How a more flexible grid could save New York billions

Julia Calderon’s power used to go out regularly. She lives in Warwick, and remembers once having to bury an ice cream cake in the snow to keep it from melting on her daughter’s birthday.

“Somehow it worked okay. We’re so used to it,” she said of the outages.

But when a major winter storm hit last month, she wasn’t worried. She hasn’t lost power for more than a few seconds at a time since getting a battery installed in her garage a few years ago. The battery doesn’t just help keep her lights on; it helps keep her neighbors’ on, too, and reduce strain on the whole electric grid.

Transforming NY’s power grid

That’s because Calderon’s battery is connected to hundreds of others in a network known as a “virtual power plant” that allows her utility to redistribute her unused energy.

Scaled up, such a network could transform New York’s grid. Tapping into the collective power of millions of smart devices in homes and businesses to balance electricity needs, experts say, would make the grid more reliable, help phase out polluting power plants, and save billions each year on energy bills.

Calderon got her battery free through a pilot program run by Orange & Rockland Utilities Inc. and the solar company Sunrun. The 350 households participating can deliver close to 50 megawatts to the grid at peak times — about enough to supply the entire town of Warwick for a couple of hours.

And they’re saving money: Calderon’s electric bill drops as low as $40 some months, she said, and she spends less on energy overall even with the $70 a month she pays to lease her solar panels.

Rising demand, soaring bills

The concept of virtual power plants is gaining traction among energy experts, who say such programs could be instrumental in coming years as the state grapples with rising energy demand and soaring energy bills

New York was early to embrace the idea, but efforts to implement it at scale have faltered.

This year, Gov. Kathy Hochul’s executive budget proposal included $33 million to subsidize households who register new smart thermostats, in what she’s called a “clever” approach to lowering bills. Virtual power plant proponents say it’s a start.

In the Orange & Rockland program, participants allow the utility to call on their batteries when needed, but Calderon says she hasn’t noticed.

Christian Woods, who manages the pilot, said that participants always retain 20 percent of their battery life in case of emergencies.

According to a state-commissioned report by the Brattle Group consultancy last year, if hundreds of thousands of customers participated in such efforts, New Yorkers could save at least $2.4 billion annually by 2040. And many of the savings could be achieved sooner.

Reliability

Virtual power plants could also allay New York’s growing reliability concerns.

The New York Independent System Operator, the nonprofit that manages the state’s grid, has warned that New York may not have enough energy to meet demand over the next decade, as large energy users like data centers come online and the state electrifies homes and transportation.

Last summer, NYISO had to activate emergency protocols during a worse-than-expected heat wave.

In response (and to some controversy), NYISO recommended the state delay the retirement of multiple fossil fuel plants and strongly consider the construction of new ones.

Some experts argue that virtual power plants offer a cheaper, cleaner way to close the gap.

Calderon doesn’t know why so many of her neighbors were reluctant to join the battery program. Despite some hiccups installing her system, she said – like the leak her roof sprung after she had solar panels installed, which she had to pony up more than $2,000 to get fixed – the added reliability and lower monthly bills have brought her peace of mind.

“I think it’s well worth it,” she said.

This story was edited from the original version that ran in New York Focus.