Why one upstate town has become a hotspot for battery storage projects

ULSTER — In New York’s sprint to build more battery energy storage systems, not all regions are built equal.

These systems store energy from the electrical grid when demand is low and release it when demand is high. In New York, they are disproportionately located in the Hudson Valley. And in the Hudson Valley, they are concentrated in the town of Ulster, which is reviewing three proposals from three companies.

That’s due to a confluence of reasons related to how the state’s electric grid works.

New York essentially has two grids, said Malaquias Encarnacion, the managing director of Carina Energy, which develops battery system projects for energy companies. He called the grids “poorly connected.”

“You have a lot of renewable generation north and west of the state,” he said — including three nuclear reactors in Oswego County and wind and solar projects around the Great Lakes — while most of the demand is in the southern part of the state, including New York City.

The renewable energy must get south to supply the New York City area, but it faces bottlenecks in the form of overtaxed transmission lines. The New York Independent System Operator, a not-for-profit organization that manages the state’s high-voltage electric grid and competitive wholesale electricity markets, estimates that congestion costs in just one of the bottlenecks could hit between $2 billion and $5 billion by 2035.

The Hudson Valley sits between two major bottlenecks: the Central-East corridor to its north and the UPNY-ConEd interface outside New York City to the south. A map of the state’s energy grid shows three major transmission lines running along the Hudson River between these corridors. Siting the system along these lines could ease congestion, Encarnacion said, discharging energy in times of high demand and acting “like a pressure valve.”

The energy asset analysis platform Modo Energy states development of battery systems is “centered in the Hudson Valley.” As of earlier this year, there were more than 80 planned battery systems in the state that would produce 11 GW of energy, Encarnacion said. The 18 projects proposed in the Hudson Valley and Catskills would produce 2.8 GW of that total.

Ulster Town Supervisor James Quigley compared the large number of battery storage proposals in his town to a preponderance of gas stations near a highway stop.

In that analogy, Ulster’s “highway stop” is the Hurley Avenue substation, which three proposed battery systems would hook into.

Chris Linsmayer, a spokesman for Key Capture Energy, which wants to build systems in Saugerties and New Paltz, compared substations to a wall socket.

“Just like your phone connects into a wall socket, we connect into the electrical grid through a substation,” he said.

More than two years ago, the state Public Service Commission approved a goal of getting 6,000 MW of battery storage online by 2030, half of which would be from large-scale projects like those proposed in Ulster. About 562 MW were up and running as of June 30, according to the state, or less than a tenth of the 2030 goal.

The goal stems from the landmark 2019 Climate Act, which calls for 70% of New York energy to be renewable by 2030. Battery storage is a major component of that effort, since the systems smooth out the peaks and troughs of solar and wind energy, releasing energy when the wind isn’t blowing or the sun sinks below the horizon.

Battery storage systems can also replace “peaker plants,” which are generally natural gas-powered and activate when energy demand is high. Battery systems are also superior to peaker plants because they can supply energy to the grid “instantaneously,” while older peaker plants can “sometimes take hours,” said Mark Turner, vice president at Terra-Gen, which is proposing a 250 MW battery system in Ulster.

As a regional hub, the Hurley Avenue substation is particularly attractive for energy companies. It is one of about a dozen 345-kilovolt substations, the highest-capacity substations, in the Hudson Valley. It also distributes energy regionally, said Mike Carella, the manager for Terra-Gen’s Ulster project.

“At Hurley, it steps down to multiple lower voltages that then get distributed across the region, and so fundamentally these projects promote resilience and reliability,” he said. “Those benefits, by being at Hurley, are then diffused amongst the largest amount of ratepayers and customers that are downstream from that major node in the system.”

But despite their promise, many residents aren’t convinced battery storage systems are safe. A handful of fires, which were arguably isolated incidents, have stoked grassroots opposition in New York, which is home to more than 80% of the nation’s moratoriums on the facilities, according to Carina Energy, a consulting firm.

There are 90 active moratoriums on battery systems in New York. Western New York leads the state in moratoriums, followed by the Hudson Valley, with 15.

Gardiner and Hurley, both near the town of Ulster, are among the communities to have blocked battery storage projects. Hurley town Supervisor Michael Boms expressed opposition to battery systems in an interview with the Times Union last year. The town formed an advisory body that began meeting in October to provide the Town Board with a comprehensive plan as to how to appropriately regulate the facilities.

Jillian Fried, a member of the advisory body, said she is opposed to battery systems “as the technology exists today,” because they use lithium-ion batteries, which can produce large fires that are essentially impossible to extinguish.

Fried is not alone. About two dozen protesters rallied outside an event held by Assemblywoman Sarahana Shrestha on Sept. 19 to voice opposition to the proposed projects, according to the Daily Freeman. Shrestha, an environmentalist, supports battery systems and co-authored an FAQ with state Sen. Michelle Hinchey last year, stating they found no safety flags with the Terra-Gen project in Ulster.

Battery system developers say they try to proactively address the concerns of citizens and local officials.

Linsmayer said Key Capture Energy has hosted an open house with residents in Saugerties so they could ask the company’s team, including safety experts and environmental engineers, questions about the project.

Terra-Gen’s efforts include two mailings and an online presentation last summer that drew about 100 participants, Carella said, as well as a presentation to the Town Board and meetings with local officials. The company was also “working very closely” with local fire departments, he said.

But opposition persists. With the state behind on its renewable energy goals, state Sen. Brian Kavanagh and Assemblywoman Dana Levenberg introduced companion bills last year that would give the Office of Renewable Energy Siting and Electric Transmission authority over establishing battery systems. The office could override local decisions on the systems, including moratoriums.

However, the bills have not made it out of committee.