A Tale of Two States: What California and New York Teach Us About Long Duration Energy Storage Policy

In our second installment of posts looking at the energy transition tipping point, we explore two very different states that have successfully implemented pro-storage policy roadmaps. To learn more about the tipping point, read the white paper we developed in collaboration with Heatmap Labs. You can download the white paper here.

Getting tipping point-ready takes time—and states don’t have it

As renewables replace fossil fuels, every state and energy market in the U.S. is approaching its own Long Duration Energy Storage (LDES) tipping point. Once a grid relies on more than 50% renewable electricity, renewables need to be paired with utility-LDES to ensure system reliability. In simple terms, the addition of storage ensures grid operators can capture and store plentiful but intermittent energy from solar, wind, and other renewables until the grid needs it—and then deploy it on demand to communities and businesses.

But large energy development projects take time, and investment in LDES infrastructure involves complex permitting and financing. Thanks to the ambitious policies of California and New York—two very different states—there’s now a common sense, proactive policy roadmap for other states and energy markets to prepare for their own tipping points today.

An apples and oranges approach to LDES

California and New York are both big states with strong governments known for bold action on both renewable energy and its essential counterpart, LDES.

The similarities end there. Famous for its largely mild and arid climate, California’s economy and cultural identity center largely on tech, innovation, agriculture, and entertainment. On the opposite side of the continent, New York is known for its distinct seasons, with an economy and cultural identity that spans Wall Street to blue collar industry. While California is further along in its renewable transition, it now has to solve for the daily intermittency of the sun, while New York still has to transition away from a reliance on natural gas amidst cold winters.

Despite their differences, both California and New York are leaders in preparing and transforming their energy markets for a stable and resilient clean future. Both are investing simultaneously in renewable energy and LDES infrastructure despite dealing with different climate challenges. Together, Sacramento and Albany’s common sense, proactive policies serve as useful models for any jurisdiction looking to become tipping point-ready.

A golden state’s proactive LDES roadmap

It’s no secret that California has long been a national and global leader in renewable energy growth. A state with a track record of exceeding its renewable targets years in advance, just this summer California reached a new milestone: generating 100 percent of its energy from renewables for part of the day for 100 days in a row. In other words, California has already reached its LDES tipping point, generating more than half of its energy through renewable sources like solar, wind, nuclear, and hydropower.

Thankfully, California’s forward-thinking approach also applies to its LDES policy:

• In 2021, California became the first state to issue a mid-term reliability (MTR) mandate, requiring all utilities to procure 1,000 MW (1 GW) of non-weather dependent, zero-emission, long-duration energy storage to ensure grid reliability.
• The California Public Utilities Commission (CPUC), the state’s energy regulator, is working on establishing near-term commercial pathways for LDES projects through its upcoming Reliable and Clean Power Procurement Program.
• CPUC is also working on centrally procuring multi-day and 12+ hour LDES solutions through the state’s Department of Water Resources.
• Taken together, California is currently soliciting up to 2 GW of new LDES infrastructure.
• California isn’t stopping there, as CPUC has advised that the state needs up to 37 GW of LDES to retire its remaining natural gas by 2045.

California’s bold targets are the common policy across their climate strategy and have driven the state to impressive decarbonization results. Their recent LDES targets are no exception, and these targets have also emphasized pathways for grid operators to add long-duration storage resources with longer lead times. These longer lead time resources often can provide additional benefits – like Hydrostor’s A-CAES facilities, which are more cost-effective than many other storage technologies, because of their long lifetimes. The urgency of the state’s LDES procurement targets, coupled with the necessary patience to allow large infrastructure projects to be built, will be the key to preparing California’s grid for a future where the state will be relying even more fully on renewables.

“[The] procurement authorization issues a challenge to the industry, and we want to see developers deliver on the immense potential of these technologies to deliver tangible ratepayer benefits and cost efficiencies with the economies of scale we are enabling here.” – John Reynolds, CPUC Commissioner

California’s ambitious investment in LDES will also help flatten the state’s deepening duck curve, storing robust energy generated by solar during the day and distributing it across the state wherever and whenever it’s needed, even if the sun isn’t shining. Not to mention adding potentially $1.6 billion a year in net grid benefits by 2032.

A New York state of mind for LDES procurement

While New York state has not yet reached its LDES tipping point, it relies on more renewable energy than any other state east of the Mississippi. As of 2022, 29 percent of the state’s energy comes from renewable sources, with a legal commitment to generate 100 percent carbon-free electricity by 2040. New York’s hydroelectric plants generate some of the most reliable renewable energy in the world, and that’s where most of their renewable energy comes from – but it’s difficult to build new hydropower today, for political and environmental reasons. If New York is going to meet their climate goals, they’re going to need to add more intermittent renewables like wind and solar, and quickly.

And to add more wind and solar, New York needs more LDES urgently. Luckily, the state knows this and is already taking decisive action to become tipping point-ready:

• In January 2022, New York doubled its energy storage goal from 3 GW to 6 GW by 2030.
• In its roadmap this past summer, the New York Public Service Commission has committed to 3 GW of new utility-scale energy storage procurement.
• 20 percent of this (600 MW) will come in the form of 8-hour storage.
• The New York PSC roadmap also acknowledged that the state would need 4 GW of 8-hour storage by 2035 and at least 6.8 GW of 8-hour storage by 2050.

“The roadmap approved today by the New York State Public Service Commission allows NYSERDA to expand our collaborations with partners and implement key strategies to safely deploy energy storage at scale.” – Doreen Harris, New York State Energy Research and Development Authority President and CEO

The storage targets New York is moving forward with now will set the state up for success as it continues to add renewables and decarbonize its grid, streamlining and expediting LDES investment. And similar to California, New York has also put in place a procurement pathway for longer lead-time resources. This means the state’s future grid will benefit from large infrastructure projects that often have longer-lead times, but that can provide additional benefits – like Hydrostor’s own A-CAES facilities, which have a service life of more than 50 years.

Equally great? New York expects its new energy roadmap to potentially cut up to $2 billion from its statewide energy system costs. 

What other states can learn from California and New York

California and New York’s shared commitment to LDES illustrate two common sense policy strategies other states can adopt to become tipping point-ready. First, recognizing the need for LDES and setting procurement targets that catalyze faster adoption. Second, ensuring there is a pathway within procurement mechanisms for longer lead-time resources, that can provide important benefits to the grid and to ratepayers.

California and New York may be renewable energy leaders, but their tipping point preparation and policy can be replicated anywhere. While every energy market is unique, any state can become tipping point-ready with the right common sense policies in place.

Read the report from Heatmap Labs