session will discuss:

  • How New York’s VDER program aims to encourage the use of distributed generation and energy storage in the state
  • Different approaches to capitalizing on New York’s unique energy storage value streams
  • Economics of sample projects in different regions throughout the state

Don't miss this upcoming webinar, Deep Dive on New York's Energy Storage Opportunity
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Authored By Colin Neagle

Colin is a marketing manager for Enel X North America and editor-in-chief of the EnergySMART blog.

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