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Startup NineDot Energy just raised $431 million to build batteries in New York City’s vacant nooks and crannies — an endeavor that will help the metropolis fend off looming electricity shortages.
The debt financing announced Monday will support the Brooklyn firm’s plan to develop 28 battery projects totaling 494 megawatt-hours of energy storage capacity over the next two years. NineDot estimates that’s enough storage to meet the peak energy needs of about 100,000 households.
NineDot is one of several companies deploying ​“community battery systems” — grid-tied energy storage installations that can fit into roughly an acre of land or less — in New York City. These systems sop up excess energy from the grid when power is abundant and send it back when demand is high, like on hot summer afternoons when millions of air conditioners crank up. Bigger batteries may be able to store more energy, but community-scale systems can be more realistic to quickly deploy in über-dense places.
The decade-old startup’s latest round of construction finance, led by Natixis Corporate & Investment Banking, brings its total funding to just over $1 billion, said David Arfin, NineDot’s CEO and co-founder.
NineDot already has seven projects operating — including a 12-megawatt-hour battery and solar installation at a former parking lot in the Bronx and a 20-megawatt-hour battery system in Staten Island — or in advanced stages of construction in New York City, he said. By 2028, it plans to have 37 community storage systems with a combined capacity of 1.6 gigawatt-hours up and running across the five boroughs, he said.
It isn’t easy to find spots to build batteries in New York City, said Adam Cohen, NineDot’s chief technology officer and co-founder. It can be even harder to find space on Con Edison’s power grid to connect them, he said.
But the utility is under mounting pressure to expand its energy storage capacity — and that’s driving companies like NineDot to seek out vacant or underused lots in the country’s densest urban environment.
New York law sets a statewide goal of 70% renewable electricity by 2030, and state policy calls for building 6 gigawatts of energy storage by 2030. Upstate New York has plenty of land for utility-scale wind, solar, and battery farms. But downstate New York and New York City are where power demand is greatest and the generation mix is the dirtiest — and there’s not yet enough transmission grid capacity to solve those problems with clean power from the north, Cohen said.
Meanwhile, the New York City area faces an energy crunch as power demand surges and aging fossil-fueled plants in the boroughs prepare to shutter. In October, the state’s grid operator warned that New York City and Long Island might face ​“reliability violations” as soon as this summer.
Late last year, state regulators ordered Con Edison to seek out ​“a broad array of potential non-emitting solutions” that could quickly bolster reliability.
“You could solve that with new transmission,” Cohen said — except that’s hard to build. The Champlain Hudson Power Express, a major transmission line from Canada to New York City, is nearing completion and scheduled to start delivering hydropower and wind power in May. But another major transmission line being planned to carry power into the city was canceled in 2024.
Another option is ​“keeping dirty peaker plants online,” Cohen said. But the fossil-fueled plants that New York City relies on to serve its peak loads are expensive to operate and emit health-harming air pollutants, largely in low-income communities and communities of color.
That’s why state regulators’ order to Con Edison calls for ​“non-emitting solutions, prioritizing cost-effectiveness and ease of deployment, and minimizing impacts to disadvantaged communities.”
Batteries fit that bill, say proponents of the tech. William Acker, executive director of the New York Battery and Energy Storage Technology Consortium, noted that the utility’s initial report to regulators in January identified a roughly 125-megawatt shortfall for about three hours during peak summer demand starting in 2032. This is ​“well within the range of the energy storage we expect to be deployed,” he said.
“That’s changing how the state is looking at energy storage deployment in New York City,” Acker said. ​“It’s one of the most cost-effective ways to address this reliability challenge.”
New York state has struggled to meet its targets for utility-scale clean energy, with supply chain disruptions and rising interest rates undermining the financial prospects for big wind and solar farms. It’s also faced challenges in getting large-scale battery projects up and running, largely because of problematic contract structures that crimped project financing.
But smaller community battery projects, like NineDot’s, have an advantage on that front: They can access the state’s incentives designed to encourage distributed energy resources that deliver power when and where the grid needs it the most. These incentives offer far steadier and more predictable revenue streams than those set up for the state’s larger-scale utility programs, Arfin said.
Community battery projects are also eligible to feed into New York’s Statewide Solar for All program, which provides a portion of revenues from community solar and storage projects to utility customers in disadvantaged communities who are enrolled in energy-affordability programs. NineDot forecasts that the projects it has committed to Statewide Solar for All will deliver more than $60 million in energy credits over the coming decade.
NineDot’s strategy of putting batteries on vacant or underutilized lots is one of several approaches being taken to add energy storage to the New York City grid. For example, Con Edison has deployed batteries at its substations and worked with companies installing them at EV charging stations and electric school bus depots. And some New York City businesses are using small plug-in batteries to cushion their draw on grid power during hours of peak demand.
Meanwhile, larger-scale projects like 174 Power Global​’s 400-megawatt-hour battery in Queens are starting to get built, and energy developers, including Summit Ridge Energy and Convergent Energy and Power, have community battery projects underway.
But batteries in the Big Apple aren’t always getting a warm reception from their neighbors. Public opposition, spurred by a spate of grid battery fires, has quashed several projects in Staten Island and has led to an ongoing moratorium on their construction in the Long Island town of Oyster Bay. New York City mayoral candidate Curtis Sliwa railed against battery projects in the waning days of his campaign last year, calling them ​“mini-Chernobyls.”
But Cohen noted that the Fire Department of New York has spent years developing grid-battery safety rules that may be the most comprehensive in the country. ​“The FDNY is the global gold standard for approving battery storage technology and sites,” he said. ​“It’s cumbersome — but it’s trusted and thorough.”
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