When it comes to energy storage, New York has barely made inroads.
The Empire State installed less than 100 megawatts of storage last year, bringing the state’s total capacity to just 500 MW as of the end of 2024. By contrast, Texas built 4.7 gigawatts of storage last year alone. California constructed 4.3 GW. In the Southwest, Arizona, Nevada, and Utah deployed a combined 2.5 GW.
But New York’s latest bid for storage this week could vault the state into the big leagues. And the more nascent long-duration storage sector could benefit even more than traditional batteries.
On Monday, Governor Kathy Hochul announced New York’s first bulk procurement for storage, putting out a request for one GW per year over the next three years. The combined 3 GW of projects are expected to come online between 2028 and 2030 as part of the state’s target of 6 GW of storage capacity by the end of this decade.
Albany is expected to pick the winners for the first tranche by the second quarter of 2026, but early applications are due to the New York State Energy Research and Development Authority by September 4.
“Today’s action is another example of New York’s ongoing commitment to strengthening our grid, ensuring the state continues to have a more affordable and reliable electricity system now and well into the future,” Hochul said in a statement on Monday. “Safe and strategic deployment of energy storage will help drive economic development and reduce costs for New Yorkers.”
New York has lagged behind other states in part because of its electricity mix. Variable renewables such as wind and solar made up less than 13% of the state’s generation in April, the most recent month for which the Energy Information Administration has data. Natural gas provided the bulk of the state’s electricity, followed by nuclear power, and hydroelectric stations. As a result, electricity prices don’t swing as dramatically as in states such as Texas and California, where the large amount of solar sends prices plummeting midday when the sun is out and back up at night when the panels stop generating power.
“The way energy storage makes money in a competitive market is charging when power prices are low and discharging when prices are high,” Isshu Kikuma, a New York-based senior associate analyst covering energy storage at the consultancy BloombergNEF, told Latitude Media. “But in New York, the price volatility is quite limited so it’s difficult for energy players to make sufficient returns.”
Those relatively steady prices could make LDES companies the real winners of the bulk procurement. The state subsidies in the deal offer particularly favorable conditions for long-duration storage. While lithium batteries and other storage that operate for less than 8 hours can net contracts for 15 years, technologies that can discharge electricity for longer than that can get deals for 25 years.
“This scheme is very good for long-duration energy storage,” Kikuma said. “These projects can have long-term contracts with New York, and that improves bankability and investment decisions.”
A range of technologies could benefit. Pumped hydro is one. Another is compressed air or carbon dioxide, like the Energy Dome technology Google invested in last week. Zinc battery startups such as Eos Energy Enterprises or e-Zinc, whose products can store electricity far longer than lithium batteries, could also be contenders, Kikuma said.
But many of those LDES technologies have yet to deploy at scale, and come at a premium. With the prices of traditional lithium batteries coming down and the record of performance growing, those short-duration options may still be at an advantage. That’s especially true in competition for the first tranche of New York’s funding set for next year; the price difference between lithium-ion and LDES is likely to shrink eventually, but not quite yet.
The Trump administration’s new restrictions on batteries containing Chinese components are set to come into effect in 2026, so developers competing for the first gigawatt of New York’s storage deal may benefit from bulk-buying batteries that are cheaper now but likely ineligible for federal write-offs after next year. And according to Kikuma, in the short-term there may be ways to skirt around the curbs on batteries containing components from China starting next year, such as stockpiling now or buying equipment from non-sanctioned countries such as South Korea.
“The challenge is obviously that LDES is more expensive and does not necessarily have deployment at scale, so that can be a challenge,” he said. “Battery storage is deployed globally really well and many of the companies in the space are already cost-competent. So it’ll be interesting to see what comes of this.”
