Short Power in Long Island
Friday 13th update: LIPA is telling its customers to cut "all nonessential" usage this afternoon as they struggle with the issues below. It's all hands on deck to keep the lights (and air conditioning) on today. Thursday's story continues below.
Long Island faces some of the nation's highest wholesale electricity prices. The peninsula/island* has challenges including an older, dirtier generation fleet; more reliance on fuel oil; and frequent congestion (and outages) on the few large transmission lines that connect it to the rest of the state and New England.
This week saw a striking combination of those challenges. The wholesale power market, NYISO, is arranged into zones, of which K covers Long Island.
This is the real-time wholesale electricity price (LBMP) for Zone K over Wednesday and Thursday of this week.
There are three items worth calling out:
- For a single five-minute period at 8am on Wednesday morning, the price was driven to negative $3,855.86 per MWh. This is likely due to multiple constraints in the market model being infeasible following transmission challenges - no selection of available resources would give the model the output it wanted, so pricing moves to a steeply-sloped transmission outage demand curve. At this morning's Operating Committee NYISO were not ready to discuss the issue but I expect them to return with an explanation - so far, they've simply confirmed that the price was not a mistake.
- The zone spent much of Thursday late afternoon and evening over $1,100 per MWh, driven (again) by congestion.
- It's harder to eyeball from the chart, but the average LBMP over those two days was an expensive $183.39 per MWh - for comparison, the average a week previously was $52.33**.
The transmission outages were particularly poorly timed - August afternoons - and Long Island is not currently well equipped to function as a true (energy) island. What does this mean for businesses on Long Island?
- Power prices are high and likely to remain so. There is strong demand to install solar&storage systems, driven both by power costs and NYSERDA incentives, which can mitigate those costs.
- Willing businesses will increasingly be asked to help support the grid, in exchange for compensation. NYISO's Special Case Resource (SCR) demand response program is playing a vital role to maintain capacity this week, having been dispatched over the past three days and due to be dispatched tomorrow (Friday). That is an unheard of utilization level - the most SCR activations for any New York customers since at least 2013. Customer opportunities will grow at both the NYISO and LIPA level, but many businesses will look to participating via battery storage (whether with solar or standalone) rather than dropping their load day after day.
- LIPA will be pushed to continue cleaning up its aging generation fleet, while maintaining reliability and limiting cost increases. This will likely include accelerating (and adding to) the measures in their Utility 2.0 Long Range Plan. That includes opportunities for Long Island businesses, such as offering their energy flexibility into a Non-Wire Solution: LIPA paying for distributed resources such as storage and energy efficiency rather than building or upgrading distribution equipment.
If you'd like to see what's going on in NYISO today, start with their real-time dashboard. If you'd like to talk about what energy storage could mean for your business, reach out.
*the legal fight over Long Island's status has gone as far as the Supreme Court. Really.
**yes, a fuller comparison would be to adjust for weather.