A little over two years ago we reported that utility-scale energy storage could be “around the corner” thanks to flow-battery technology that relies on a rare earth mineral called vanadium. That vision leapt closer to reality last week.

The New York State Energy Research and Development Authority (NYSERDA) announced it will partner with energy storage company American Vanadium on a demonstration project that will use a CellCube vanadium redox flow energy storage system at the MTA’s 2 Broadway facility in downtown Manhattan.

“This is not a technical demonstration, it’s to analyze how we can shift energy around during peak load periods,” American Vanadium President & CEO Bill Radvak told Breaking Energy. Major New York utility Con Edison – which also supports this project – is keen to expand its demand response efforts in order to more efficiently manage the flow of electricity through the power grid when demand peaks.

“This is becoming more of an issue as utilities are charging more during peak demand times,” said Radvak. “They are not doing it to punish users,” but to incentivize energy efficiency and strengthen grid reliability, he said. “Con Ed understands that change is needed. Now renewables and storage are how transmission is being planned.”

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The CellCube batteries will supplement an automated demand response system developed for the 1.6 million square foot New York City office building by Lawrence Berkley National Laboratory. The project will demonstrate how the battery technology – capable of multi-hour and multi-megawatt energy storage – can enable commercial buildings to be “smarter” about how and when they use energy, and provide resiliency in times of need.

Read more about vanadium flow battery technology on Breaking Energy here, and read about vanadium market fundamentals and the emerging global energy storage market here.

“If utilities’ core goal is to change peak loads and rely more on renewables, you need to shift that load around with storage, particularly if you want to integrate more solar,” Radvak said.

Incentive Programs Turning Towards Energy Storage

Con Ed has proposed to offer new incentives for systems that provide summer on-peak demand reduction. These incentives amount to $2,100/kW for battery storage systems.

Lithium-ion storage technology can’t really handle more than an hour, so long-duration storage is really the realm of flow batteries, according to Radvak. “The systems will typically be charged at night when the rates are lower, then during the daytime, the stored energy will be employed to automatically reduce daily peak loads and reduce demand charges that can often account for half of the facility’s electric bill. The additional energy will also be employed when demand curtailments are requested from Con Edison and/or NYISO [New York Independent System Operator] to reduce peak load demands on the grid,” according to information provided by the project’s stakeholders.

“New York is clearly creating a leading energy storage marketplace and the knowledge gained from this demonstration will help realize gains in building and grid energy efficiency, save money for electric ratepayers and, importantly, add a new weapon to the arsenal of resiliency tools in the event of future grid outages,” Radvak said in a statement.