Study Finds Energy Storage Can Save Long Island Electric Customers $390 million over the Next Decade - Replacing 2,300MW of Fossil-Fueled Peaker Power Plants with Energy Storage by 2030 can save customers money, maintain electric grid reliability and reduce air pollution

A new study released by the New York Battery and Energy Storage Technology Consortium (NY-BEST), in partnership with the consulting firm, Strategen, finds that more than 2,300 MW of fossil fueled “peaking” power plants on Long Island can be cost-effectively replaced with energy storage over the next decade, saving Long Island customers more than $390 million over the next ten years and significantly reducing harmful air pollutants. The study, conducted by Strategen, examined the operations of Long Island’s aging fleet of fossil-fueled “peaker” plants, those power plants that operate primarily only during high demand or “peak” times. The analysis shows that it is technically feasible and cost-effective to replace more than 2,300 MW of Long Island’s 4,300 MW fossil-fueled peaker plants with energy storage over the next decade. It also finds that approximately half of the peaker plants, around 1,100 MW, could be retired and replaced with energy storage by 2023. The remaining 1,200 MW could be replaced by 2030, in conjunction with New York State’s plans to increase solar energy, energy efficiency measures, and offshore wind resources.

“Replacing Long Island’s oldest, least efficient, and most polluting fossil-fueled peaker plants today with lower cost, emission-free energy storage is a no-regrets solution for the Long Island Power Authority (LIPA), PSEG Long Island, Long Island electric customers, the environment, and the State of New York, said Dr. William Acker, Executive Director of NY-BEST. “As we work to achieve New York’s nation-leading and mandated goals for a carbon-free electric grid by 2040, energy storage is an essential proven technology that will enable renewable energy, maintain reliability, reduce emissions and provide a resilient electric grid.”

ATehachapi Energy Storage Project, Tehachapi, California
https://en.wikipedia.org/wiki/Battery_storage_power_station 

As part of New York State’s commitment to halting climate change, the State has mandated a carbon-free grid by 2040. The study released October 28, 2020 examines the cost-effectiveness of retiring Long Island’s aging and inefficient fossil-fueled peaker fleet and replacing it with energy storage, a “low-hanging fruit” in the Island’s energy transition. The analysis shows that replacing the aged, polluting peaker fleet will reduce energy costs, create jobs, build a more resilient power system, and reduce air pollution and greenhouse gas emissions in communities across Long Island, including Potential Environmental Justice Areas.

Long Island is home to 26 fossil-fueled power plants, composed of 74 individual turbine units, that seldom operate yet impose significant costs on Long Island electric customers. Of LIPA’s portfolio of 5,667 MW of fossil-fueled generators, 4,357 MW are “peaker plants” that operate at an annual capacity factor of 15% or less (i.e., roughly 15% of the time).

To maintain these peakers, LIPA customers pay an estimated $473 million annually in capacity costs, almost three times the market rate for capacity resources cleared through NYISO’s competitive markets.

Retiring and replacing these aging assets has the potential to create $10.5 million of annual savings in 2021, growing to $150 million annually in 2030. Over the next decade, fossil peaker replacements could save LIPA customers as much as $393 million, representing savings of approximately $360 per household across LIPA’s 1.1 million customers.

“This important and timely study demonstrates the significant potential and cost savings for energy storage on Long Island as we transition to 100% zero-carbon electricity,” said Gordian Raacke, Executive Director of Renewable Energy Long Island. “The findings make it clear that we can take steps today to replace many of Long Island’s antiquated and polluting fossil-fueled power plants with energy storage while saving consumers money.”

"This groundbreaking study shows that, over the next decade, fossil-fuel peakers on Long Island can reliably be replaced by cleaner and cheaper battery storage, along with renewables and efficiency investments,” said Lewis Milford, president of Clean Energy Group, a national nonprofit that works on peaker replacement issues. “In addition to its importance in this New York region, this study gives other cities and states a good roadmap on how to replace the hundreds of dirty, expensive fossil-fuel peakers that now pollute environmental justice communities in other parts of the country.”

“Fossil-fueled peaker plants are dirty, expensive and disproportionately harm environmental justice communities. This study shows what we’ve long known to be true – New York can replace its pollution emitting peaker plants with emissions-free energy storage while saving consumers money. It’s a win-win. Achieving New York’s nation-leading climate goals requires that we go all-in on clean energy solutions, and fast. Scaling-up energy storage must be part of New York’s climate strategy – not only on Long Island, but all across the state,” said Chris Casey, Senior Attorney at NRDC.

The full Report can be viewed here https://www.strategen.com/reports-1/ny-longisland-peaker.

Key results of this study show: 

• It is feasible and cost-effective to replace 1,116 MW of Long Island’s fossil-fueled peaker plants with energy storage by 2023 and over 2,300 MW by 2030.
• Potential savings of up to $393 million of savings can be achieved for LIPA customers over the next decade by retiring and replacing aging fossil assets.
• Replacing peakers with storage will eliminate 2.65 million metric tons of CO2, 1,910 tons of NOx, and 639 tons of SO2 of emissions annually, resulting in societal benefits of $163 million annually.
• Of the 2,300 MW of fossil peaker plant replacements, 334 MW could be retired and replaced immediately, and another 782 MW could be phased out by 2023, coinciding with the implementation of local emission control regulations and the expiration of existing LIPA long-term contracts.
• In the East End of Long Island there is a near-term opportunity for up to 90 MW of fossil peakers to be displaced with energy storage, and additional opportunities over time as local constraints are addressed.

The New York Battery and Energy Storage Technology (NY-BEST) Consortium www.ny-best.org is a non-profit corporation and industry-led consortium with more than 185 organizational members. NY-BEST’s mission is to catalyze and grow the energy storage industry and establish New York State as a global leader in the energy storage industry. 

Press Release dated October 28, 2020

Quantifying the value of investing in distributed natural gas and renewable electricity systems as complements: Applications of discounted cash flow and real options analysis with stochastic inputs

Abstract:

One energy policy objective in the United States is to promote the adoption of technologies that provide consumers with stable, secure, and clean energy. Recent work provides anecdotal evidence of natural gas (NG) and renewable electricity (RE) synergies in the power sector, however few studies quantify the value of investing in NG and RE systems together as complements. This paper uses discounted cash flow analysis and real options analysis to value hybrid NG-RE systems in distributed applications, focusing on residential and commercial projects assumed to be located in the states of New York and Texas. Technology performance and operational risk profiles are modeled at the hourly level to capture variable RE output and NG prices are modeled stochastically as geometric Ornstein-Uhlenbeck (OU) stochastic processes to capture NG price uncertainty. The findings consistently suggest that NG-RE hybrid distributed systems are more favorable investments in the applications studied relative to their single-technology alternatives when incentives for renewables are available. In some cases, NG-only systems are the favorable investments. Understanding the value of investing in NG-RE hybrid systems provides insights into one avenue towards reducing greenhouse gas emissions, given the important role of NG and RE in the power sector.

Highlights

• Natural gas and renewable electricity can be viewed as complements.

• We model hybrid natural gas and renewable electricity systems at the hourly level.

• We incorporate variable renewable power output and uncertain natural gas prices.

• Hybrid natural gas and renewable electricity systems can be valuable investments.
...
Under standard electricity rates and without incentives for solar, the hybrid NG-RE investment would take 14.46 years to payoff (or 6.45 years with incentives). These figures are 12.6 and 4.27, respectively, under a TOU (Time of Use) electricity rate structure and when net metering is available.

Similarly, for the case of a hospital located in Suffolk County, NY, the hybrid NG-RE systems consistently produce positive NPVs (Net Present Values) and ROVs (and generally more favorable outcomes than the single technology alternatives), and the payback periods are much lower than the residential applications given the scale of the investment.... Investing in a hybrid NG-RE system pays off in 4.98 years without incentives (3.25 years with incentives) under a standard electricity rate structure, and respectively, 4.54 years without incentives (and 2.96 years with incentives) under TOU rates and net metering. On the other hand, while the hybrid NG-RE systems are more attractive than their single-technology alternatives with solar incentives, the NG-only system is more attractive when incentives are unavailable. Again, all DG (Distributed Generation) systems are economically favorable relative to BAU, and the same patterns comparing the findings under high NG price volatility relative to low NG price volatility unfold.

Study Finds 100 percent Renewable Electricity Possible on Long Island by 2030

http://www.renewableenergylongisland.org/pressRelease.cfm?releaseID=163

The Long Island Clean Electricity Vision, commissioned by Renewable Energy Long Island (reLI) and environmental, public interest, and other advocacy organizations, finds that 100 percent clean, renewable electricity is now possible for Long Island.

The analysis, performed by Synapse Energy Economics, concludes that a clean energy transition could take place within two decades, at relatively modest cost and with significant benefits. Such findings are timely given that Long Island is at an energy crossroads, with the Long Island Power Authority facing long-term power purchase decisions as many fossil fuel power purchase agreements expire in 2013.

Key findings of the Long Island Clean Electricity Vision are: · Using cautious assumptions, it appears technically feasible that renewable energy sources can supply all residential electricity needs by 2020. · By 2030 all of Long Island could have a 100 percent renewable and zero-carbon electricity supply. · Aggressive energy efficiency efforts, large scale wind, solar and other renewable energy technologies would need to be built to replace old, inefficient fossil-fueled power plants. · During times when not enough renewable energy is available to meet electricity demand, some existing fossil-fueled power generation would be used to meet demand, but renewable energy credits would be purchased to offset their emissions.

The study was based exclusively on technologies which are commercially available today. “We now have everything we need to make the transition from dirty and dangerous fossil fuels to a clean, and renewable electricity supply,” said Gordian Raacke, Executive Director of Renewable Energy Long Island, a regional not-for-profit organization...

 

While this is the first study examining a 100 percent renewable energy future for Long Island, numerous other studies have come to similar conclusions for other regions. [They include a 2012 National Renewable Energy Laboratory study for the entire U.S. (Renewable Electricity Futures Study http://www.nrel.gov/analysis/re_futures/ ), a world-wide study by Jacobson/Delucchi (Stanford University) A Plan to Power 100 Percent of the Planet with Renewables, http://www.scientificamerican.com/article.cfm?id=a-path-to-sustainable-energy-by-2030, and a World Wildlife Fund study, The Energy Report – 100% Renewable Energy by 2050 http://www.panda.org/energyreport. And, many regions already have goals for 100% renewable energy, and some are well on their way or are already meeting these goals. Examples include Scotland and Denmark, as well as the cities of San Francisco, CA and Munich, Germany.]

...

The study finds that the cost of switching to a 100 percent renewable electricity supply is modest: average customer bills are estimated to increase by roughly 8 to 12 percent. On a typical monthly LIPA bill, this amounts to $12 to $18, or the cost of a pizza. The indirect cost of current fossil fuel use to individuals and society, such as environmental and health-related costs from pollution, are not considered in this comparison.

By Harnessing Power of Group-Buying, One Block Off the Grid to Help Long Islanders Go Solar

http://www.mercurysolarsystems.com/content/newsroom/releases/032111b.asp

Solar group-buying leader One Block Off the Grid today announced the launch of a 90-day deal on home solar systems in Long Island, NY. Using group purchasing power, One Block Off the Grid has secured a 15 percent group discount on both panels and installation on behalf of all Long Island homeowners. The deal is being offered in partnership with panel manufacturer Canadian Solar and one of the East Coast's leading installers, Mercury Solar Systems.

'Now that the LIPA rebate is once again fully funded, we're encouraging Long Island homeowners to move forward with going solar now,' said Dave Llorens, CEO and founder of One Block Off the Grid. 'The LIPA rebate is strong and can cover up to $17,500 of a homeowners' solar installation costs. One Block Off the Grid's deal brings the total cost down further, but it only lasts 90 days. There's a real imperative to move forward now.'

One Block Off the Grid negotiates group discounts in markets where there are strong incentives and rebates for going solar. Long Island residents can combine One Block Off the Grid's discount with the Long Island Power Authority (LIPA) rebate to significantly reduce their overall cost. Homeowners will also receive a federal tax credit equivalent to 30 percent of the cost of the solar system.
...
This is the second solar group discount One Block Off the Grid has offered in Long Island.
...
The Long Island group discount on solar kicks off on March 21, 2011 and is available until May 21, 2011. To participate and get a free evaluation for solar over the phone, homeowners should sign up on the One Block Off the Grid website, http://1bog.org.

One Block Off the Grid organizes group discounts on solar energy. Since 2008, One Block Off the Grid has run over 50 group deals in ten different states and helped thousands of homeowners go solar. In addition to providing group discounts, the company vets solar installers on behalf of homeowners and manages the entire installation process from beginning to end, at no charge. The company has been featured in dozens of major media outlets including The New York Times, The Economist, The Wall Street Journal, Huffington Post, USA Today, Marketplace, Wired, Time, and GOOD Magazine. For more information, visit http://1bog.org

Mercury Solar Systems www.mercurysolarsystems.com
Press release dated March 21, 2011