Lawmakers seek a pause on KCE NY 37
New York state politicians have challenged a large energy storage system (ESS) project being pursued by Key Capture Energy (KCE), the U.S. subsidiary of SK Innovation E&S. Calls to halt construction over fire safety and drinking water contamination concerns have raised the possibility of disruptions to KCE's project schedule.
According to the office of New York State Senator Dean Murray on October 28, Murray and Senator Anthony Palumbo sent a letter to New York Governor Kathy Hochul on October 13, local time, urging a temporary pause on plans to build a large battery energy storage system (BESS) in Manorville, Suffolk County. The project in question is KCE NY 37, a 150 MW, 600 MWh development being pursued by KCE.
NY 37 is a four-hour lithium-ion ESS planned for Manorville in the Town of Brookhaven, Suffolk County, New York. It would occupy four acres, approximately 16,200 square meters, of an industrial site of approximately 13 acres, or 52,600 square meters, on Wicks Avenue, adjacent to a Long Island Power Authority (LIPA) switching station. KCE secured key approvals, including a special permit and site plan approval, from the Town of Brookhaven in 2022 and plans to begin construction in 2028 and start commercial operation in April 2030.
Fire response and drinking water concerns
The two senators called for a halt because they judged that arrangements for responding to lithium-ion battery fires were inadequate and that nearby residents' health and drinking water safety could not be assured. They cited, in particular, the 2023 fire at a 5 MW ESS facility in East Hampton and groundwater contamination subsequently identified there.
The exact cause of that fire has not yet been officially established. Based on its site investigation, the New York State Department of Environmental Conservation (DEC) considered it likely that PFPrA, a perfluorinated compound formed when the Novec 1230 fire suppression agent used to fight the fire reacted with water, was responsible for nearby drinking water contamination. Litigation over environmental and drinking water contamination damage arising from the incident is also underway in the U.S. District Court for the Eastern District of New York.
NextEra Energy, the facility's developer and operator, suspended operations at two ESS facilities in East Hampton and Montauk in early October at the request of local authorities. Suffolk County's government is demanding that operations remain suspended until measures are in place to remove the fire suppression agent and remediate contamination.
In their letter, the senators said, “There are still too many significant unanswered questions about the effects of BESS facilities on the safety and health of nearby residents and on the environment. We are deeply concerned about the state government's plans to build additional facilities on Long Island while these issues remain unresolved.”
They added, “Even more concerning is that the facility proposed for Manorville is 30 times larger than any BESS facility currently operating on Long Island. The project should be halted until there is agreement that firefighters and emergency responders can safely respond to fires and emergencies.”
Local opposition and potential effects on revenue support
Opposition over the safety of ESS facilities is spreading in Suffolk County. Seven towns, including Babylon, Huntington and Islip, have extended moratoriums on the construction of large BESS facilities. In Hauppauge, where KCE proposed a 79 MW ESS, continued opposition from residents previously led the Town of Islip to ban large installations.
The Town of Brookhaven, where NY 37 is located, has not yet imposed a blanket moratorium on ESS construction. However, growing political pressure over safety reviews and improvements to fire response arrangements could affect KCE's subsequent development procedures and construction schedule.
NY 37 is also expected to create difficulties for KCE because it is one of the key ESS projects selected for long-term revenue support by New York state. In September, the New York State Energy Research and Development Authority (NYSERDA) selected eight projects totaling 950 MW, including NY 37 and KCE NY 5, to receive Index Storage Credits (ISC) in its first bulk ESS procurement.
ISC is a mechanism that settles the difference between the strike price submitted by a developer in a tender and a reference price reflecting expected energy and capacity revenue in the New York Independent System Operator (NYISO) market. It supports financing and investment for ESS developers by reducing long-term revenue volatility risk. However, payments begin only after the necessary permits and local approvals have been obtained and commercial operation has started, so project delays could also postpone the point at which KCE receives the revenue it expects.
Original Korean article: theguru.co.kr
English brief by Korea Wind Intelligence, koreawindintel.com
