The Climate Leadership and Community Protection Act (Climate Act) has a legal mandate for New York State greenhouse gas emissions to meet the ambitious net-zero goal by 2050. The comment period for the Draft Scoping Plan that outlines how to meet that goal recently ended. Here I describe comments submitted by the New York State Independent System Operator (NYISO).
Everyone wants to do right by the environment to the extent that they can afford to and not be unduly burdened by the effects of environmental policies. I submitted comments on the Plan and have written extensively on implementation of New York’s response to that risk because I believe the ambitions for a zero-emissions economy embodied in the Climate Act outstrip available renewable technology such that this supposed cure will be worse than the disease. The opinions expressed in this post do not reflect the position of any of my previous employers or any other company I have been associated with, these comments are mine alone.
Climate Act Background
The Climate Act establishes a “Net Zero” target (85% reduction and 15% offset of emissions) by 2050. The Climate Action Council is responsible for preparing the Scoping Plan that will “achieve the State’s bold clean energy and climate agenda”. They were assisted by Advisory Panels who developed and presented strategies to the meet the goals to the Council. Those strategies were used to develop the integration analysis prepared by the New York State Energy Research and Development Authority (NYSERDA) and its consultants that tried to quantify the impact of the strategies. That material was used to write a Draft Scoping Plan that was released for public comment at the end of 2021. The Climate Action Council states that it will revise the Draft Scoping Plan based on comments and other expert input in 2022 with the goal to finalize the Scoping Plan by the end of the year.
New York State Independent System Operator
The predecessor organization to the NYISO was created after the Northeast Blackout of 1965. New York’s seven investor-owned utility companies established the New York Power Pool (NYPP), to address the reliability problems exposed by the blackout. In the 1990s New York’s electric system was de-regulated and the Federal Energy Regulatory Commission (FERC) recommended the formation of independent entities to manage energy transmission and generation and the NYISO was established to replace the NYPP. Because the change to the wholesale electricity market is the reason for their existence, the NYISO unquestioningly supports market driven responses to any problem. This is evident in their Draft Scoping Plan comments.
The NYISO manages the electric system. They have to balance the instantaneous supply of electricity between the generators and customers across the state in the de-regulated electricity market. They manage the supply of power and maintain the frequency across the state and with their connections to other operating systems. In addition, the NYISO has to plan for future changes to the system. At this time the biggest factor for change is the Climate Act so their comments are important to understand.
Comments on Draft Scoping Plan Recommendations
The NYISO comments included comments on four aspects of future power generation strategies:
- Fossil Generator Retirements Must Be Coordinated with Replacement Resources,
- Accelerate Growth of Renewable Generation and Other Resources,
- Storage Provides Value and Must Work in Concert with Generation, and
- Interconnection Process Improvements
The NYISO comments emphasized that the drive to retire fossil-fired generating units has to be coordinated with replacements. They explained (their emphasis added) that:
A sufficient fleet of new generation resources that satisfy the CLCPA, with the appropriate reliability attributes, must be available before the existing, traditional generators retire voluntarily or are forced out of service. An essential step to facilitate the orderly transition from traditional generators to emission-free electricity is promulgation of environmental regulations with defined milestones and ample lead time for new resource development. For example, firm regulatory milestones that define emission limits to be achieved on specified dates and compliance plan obligations that require generators to describe their approach to compliance give the NYISO planning processes essential information to consider and share with stakeholders.
NYISO is very concerned that Administration policy appears to build as many renewables as possible and shut down as much fossil infrastructure at the same time without a strategic plan. The comments stated:
Proposing environmental regulations with defined milestones to facilitate the CLCPA mandates would help protect electric system reliability by allowing the existing reliability processes to more accurately review and evaluate reliability needs. The Draft Scoping Plan provides that the DEC should assess regulatory options to reduce emissions from fossil generators to the maximum extent practicable to achieve the requirements of the CLCPA while maintaining electric system reliability. The DEC should examine all potential regulatory options, including new regulations and/or permit requirements or amendment of current regulations and/or permitting requirements, to determine the most efficient, effective, and enforceable format to achieve the determined emissions reduction targets and the CLCPA requirements. The process should include effective mechanisms for input and comments from stakeholders prior to a formal proposal under the State Administrative Procedures Act, similar to the process used in promulgating the DEC “Peaker Rule,” 6 NYCRR Subpart 227-3
The NYISO strongly encourages the DEC and other state agencies to pursue new or amended regulations to implement emissions reductions in an orderly, predictable manner. The process should include effective mechanisms for input and comments from stakeholders prior to a formal proposal. This exact approach proved effective when the DEC developed the Peaker Rule in 2018-2019.
NYISO commented on the pace of accelerated growth of renewable generation and other resources necessary to meet the timeline and targets of the Climate Act.
New resources will be necessary to serve load and provide reliability services in place of the generators that will retire. The Draft Scoping Plan contemplates accelerating the growth of large-scale renewable generation, offshore wind generation, distributed generation, and distributed energy resources. This growth is envisioned, in part, through recommendations that the state accelerate adoption of innovative technologies and programs that increase hosting capacity such as flexible interconnection, hybrid systems, and coupling resources with energy storage or controlled load.
NYISO makes the point that even the Draft Scoping Plan recognizes that wind, solar, and energy storage are inadequate to meet the requirements of a zero emissions electric system in 2040.
The Draft Scoping Plan also correctly observes that dispatchable and emissions-free resources, with operating characteristics similar to fossil generators, will be equally, if not more important, to protect consumers from electric service interruptions. It states:
“The current system is heavily dependent on existing fossil fueled resources to maintain reliability. To ensure reliability and that generation is available when needed, dual fuel capability currently provides oil back up during periods of high gas and electric demand. To replace these units, dispatchable and emissions-free resources will be needed to balance the system and must be significant in capacity, be able to come on-line quickly, and be flexible enough to meet rapid, steep ramping needs. The importance of developing large amounts of dispatchable generation is echoed in the Power Grid Study, Pathways Study, and NYISO Grid-in Transition and Climate Change Study.”
There is an additional complication that is often overlooked outside of the industry. NYISO not only has to figure out how the infrastructure has to be changed to meet the Climate Act requirements they also have to design market mechanisms that will induce the development of the required infrastructure.
The NYISO supports the State’s consideration of how the wholesale markets can work in conjunction with financial incentives, e.g., Clean Dispatch Credits (“CDC”) or a renewable energy credit (“REC”)-like product, to increase the number of new flexible resources interconnecting to the electric grid. Such salable attributes could encourage new technologies that run on storable fuels, as opposed to wind or solar energy. Incentives could also encourage storage resources to possess the capability to charge from the grid, regardless of whether they are coupled with generation or load resources. The option, or technical capability, to charge from the wholesale electric grid improves provision of reliability services by increasing the overall ability of resources to inject or withdraw energy from the grid and lowers overall prices for consumers when the storage resource charges at a lower cost.
The NYISO commented that storage provides value and must work in concert with generation. Their comments stated:
The Draft Scoping Plan observes that a portfolio of energy storage technologies will be needed to support balancing the intermittency of energy production as more weather-dependent renewable energy generation connects to the grid. Existing and newer, long-duration, storage will be needed to maintain reliability as the state approaches 2040. This suite of storage technologies, however, will be needed well before 2040 to reach the State’s energy policy goals.
The comments also provide an explanation why storage requirements are complicated.
While storage is a critical part of the future resource fleet, it is only capable of being part of the solution. The electric system will require electricity production to reliably meet demand across a wide range of conditions, every day of the year. Battery storage resources can help to fill in short term reductions in renewable resources output, but extended periods of low- or zero-renewable resource output will rapidly deplete the short duration storage capabilities of existing battery technologies. The resource fleet must include generators that operate on storable fuels in addition to renewable resources and batteries. At times, renewable resource production may be insufficient to serve other load and to provide the charging capability needed for the large levels of storage expected to enter the system. These circumstances could extend the periods when storage resources are unable to supply energy to serve load. A successful transition requires replacing the reliability contributions of the existing fleet of generation as their performance capabilities will be no less essential in a future grid than they are today.
The concerns about market mechanisms for energy storage devices are also included in the comments:
The NYISO seeks the lowest production costs for consumers. To allow the markets to seek the lowest production cost, all technologies that can support the system needs must be able to participate. The NYISO regularly reviews market rules to accommodate participation of new and emerging resources, such as energy storage resources through market participation. When the capabilities of a particular technology require changes to existing market rules, the NYISO has evolved its markets and its Tariffs to accommodate participation along the lines of the Draft Scoping Plan description of expanding wholesale market eligibility participation rules for new policy resources. For example, in 2020, the NYISO implemented a participation model for energy storage resources (“ESRs”) and, in 2021, the NYISO expanded the participation model to accommodate co-located resources consisting of a combination of storage and other generating technologies, such as wind or solar. The NYISO integrated ESRs as supply resources in both instances, not as providers of transmission service. Although ESRs, like other resources, can be dispatched to prevent an overload of a transmission facility, they do not change the thermal capability of a transmission facility and, therefore, do not change the ratings of transmission facilities. Like other types of suppliers, ESRs can provide dispatchable services to help mitigate transmission constraints and can serve load to meet local reliability needs and defer infrastructure investments.
The electric grid has been described as the world’s largest machine because the generators and users are all connected. The NYISO comments address interconnection process improvements:
To support development of new generation resources, the Draft Scoping Plan recommends that the state speed up the pace of processing interconnection applications and emphasize the need for right-sizing human resources at utilities to mitigate delays in application processing. Interconnection rules that support grid reliability, along with siting and other regulatory processes that facilitate timely review and consideration of projects, are necessary to effectively respond to the rapid growth of projects being developed in response to the state’s clean energy policies. The NYISO is committed to continue working with stakeholders to assess how its processes can be enhanced to better manage the increasing volume of resources while still providing the critical reliability analysis needed.
An underlying premise of the NYISO comments is the insinuation that there are significant logistical issues associated with schedule. The comments describe changes to the process for connecting new generating sources to the grid:
The NYISO’s generation interconnection study process identifies potential adverse reliability impacts associated with new resources interconnecting to FERC jurisdictional distribution and transmission. The process, which requires significant coordination among the NYISO, facility developers, and affected transmission owners, identifies necessary system upgrades and their estimated costs to protect electric system reliability. This allows investors to make more informed investment decisions. To facilitate the dramatically increasing number of interconnection requests, the NYISO has been working with stakeholders to implement improvements to the interconnection study process. NYISO completed a comprehensive redesign of the interconnection study process in 2019. The redesign offers greater flexibility and expedited study options to developers seeking the necessary information to interconnect to the grid. The enhancements have proven effective in accelerating the interconnection study process.
The numbers for new projects are notable:
The improvements were applied for the first time to the Class Year 2019, the largest in the NYISO’s history, with 66 projects representing 7,254 MW of capacity, and helped the NYISO to bring the Class Year process to closure in record time. Since 2019, the number of new interconnection requests has continued to increase, reaching 197 requests per year and 387 projects with ongoing interconnection studies at the end of 2021.
Nonetheless, more changes are needed:
The NYISO continues to review and improve its interconnection process, including a current initiative under discussion with stakeholders regarding improved coordination between the various interconnection processes. In addition, the NYISO anticipates significant additional interconnection process changes will be required in later 2022 and 2023 prompted by FERC’s Notice of Proposed Rulemaking regarding Improvements to Generator Interconnection Procedures and Agreements (Docket No. RM22-14-000). Given the volume of interconnection requests it is imperative to further streamline interconnection processes.
My primary concern is generation but of course the NYISO has to also worry about transmission and distribution strategies for the use of diffuse renewable resources. The NYISO comments described their concerns:
The Draft Scoping Plan recommends that the state expand electricity transmission and distribution systems to support energy delivery, and, building on the Power Grid Study, continue research, development, and demonstration (“RD&D”) and rapid deployment of advanced grid technology. The transmission-focused efforts should strive to alleviate transmission system bottlenecks to allow for better deliverability of renewable energy throughout the state and unbottle constrained resources to allow more hydro and/or wind imports and the ability to reduce system congestion. In addition, the Draft Scoping Plan encourages optimized utilization of existing transmission capacity and rights of way by utilities to accelerate investments in their local systems. These actions will facilitate renewables development and enhance the electrification of transportation and grow safety and resiliency.
The rest of the comments described the planning processes used. I mentioned the NYISO’s unwavering support of market mechanisms to solve any electric system issue. There are descriptions how public policy requirements are addressed with public planning. Similarly, they address economic issues associated with transmission constraints.
Relative to the Climate Act the most important planning process is related to reliability. There is a good summary of the process that they use.
NYISO reliability planning processes evaluate reliability needs that are arising due to a shifting resource mix, as higher-emitting, controllable fossil generators deactivate and new renewable, intermittent generation, and other clean energy supply resources enter service. The NYISO’s reliability processes form a baseline system that identifies transmission and resources expected to enter into service, and transmission that is needed to maintain reliability. Additional transmission infrastructure needed for public policy requirements, like the CLCPA, build on these reliability analyses and solutions.
The NYISO comments seems to be satisfied that the Draft Scoping Plan adequately addresses the NYISO reliability planning process:
The Draft Scoping Plan recommends that the State conduct established biennial evaluations to assess the state of bulk power system reliability in consultation with the NYISO and the New York State Reliability Council. The NYISO supports this recommendation and agrees that ongoing evaluations and transmission system reliability planning are critical to maintaining an energy secure and sustainable system for New York. The NYISO has established processes that should be used to support the Draft Scoping Plan recommendation. The NYISO’s reliability planning processes identify reliability risks and, if found, include actions such as solicitations of transmission and resource solutions needed to maintain reliable electric service. These processes are designed to provide the baseline reliable system on which to build the grid of the future, integrating renewable resources and storage to attain the requirements of state climate change laws. The frequency and structure of these planning studies allow the NYISO and stakeholders to regularly review study assumptions and scenarios based on up-to-date operational experience. Review of the State’s power system performance in conformance with established operations requirements will be critically important throughout the clean energy transition.
The reference for this commitment (footnote 37) is:
Draft Scoping Plan at p. 171 (“Continual Evaluation: The State should conduct established biennial evaluations to assess the state of bulk power system reliability in consultation with the federally designated electric bulk system operator (NYISO) and the State and federally jurisdictional entity the New York State Reliability Council. These evaluations should ascertain if any program adjustments are needed to ensure continued safe and adequate electric service. They should be informed by the review of the State’s power system performance in conformance with established operations requirements and by relevant studies including the NYISO’s Reliability Needs Assessment”).
There are two issues related to this continual evaluation requirement. First and foremost, I believe that this evaluation should be a prerequisite for any implementation regulations. Once the Scoping Plan is complete it is the guideline for the New York’s energy planning but regulations have to be developed to implement the changes. It is inappropriate to start implementing rules if the organization responsible for reliability has reservations about continued safe and adequate electric service. Secondly, I am not privy to the discussions between the NYISO and the Administration and neither are most members of the Climate Action Council. To this point no one on the Council has spoken up to reign in the loudest ideological voices who believe the reductions have to be instituted no matter what, that the intent of the Climate Act is to ban all combustion sources, and that there are no reliability issues related to an electric system that depends upon renewable energy.
The NYISO resource adequacy comments are at odds with the vocal ideologues. The comments emphasize that all options have to be considered at this time:
The Draft Scoping Plan recommends that the State and the NYISO examine all resource adequacy options and continue to improve compensation for resource adequacy contributions. It specifically calls for the state to continue working with the NYISO “on market enhancements that facilitate the resource transition, support investment, minimize costs to consumers, eliminate buyer- side mitigation (BSM) for Climate Act resources, and meet reliability.” The NYISO is continuously evaluating the accuracy and robustness of its underlying resource adequacy models, reliability metrics and probabilistic tools, and updating them to incorporate changing characteristics of the power system and resource fleet. The NYISO welcomes the opportunity to continue working on these efforts with the state and to build on the recent success of the comprehensive mitigation reform effort.
The only concession made by the Climate Action Council to the reliability concerns of the state’s experts and organizations who are responsible for keeping the lights on was a listening session last summer. The NYISO comments summarize the issues:
The combination of solar, wind, and today’s battery storage technologies are not sufficient on their own to provide the services necessary to support reliability on the power grid. The resource adequacy challenge becomes attracting and retaining sufficient resources, including flexible resources, to maintain reliable service. The NYISO-administered energy and ancillary service markets alone do not provide enough revenue to attract sufficient investment to maintain adequate resources for system reliability. Thus, capacity markets provide and will need to continue to provide an additional revenue stream to support adequate investment to maintain the required levels of resource adequacy. As the fleet transforms and new challenges emerge, ongoing efforts will be needed to ensure that together the energy, ancillary service, and capacity market designs continue to support adequate investment.
The final comment I want to mention discusses the markets that are critical to achieving the Climate Act. It is only possible to fully comprehend the magnitude of the challenge of a zero-emissions electric system if you understand the markets described. I have seen no indication that the majority of the Council members have that knowledge.
The NYISO supports reliability primarily through three complementary markets: energy, ancillary services, and capacity. Wholesale electricity markets have successfully delivered efficiency gains on the grid and cleaner energy production, making them an effective platform for reflecting public policy and technological influences efficiently and reliably. In these markets, energy, regulation, and operating reserves are simultaneously procured to meet demand while respecting transmission limits. The NYISO has a proven record of enabling the entry of new technologies into the state’s competitive wholesale electricity markets consistent with state public policy objectives. The NYISO-administered wholesale energy markets are critical to successfully fulfilling the mission and goals of reliability and economic efficiency while also shifting investment risk from ratepayers to asset owners and serving as an effective platform for achieving New York State environmental objectives. As such, the NYISO is actively engaging stakeholders and policymakers in developing plans to meet the future challenges expected to arise from a grid characterized with high levels of energy supply from intermittent renewable and Distributed Energy Resources (“DER”).
It is telling that the NYISO comments had to emphasize the point that it is not good policy for the state to force fossil generator retirements until appropriate replacement generating resources are available. Unfortunately, state agencies are promulgating policies that are not consistent with this obvious point. The NYISO comments state the obvious point that an enormous quantity of renewable resources is going to have to be developed and point out that energy storage will be needed. The comments also point out that dispatchable and emissions-free resources will be needed to balance the system. Unfortunately, the comments do not explain the difficulty and challenge of developing this new resource and the risk of relying on this technology for a future electric system.
Never forget that the Climate Act is all about politics. It is evident that there are reliability concern disconnects between the public face of the Administration, the Climate Action Council scoping plan development, and the NYISO. In order to address the problems raised by the NYISO the Administration is going to have to burst the bubbles of one or more of the pet positions of some of the Climate Act’s fervent supporters and their organizations. The alternative is putting the state’s residents at unacceptable reliability risks.