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This is the first installment in a series of posts diving into the work being done through the Grid of the Future proceeding.
New York’s Pursuit of a More Flexible Grid
The New York State Department of Public Service (DPS) defines grid flexibility as “the grid’s ability to shift either demand or supply to meet bulk power system and/or local distribution needs.” As New York State continues to integrate renewable energy resources, including distributed energy resources, and experience rising power demand from increasing electrification, data center buildout, and manufacturing growth, the electricity grid will face increasing levels of stress. Energy stakeholders can use grid flexibility to improve grid reliability and maintain stability in the face of fluctuating supply and demand.
In January 2025, The Brattle Group released a study prepared for NYSERDA and DPS as part of Phase 1 of the Grid of the Future Proceeding launched in April 2024 by Governor Kathy Hochul. The Grid Flexibility Study assesses the potential for grid flexibility in New York State by 2030 and 2040 by analyzing the current state of grid flexibility, examining how the power system is evolving and associated implications for grid flexibility, and identifying barriers to and solutions for achieving New York State’s full grid flexibility potential.
The Current State of Grid Flexibility in New York
As of the report’s publication, New York State has developed enough demand response (DR) capability to provide over 1.3 GW of flexible capacity during peak system conditions, which amounts to around 4% of 2024 system peak demand. Grid flexibility capacity is derived from utility programs and participation in the NYISO market.
Utility Programs
Conventional, large customer DR programs enable most grid flexibility in New York State, supplemented by residential HVAC load control programs. Large customer DR programs include Commercial System Relief Programs, Distribution Load Relief Programs, and Term-Dynamic/Auto-Dynamic Load Management Programs. These programs are typically open to customers and aggregators able to reduce demand by at least 50 kW when called upon. Residential and Small Commercial Customers can enroll in HVAC load control and time-varying rates – around 5% of eligible residential customers are enrolled in HVAC load control, while around 2% of residential customers are enrolled in time-varying rate programs.
To unlock more grid flexibility, some utilities are running pilots and introducing innovative programs including vehicle-grid integrations and other behind-the-meter solutions (check out this previous Idea Exchange post about O&R collaborating with Sunrun to build a solar-plus-storage VPP).
NYISO Grid Flexibility Programs
DR participates in the NYISO capacity market as well. NYISO has developed several reliability-focused and economic DR programs. Reliability-focused programs consist of resources that must reduce load during reliability events. These include the Special Case Resources program, the Emergency Demand Response Program, and the Targeted Demand Response Program and provide nearly 1.3 GW of DR capability, primarily through participation in the capacity market. Much of this flexible load may also participate in the utility programs and does not add to the overall DR capacity in New York State. NYISO also offers two economic DR programs, the Day-Ahead Demand Response Program and the Demand-Side Ancillary Services program. These programs allow flexible demand-side resources, such as industrial and commercial facilities, to offer load curtailments based on market price signals and effectively increase the amount of supply in the market. These programs provide around 400 MW of DR capability.
Historical Growth and Future Potential
Over the past decade, New York State’s wholesale market DR has remained relatively constant while utility DR capability has grown steadily. If this growth rate persists, the State could achieve 2.7 GW of utility DR by 2040. However, the Grid Flexibility Study forecasts that New York State can achieve over 8 GW of cost-effective grid flexibility potential by 2040.
In the next installment, we will explore how the New York State power system is evolving and what this transformation means for achieving the full grid flexibility potential.
We Want to Hear From You!
Grid flexibility involves all stakeholders in the power industry, and the Idea Exchange aims to spark conversations that can lead to innovation and collaboration between utilities, regulators, market companies, vendors, and innovators.
- What regulatory changes or incentives do you believe are necessary to unlock the full potential of grid flexibility in New York State?
- What barriers do you see as the most significant to achieving New York State’s grid flexibility potential, and how can they be overcome?
- What innovative grid flexibility solutions are you exploring or piloting to address the challenges of rising power demand and renewable energy integration?
- How can your products or services help utilities and grid operators achieve their grid flexibility goals by 2040?
- What has your experience been with existing demand response or grid flexibility programs?