The Latest from the Experts on New York’s Climate Act Implementation

Roger Caiazza

I have published two previous articles about New York Independent System Operator (NYISO) analyses related to New York’s Climate Leadership and Community Protection Act (Climate Act).  This post describes what I believe is an important new analysis of the future of New York’s electric system.

Background

The implementation plan for New York’s Climate Act “Net Zero” target (85% reduction and 15% offset of emissions) by 2050 is underway.  The Climate Action Council has been working to develop plans to implement the Act.  Over the summer of 2021 the New York State Energy Research & Development Authority (NYSERDA) and its consultant Energy + Environmental Economics (E3) prepared an Integration Analysis to “estimate the economy-wide benefits, costs, and GHG emissions reductions associated with pathways that achieve the Climate Act GHG emission limits and carbon neutrality goal”.  Integration Analysis implementation strategies were incorporated into the Draft Scoping Plan when it was released at the end of 2021.  Since the end of the public comment period in early July 2022 the Climate Action Council has been addressing the comments received as part of the development of the Final Scoping Plan that is supposed to provide a guide for the net-zero transition.

Unfortunately, the Climate Action Council has not confronted reliability issues raised by New York agencies responsible for keeping the lights on.  The first post (New York Climate Act: Is Anyone Listening to the Experts?) described the NYISO 2021-2030 Comprehensive Reliability Plan (CRP) report (appendices) released late last year.  The difficulties raised in the report are so large that I raised the question whether any leader in New York was listening to this expert opinion.  The second post (New York Climate Act: What the Experts are Saying Now) highlighted results shown in a draft presentation for the 2021-2040 System & Resource Outlook that all but admitted meeting the net-zero goals of the Climate Act are impossible on the mandated schedule.  This article describes the “For discussion purposes only” draft of the 2021-2040 System & Resource Outlook report described in the previous article.  While there may be minor changes to the document itself, I am comfortable saying that the major findings will not change substantively.

System and Resource Outlook Summary

The Executive Summary makes the point that the Climate Act is driving changes to the generating system, the transmission grid and the demand landscape.  As a result, this “leads to re-thinking how and where electric supply and storage resources evolve, and how to efficiently enable their adoption to achieve energy policy targets”.  The summary goes on to note:

This 2021 – 2040 System & Resource Outlook (the Outlook), conducted by the New York Independent System Operator (NYISO) in collaboration with stakeholders and state agencies, provides a comprehensive overview of potential resource development over the next 20 years in New York and highlights opportunities for transmission investment driven by economics and public policy in New York State. The Outlook together with the NYISO’s 2021-2030 Comprehensive Reliability Plan (CRP) represent the marquee planning reports that provide a full New York power system outlook to stakeholders, developers, and policymakers.

The Outlook examines a wide range of potential future system conditions and enables comparisons between possible pathways to an increasingly greener resource mix. By simulating several different possible future system configurations and forecasting the transmission constraints for each, the NYISO:

  • Projected possible resource mixes that achieve New York’s public policy goals while maintaining grid reliability;
  • Identified regions of New York where renewable or other resources may be unable to generate at their full capability due to transmission constraints;
  • Quantified the extent to which these transmission constraints limit delivery of renewable energy to consumers, and;
  • Identified potential opportunities for transmission investment that may provide economic, policy, and/or operational benefits.

There are many potential paths and combinations of resource and transmission builds to achieving New York’s climate change requirements. As the current power system continues to evolve, evaluating a multitude of expansion scenarios will facilitate identification of common and unique challenges to achieving the electric system mandates New York State has set for 2030 and 2040. A thorough understanding of these challenges will help build a path for investors and policymakers to achieve a greener and reliable future grid efficiently and cost effectively. Through this Outlook several key findings were brought to light:

Four potential futures are evaluated to best understand the challenges ahead. A Baseline Case evaluates a future with little change from today. A Contract Case includes approximately 9,500 MW of renewable capacity procured by the state and evaluates the impact of those projects. Finally, a Policy Case postulates and examines two separate future scenarios that meet New York policy mandates.

Energy planning analyses such as this work normally evaluate different scenarios of the future by comparing them to a business-as-usual scenario.  In this instance the business-as-usual scenario does not include any of New York’s climate initiatives.  On the other hand, Climate Act Draft Scoping Plan analyses were perverted to “prove” the desired conclusion that the benefits were greater than the costs by comparing future scenarios against a reference scenario.  The Integration Analysis used a semantic trick to claim that some de-carbonization costs (such as de-carbonizing transportation costs) necessary to meet Climate Act targets did not have to be included in the comparison scenario because the electric vehicle conversion legislation was already “implemented”.  That approach took legitimate implementation costs out of the projections.  Of course, this also makes comparison of the NYISO work relative to the Draft Scoping Plan problematic.

The second estimate of the future in the Resource Outlook considered only those projects currently under contract:

Through an annual request for proposals, NYSERDA solicits bids from eligible new large-scale renewable resources and procures Renewable Energy Certificates (RECs) and Offshore Renewable Energy Certificates (ORECs) from these facilities. This Outlook included approximately 9,500 MW of new contracted renewable resources, including 4,262 MW of solar, 899 MW of land-based wind, and 4,316 MW of offshore wind. The addition of these resources to the existing system representation provides insights regarding their impact on system performance in the future.

The Outlook report noted the following Key Takeaways for the contracted renewables scenario:

  • The pace of renewable project development is unprecedented and requires an increase in the pace of transmission development. Every incremental advancement towards policy achievement matters on the path to a greener and reliable grid in the future, not just at the critical deadline years such as 2030 and 2040. In general, resource and transmission expansion take many years from development to deployment.
  • Coordination of project additions and retirements is essential to maintaining reliability and achieving policy. Coordination of renewable energy additions, commercialization and development of dispatchable technologies, fossil fuel plant operation, and staged fossil fuel plant deactivations over the next 18 years will be essential to facilitate an orderly transition of the grid.

Many more renewable resources have to be developed to meet the overall Climate Act net-zero goal by 2050 and the interim 2040 goal of “zero-emissions” electricity generation.  The NYISO analysis looked at two Policy Case scenarios that meet those targets:

  • Scenario 1 utilizes industry data and NYISO load forecasts, representing a future with high demand (57,144 MW winter peak and 208,679 GWh energy demand in 2040) and assumes less restrictions in renewable generation buildout options.
  • Scenario 2 utilizes various assumptions consistent with the Climate Action Council Integration Analysis and represents a future with a moderate peak but a higher overall energy demand (42,301 MW winter peak and 235,731 GWh energy demand in 2040).

Both scenarios project a blend of land-based wind, offshore wind, utility-scale solar, behind-the-meter solar, and energy storage will be needed to meet the CLCPA policy mandates through 2035. There are significant differences between these scenarios and the equivalent Draft Scoping Plan mitigation scenarios.  One of the big differences is the magnitude of a new generating resource called “dispatchable emission-free resources” (DEFRs):

These resources represent a proxy technology that will meet the flexibility and emissions-free energy needs of the future system but are not yet mature technologies that are commercially available (some examples include hydrogen, renewable natural gas, and small modular nuclear reactors). As more wind, solar, and storage plants are added to the grid, dispatchable emission-free resources must be added to the system to meet the minimum statewide and locational resource requirements for serving system demand when intermittent generation is unavailable.

The report warns:

Both scenarios include significant DEFR capacity by 2035, but it is important to note that the lead time necessary for development, permitting, and construction of DEFR power plants will require action much sooner if this timeline is to be achieved.

As part of the analysis the NYISO considered what would be needed if the DEFR capacity is not developed. They found that “The exclusion of DEFRs as a new technology option, while enforcing the retirement of fossil generators via the zero-emission by 2040 policy, exhausts the amount of land-based wind built and results in the replacement of 45 GW of DEFR capacity in Scenario 1 with 30 GW of offshore wind and 40 GW of energy storage.”  They also noted that the alternative did not address ancillary service requirements needed for the transmission system.

The Outlook report noted the following Key Takeaways for the Policy Case Scenarios:

  • Significant new resource development will be required to achieve CLCPA energy targets. The total installed generation capacity to meet policy objectives within New York is projected to range between 111 GW and 124 GW by 2040. At least 95 GW of this capacity will consist of new generation projects and/or modifications to existing plants. Even with these additions, New York still may not be sufficient to fully meet CLCPA compliance criteria and maintain the reliable electricity supply on which New York consumers rely. The sheer scale of resources needed to satisfy system reliability and policy requirements within the next 20 years is unprecedented.
  • To achieve an emission-free grid, dispatchable emission-free resources (DEFRs) must be developed and deployed throughout New York. DEFRs that provide sustained on-demand power and system stability will be essential to meeting policy objectives while maintaining a reliable electric grid. While essential to the grid of the future, such DEFR technologies are not commercially viable today. DEFRs will require committed public and private investment in research and development efforts to identify the most efficient and cost-effective technologies with a view towards the development and eventual adoption of commercially viable resources. The development and construction lead times necessary for these technologies may extend beyond policy target dates.
  • As the energy policies in neighboring regions evolve, New York’s imports and exports of energy could vary significantly due to the resulting changes in neighboring grids. New York is fortunate to have strong interconnections with neighboring regions and has enjoyed reliability and economic benefits from such connections. The availability of energy for interchange is predicted to shift fundamentally as policy achievement progresses. Balancing the need to serve demand reliably while achieving New York’s emission-free target will require continuous monitoring and collaboration with our neighboring states.

The important findings in the report led to the following recommendations:

  • Future uncertainty is the only thing certain about the electric power industry. From policy advancements to new dispatchable emissions-free resource technology innovation and ultimate development, the system is set to change at a rapid pace. Situational awareness of system changes and continuous assessment are critical to ensure a reliable and lower-emissions grid for New York. The Economic Planning databases and models will be continually updated with new information and the Outlook study will be improved and performed on a biennial basis.
  • To meet the minimum capacity requirement in 2040, at least 95 GW of new emission-free resources, including approximately 9.5 GW of new renewable resources, will be required to come on-line. Furthermore, to fully achieve the emission-free grid target by 2040, even more resources will likely be needed along with transmission to deliver the clean power to consumers. The scope of the additional renewable resource need is both substantial and unprecedented. Compared to the 2.6 GW capacity entering service in the past five years while New York experienced a net loss of approximately 2.2 GW, the installation rate in the next 20 years must increase significantly to achieve state law climate change requirements. State agencies should consider releasing a more detailed procurement schedule for renewable resources to guide the long-term system planning and provide clarity to the market.

Discussion

I noted earlier that I was comfortable saying that the major findings in this draft report will not change substantively when it is finalized.  I base that mostly on the fact that the NYISO Market Marketing Unit has reviewed the draft.  As part of their market monitoring responsibilities Potomac Electricreviewed the document relative to implications to New York’s de-regulated electric markets.  If you are interested in that particular aspect of electric system planning, I suggest checking out the memo.  For the rest of us, I only note that they state: “The 2021 Outlook is a major improvement to NYISO’s previous planning studies and provides important insights on the potential impacts of state policies on the NYISO system.”

More importantly, what about the Climate Action Council?  Unfortunately, as I pointed out before the Climate Action Council has not confronted reliability issues raised by New York agencies responsible for keeping the lights on.  In a series of meetings over the next couple of months the Council will have to address the Draft Scoping Plan comments made by the NYISO and the New York State Reliability Council that raised reliability concerns.  I hope. without any supporting evidence, that the Integration Analysis team is working with the NYISO planning staff to reconcile the differences between this analysis and theirs.

In the meantime, there are vocal members of the Climate Action Council that deny the existence of any implementation issues associated with a renewable energy resource dependent electric system.  At the May 26, 2022 Climate Action Council meeting Council members described their impressions of comments made at the public hearings.  I have prepared an overview summary of all the comments made during the Update on Public Hearings and Comments agenda item and wrote an article highlighting relevant comments.  In this regard, Paul Shepson Dean, School of Marine and Atmospheric Sciences at Stony Brook University talked about mis-representation at 23:39 of the recording:

Mis-representation I see as on-going.  One of you mentioned the word reliability.  I think the word reliability is very intentionally presented as a way of expressing the improper idea that renewable energy will not be reliable.  I don’t accept that will be the case.  In fact, it cannot be the case for the CLCPA that installation of renewable energy, the conversion to renewable energy, will be unreliable.  It cannot be.

Robert Howarth, Professor, Ecology and Environmental Biology at Cornell (starting at 32:52 of the recording) picked up on that theme.  He said that fear and confusion is based on mis-information but we have information to counter that and help ease the fears.  He stated that he thought reliability is one of those issues: “Clearly one can run a 100% renewable grid with reliability”.   Obviously, these views are at odds with this report.

There is one other point.  In addition to the reliability concerns of the net-zero transition I am very concerned about affordability.  The Draft Scoping Plan has avoided any mention of ratepayer impacts to date.  The NYISO projection methodology can has that information because it is inherent in the models It is a shame that it is not being reported.

Conclusion

This is an important report for New York but I also believe that there are ramifications for other net zero transition programs.  These findings must be reconciled with the Draft Scoping Plan projections for the future generating system.  The leadership of the Climate Action has repeatedly punted the responsibility for a feasibility study down the road as somebody else’s problem. This report highlights multiple feasibility concerns that must be addressed to have any hope of this working.  I believe that it shows that implementation on the schedule proposed will prove impossible.  The report also highlights the need for implementation planning.  Currently there is no plan for siting renewable resources where they are needed for the future system and this shows that it must be done.

With respect to other net-zero transition programs I think the discussion and implications of the dispatchable emissions-free resource are of interest.  The analysis shows that in order to minimize the storage and renewable over-build requirements this resource could be a better choice.   However, the report notes that DEFRs such as hydrogen, renewable natural gas, and small modular nuclear reactors are not commercially viable today. “DEFRs will require committed public and private investment in research and development efforts to identify the most efficient and cost-effective technologies with a view towards the development and eventual adoption of commercially viable resources.”  There is that nasty planning and feasibility is necessary component again.

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Roger Caiazza blogs on New York energy and environmental issues at Pragmatic Environmentalist of New York.  More details on the Climate Leadership & Community Protection Act are available here. This represents his opinion and not the opinion of any of his previous employers or any other company with which he has been associated.

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September 8, 2022 at 08:40AM

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