New York City Energy Storage Peaking Turbine Replacement

The biggest air quality issue in New York State is compliance with the National Ambient Air Quality Standard for Ozone. In order to meet that limit the New York State of Department of Environmental Conservation (DEC) proposed regulations earlier this year to lower allowable nitrogen oxide (NOx) emissions from simple cycle and regenerative combustion turbines during the ozone season. The problem is that these turbines are needed to keep the lights on during periods when needed most so replacement is not very simple as I explained in an earlier post.

This post describes the State’s evaluation of the politically correct alternative, energy storage, to provide the power generated by these turbines. This post addresses the report findings for turbines that could be directly replaced by energy storage. I want to emphasize that the following represents my opinion and not the opinion of any of my previous employers or any other company with which I have been associated. I have been following the operational implications of these turbines and their effect on ozone for over 20 years.

Background

The evaluation of using energy storage to replace these peaking units is part of the New York State Energy Storage Roadmap announced by Governor Cuomo in June 2018. As part of that effort the Department of Public Service (DPS) established an Energy Storage Deployment Program. On July 1, 2019, Energy Storage Deployment Program Report – Unit by Unit Peaker Study was submitted to the docket for Case 18‐E‐0130 – In the Matter of Energy Storage Deployment Program. DPS staff, working with New York State Energy Research and Development Authority (NYSERDA), Long Island Power Authority (LIPA), New York Independent System Operator (NYISO), NY Department of Environmental Conservation (DEC), Con Edison, and consulting firm Energy and Environmental Economics, Inc. (E3) prepared the report. The DPS December 12, 2018 Order Establishing Energy Storage Goal and Deployment Policy directed them to develop a unit‐by‐unit operational and emission profile study and methodology to determine which downstate peaking power plant generating units are potential candidates for repowering or replacement. My previous post describes these peaking turbines and more detail on the rationale for replacement so I will not repeat that material here.

The December 2018 DPS Energy Storage Goal and Deployment Policy specified what was to be included in the analysis. It was to “include a series of reliability and operational assessment studies looking at the equivalent level of ‘clean resources’ that could provide the same level of reliability as the existing peaker units. Hybridization and repowering with energy storage, as well as replacement with stand-alone energy storage, should be explicitly examined, according to the Roadmap.”

According to the description in Energy Storage Deployment Program Report – Unit by Unit Peaker Study:

The analysis relies on historical 2013 hourly operational and emissions data for the approximately 4,500 MW of affected peaking units across the state (almost entirely concentrated in New York City, Long Island, and the Lower Hudson Valley) to examine the technical feasibility of energy storage or energy storage paired with solar providing equivalent historical generation of the peaking units. Peaker operational and emissions data from 2013 was chosen because this reflects the peak NYISO demand year, and the correspondingly high levels of peaker operation which occurred in July 2013. This served as a proxy for representing peak‐level system operations, although theoretical peak system operations may impose incremental needs beyond those of 2013. The study did not consider system changes after 2013 that may impact how conventional peaking units and energy storage resources operate in the future, such as retirements of existing units, changes in the overall levels and patterns of demand, new transmission solutions, and/or the addition of more intermittent, renewable energy.

Analysis

I am not a fan of the approach used in this analysis because I think it gives some mis-leading unit specific information. In the first place they considered all turbines as candidates not understanding that the primary purpose of some turbines is not to provide power during high load demand periods. They wasted effort considering the Jamestown Public Utilities turbine in Western New York that runs on the order of half the time. Peaking turbines are defined as units with an “average annual capacity factor of 10.0 percent or less over the past three years”. In addition there are turbines at steam boiler facilities that are necessary for “black start” situations when there is a blackout and the power necessary to start up the boiler is unavailable from the grid. Because that is a very rare instance the units are also run to provide power for peak power periods. In my opinion it would not be cost effective to dedicate energy storage for this application. You could not use it for peak loads because you never know when the grid power won’t be available. In conclusion the report considered units that should not have been included.

According to Table A-1 in the report, there are 3,780 MW of peaking turbines in New York. The report concludes that “Overall, at least 275 MW of peaking units, or around six percent of the total rated capacity of the fleet, are found to be potential candidates for replacement with 6‐hour energy storage sized to the maximum 2013 output of each peaking unit.” That means that a 6-hr energy storage system would be able to replace 7% of the existing peaking turbine capacity. The report goes on to say that “This number increases to over 500 MW when using 8‐hour duration storage”, but that only increases the replacement of existing capacity to 13%.

I don’t disagree with their conclusion that “Energy storage or a combination of energy storage and solar can contribute towards meeting NOx limits for a large number of units”. However there is a long way between “can contribute” and “will actually be an option used”. This is a preliminary scoping study. It notes that the “minimum size storage required to meet the NOx requirements can vary between units of the same facility” but does not recognize that the variation between sister units at a facility does not mean that one unit is more of a candidate than another.  The reality is that affected sources will adopt a facility‐wide strategy to meet the NOx limits and those strategies were not examined in this report.

There are other issues as noted in the Conclusion and Recommendations for Further Study. They note that “A more detailed analysis will be needed to understand the reliability impacts of specific unit replacements, especially as loads and resources change with greater electrification of transport and buildings and higher penetrations of renewables.” Many of these peaking units are in load pockets and changes in the load will drive whether energy storage is viable.

Costs

The report states that “A more detailed and thorough benefit‐cost analysis would need to be performed to understand the true economic viability of the replacement and/or hybridization options presented in this analysis.” Therein lies the biggest issue of energy storage – the cost. For those of us outside of Albany who care about costs a recently released report from the National Renewable Energy Lab (NREL): “2018 U.S. Utility-Scale Photovoltaics-Plus-Energy Storage System Cost Benchmark” provides information that can be used to estimate the costs of the energy storage option.

The NREL study lists costs for durations up to four-hours but the DPS report also includes six-hour and eight-hour durations. Table 3 in the NREL document, Detailed Cost Breakdown for a 60-MW U.S. Li-ion Standalone Storage System with Durations of 0.5–4 Hours, provides the information necessary to extend their projections to those different durations. I fit a linear regression model to describe the relationship between the specific costs and energy storage duration from the NREL table. I use Statgraphics Centurion software from StatPoint Technologies, Inc. to do my statistical analyses because it enables the user to choose the best relationship from 27 different linear regression equations. In this evaluation, in every instance, the reciprocal-X model (Y = a + b/X) statistic was the best choice and every regression had an R-squared coefficient great than 99.9% which indicates a strong relationship and suggests that these estimates are good enough for this analysis.

The NREL analysis includes all the costs for a greenfield energy storage project so I calculated values of retrofit potential costs that exclude the land acquisition costs. I estimate the installed cost for energy to be $343/kWh for an eight-hour battery system, $355/kWh for a six-hour battery system, and $380/kWh for a four-hour battery system.

The table NYC Energy Storage Peaker Replacement Summary lists data from the DPS study and calculated values. Table E1 in the DPS report lists the total nameplate capacity (MW) of peaking units that can potentially be fully replaced with storage to meet the 2025 NOx limits at 100% sizing to each unit’s 2013 peak generation. Note that I did not include the upstate turbine included in the DPS report in this analysis because it is not a peaking turbine. There are 36 MW of peaking unit capacity in New York City and Long Island that can be replaced with four hours of storage, 229 MW that can be replaced with six hours of storage, and 463 MW with eight hours of storage for a total of 728 MW. This is 18% of the 2013 peak load in New York City and on Long Island. Table A estimates the replacement cost estimate using the NREL report numbers and shows that replacing 18% of the load with Li-ion battery storage would cost $1.8 billion.

The cost per ton removed further demonstrates the staggering cost implications. I could not figure out which particular units were candidates for replacement because my analysis of Table B-1 did not result in the same number of units in each category. As a result I could not calculate the unit-specific cost per ton removed. Instead I just used the total emissions from all the sources the report’s Table 3: Peaking Units 2013 Operational Data. Table B shows the costs if all the emissions from all the peaking units came only from the 728 MW that can be replaced by energy storage. The cost to remove a ton of NOx is over $900,000 per ton and cost to remove a ton of CO2 is over $1,000 per ton. In order to put those numbers in perspective consider that the social cost of carbon (the alleged societal cost per ton of CO2 emitted) is currently around $50 by the Obama administration method and less than $5 by the Trump administration.

Conclusion

The report concludes “Overall, the findings suggest that there is an opportunity to consider replacing or hybridizing a substantial portion of the peaking units subject to DEC’s proposed NOx rule with a fleet of storage resources paired with solar. Such an outcome would potentially deliver significant environmental benefits, advance the state’s carbon reduction and clean energy goals, as well as benefit historically disadvantaged populations and communities such as environmental justice areas in line with the goals of the Climate Leadership and Community Protection Act.” However these results show that the cost of energy storage replacement is at least an order of magnitude greater than the cost of carbon’s impacts so this opportunity is not a cost-effective way to advance the state’s carbon reduction and clean energy goals.

It is Worse than I Thought

Last week was very depressing for me because New York State decided to jump the shark and go for the “the most comprehensive climate legislation in the nation”. I wrote about that and the obvious disconnect between reality and the ambitions of the legislation in a post published on Watts Up With That. Originally it was the Climate and Community Protection Act but now it is the Climate Leadership and Community Protection Act because, after all, in order to signal your virtue it is best to be the leader.

Since then three blog posts have come to my attention that lay out my problem with climate change issues very well. I believe that there are two questions about addressing climate change: should we do something and what should we do? Two posts address those questions and the third discusses the over-arching problem of public perception.

Larry Kummer, at the Fabius Maximus website, published “Listening to climate doomsters makes our situation worse” which addresses the question whether we should do something. He concludes, and I agree, that we should not ignore it but we should also not focus on it to the extent that other, and in my opinion more likely, serious threats are ignored or not given enough resources because of the alleged existential threat of climate change. Mr. Kummer points out that the news today ignores the Intergovernmental Panel on Climate Change (IPCC) which is supposed to be the ultimate scientific authority on this issue apparently because their story is not scary enough. He points out that there is long list of failed predictions which suggests that the climate change predictions may also turn out poorly. Finally he lists historical examples of imminent doom scares that failed to end life as we knew it. This post is a great reference for the pragmatic side of whether we should do something.

Francis Menton, at the Manhattan Contrarian website, published “The Wall Street Journal embarrasses itself on the economics of 100% intermittent renewable energy” that addresses the “what should we do?” aspect of climate change. He takes issue with the story line that wind and solar power costs are falling so much that they are now the cheapest form of electricity power generation.   Mr. Menton explains that the problem is intermittency. At some penetration level wind and solar have to have energy storage backup. As soon as that cost is included wind and solar becomes markedly more expensive. The basis for that conclusion is an hour-by-hour generation and load comparison. He references several analyses that show how much storage is necessary and I know from conversations with people at the New York Independent System Operator that a similar problem exists in New York. Quite simply solar generation peaks in the summer and wind generation peaks in the spring and fall. Trying to develop a 100% wind and solar system that can cover the winter peak will be extraordinarily expensive because you must have storage over the seasons. He concludes with a chart that compares electricity costs and renewable installed capacity that shows a clear correlation to higher prices with more renewables.

Finally, Kip Hansen at Watts Up with That opines about “A national narrative for media on climate change”. He documents what I have been beginning to suspect – there is an organized movement among American journalists to have a common story about an inevitable, imminent climate threat. Somehow my cell phone got onto a google news feed that never fails to deliver a daily story of a disaster connected to climate change. It seemed odd that every media outlet had similar stories. Mr. Hansen explains that newspapers like the New York Times have editorial narratives to match stories to a pre-designated storyline. The national narrative is “Transforming the media’s coverage of the climate crisis” which claims that climate is a crisis, climate is the “biggest story of our time” and suggested that journalists warn that “humanity has a mere 12 years to radically slash greenhouse-gas emissions or face a calamitous future in which hundreds of millions of people worldwide would go hungry or homeless or worse.”  All this is supposed to culminate in a focused week of climate coverage in September just before a United Nations summit in New York City. He describes this all as ideological sabotage of the American mind and asks that skeptics “explain the complexity of the wicked problem called Earth’s Climate and the current controversies surrounding the issues involved” in every venue possible.

If not were for the fact that my state has swallowed this existential threat nonsense whole I would not be so worried. It is bad enough that New York has ignored the real science and has swallowed the nonsense that eliminating fossil fuel use can be done easily and cheaply but at least the legislation includes a provision to do an evaluation. Hopefully there will be some rigor involved with that analysis and the truth will come out. Ultimately the problem is that while these attempts in the United States will fall apart just like other places where they have been tried the economic damage will be immense. In the meantime maybe I should invest in yellow vest futures.

New Jersey Re-Joins RGGI

On June 17, 2019 New Jersey rejoined the Regional Greenhouse Gas Initiative (RGGI). If there ever was any doubt that participation in RGGI is primarily politically motivated this should clear that up. It is another in a series of posts on RGGI that discusses how RGGI has fared so far. In particular this post compares New Jersey’s issues with RGGI under the previous administration and notes that with a new administration the state joined without getting them resolved.

I have been involved in the RGGI program process since its inception. Before retirement from a non-regulated generating company, I was actively analyzing air quality regulations that could affect company operations and was responsible for the emissions data used for compliance. Because RGGI does not respond to critical comments and rebut concerns raised by stakeholders critical stakeholder comments have dropped off significantly. Nonetheless I have commented on the rules personally if for no other reason to be on the record. In this instance the New Jersey Department of Environmental Protection submitted comments for the record that should be publicized. 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.

New Jersey Comments on the 2017 RGGI Program Review

After the September 25, 2017 RGGI posted program review stakeholder comments and the New Jersey Department of Environmental Protection submitted comments. I will discuss a few of their comments.

The program review proposed to amend and extend a revised RGGI program out to 2030, with a goal of cutting CO2 emissions an additional 30% between 2020 and 2031.  The New Jersey comments pointed out that the cost of RGGI allowances under the new proposal may rise by a factor of 8 by 2030. Nothing changed when the plan was implemented,

Their review suggested that “the proposed RGGI program could result in significant increases in electricity rates for any participating RGGI state”. Quite rightly they pointed out that while energy efficiency (EE) can reduce the total amount spent on electricity and can offset increases in electric rates, there is a point where returns on EE investments diminish. RGGI never acknowledged that and they simply suggested that as more money is spent on EE, the savings will continue to rise proportionately.

The New Jersey comments asked RGGI to acknowledge and evaluate the impacts on individuals and businesses that will see increases in energy rates and little to no reductions in energy use. For those who have already invested in EE there is little opportunity for further reductions and they will have to bear the full increase in cost. This comment was ignored.

New Jersey noted that participating RGGI states already have some of the highest retail electricity rates in the nation, with six of the nine states in the top ten, and increased energy costs should be of major concern. If increased electric rates drive business and industry to other states or nations with less costly and more polluting electric power production, net increases in CO2 emissions would result, to the detriment of the environment as well as the local RGGI economies that have suffered the loss of business and industry. The proposed 8-fold increase in RGGI allowance costs will increase the difference in electric rates between RGGI and PJM states, causing a greater shift of electric production to PJM states. This is known as “Leakage”. RGGI did not address this in the final rule and this may result in a net global increase in CO2 emissions, even if the participating RGGI states reduce their own mass emissions.

These NJ comments show the downside if New Jersey were to join RGGI.

NJ spends the 2nd highest amount in the USA (after CA) and highest in the eastern USA on RPS compliance in 2016 (7.5% RPS costs vs 1.6% average for other states with RPS) with Massachusetts close behind. (Source: U.S. Renewables Portfolio Standards, 2017 Annual Status Report, Lawrence Berkeley National Laboratory, July 2017).  The 7.5 % of NJ electric bill that is dedicated to renewable energy and energy efficiency is high relative to the average state in the USA. Not further increasing the electric rates significantly is important in states like NJ that already have major EE and RE programs.

The New Jersey Board of Public Utility’s (BPU’s) energy efficiency program and Renewable Portfolio Standard (RPS) are well funded and effective. If NJ funded energy efficiency with RGGI allowance revenue, this would result in greater increases in the cost of wholesale power since the RGGI allowance value would be bid into the electricity markets. For every $1 in allowance revenue from RGGI NJ ratepayers would pay up to about $2 in increased electric costs. For every $1 invested in energy efficiency and renewable energy in NJ, the NJ ratepayers now pay about $1.

The societal benefit charge (SBC) which is used to fund energy efficiency in New Jersey, is placed on the retail use of electricity, not the wholesale production of electricity. Therefore, it has no direct effect on the wholesale price of electricity and does not cause a shift of electric production from clean NGCC units in NJ to much higher emitting coal units in non RGGI PJM states. While increasing retail electric rates, the SBC can also indirectly reduce wholesale electric rates because the energy efficiency financed by the SBC reduces the demand for electricity. That reduction in the demand for electricity reduces emissions of air pollutants. The reduction in wholesale prices of electricity may offset the price of the SBC.

The use of all SBC funds in NJ contributes to NJ’s economy. SBC funds do not flow to other states. Revenue amounts raised by the SBC and the effect on electric rates are predictable and certain compared to the revenue raised by selling RGGI allowances at an uncertain auction price. A dollar of ratepayer expenditure under the SBC results in a dollar of benefit to the NJ ratepayers. About half the ratepayer increase caused by RGGI would benefit the nuclear power industry.

Conclusion

In my opinion the New Jersey comments correctly identified several issues that were ignored when the final rule was promulgated. Moreover they also included comments that were good reasons for New Jersey to not join RGGI. As soon as there was a new administration these concerns were dismissed. Not because they were addressed or new analyses showed the problems were irrelevant.   They were dismissed because they were inconvenient.

National Grid Northeast 80 x 50 Pathway Forum

According to their press release on June 15, 2018 “National Grid, one of the nation’s largest investor-owned utilities, released the “Northeast 80×50 Pathway,” a blueprint for drastically reducing greenhouse gas emissions 80 percent below 1990 levels by 2050 (“80×50”). The Pathway is the first of its kind in the Northeast.” This post is about the Pathway Forum on May 13, 2019 in Albany, NY.

Cutting to the chase, this forum was the public face of National Grid’s long-term business plan: electrify everything and be a white hat champion for once. Throw in public support by a corporation for New York’s ambitious clean energy plans to get political support and what is not to like for National Grid. This post will describe the agenda and then present my take on the discussions for the sessions I attended.

I attended the meeting because I wanted to be sure that there was at least one ratepayer from National Grid service territory that did not have a vested interest in the proposed energy system transformation. Most ratepayers do not have any idea how far reaching, how risky and how expensive this plan could be. I had hoped to be able to make a statement to that effect but there was no opportunity. I have been following clean energy initiatives since I retired. Before retirement from a non-regulated generating company, I was actively analyzing air quality regulations like this that could affect company operations. 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.

Agenda

The agenda included an opening session with a Welcome Address by John Bruckner, President, National Grid New York and the “80×50 Keynote” by Rudolph Wynter – President & Chief Operating Officer, Transmission, Generation, Energy Procurement, and Capital Delivery, National Grid.

The first panel discussion was “Future of Transportation”. This panel focused on “the transportation challenge, what progress is underway and what remains to be done to achieve a deeply decarbonized transportation sector”. The moderator was a high-ranking National Grid manager and included three panelists: Adam Ruder – Program Manager, Clean Transportation, NYSERDA; Joseph Kruger – Director of Research and Strategy, Georgetown Climate Center; and Nick Nigro – Founder, Atlas Public Policy.

Panel 2 was entitled “Future of Heat” and focused on “the heating challenge, what progress is underway and what remains to be done to achieve a deeply decarbonized heating sector”. Another high-ranking manager from National Grid was the moderator. Panelists included William Jorgenson – Co-Founder and Counselor, Vanguard Renewables; Donovan Gordon – Director, Clean Heating and Cooling, NYSERDA; Howard Merson – Business Development Manager, Vermont Energy Investment Corporation; and Sharon Tomkins – Vice President, Customer Solutions and Strategy, Southern California Gas Company.

After a luncheon and lunch address by Alicia Barton, President and CEO of the New York State Energy Research and Development Authority the third panel discussion was “Customer Views on 80×50”.

This panel invited “a range of perspectives on the role of customers in achieving a deeply decarbonized energy system”. Another high ranking National Grid officer moderated a panel that included Richard Berkeley – Executive Director, Public Utility Law Project of New York; Dr. Debabrata Mukherjee – President and CEO, Finch Paper; Michael Mager – Partner, Couch White, LLP; and Matthew Enstice, President and CEO, Buffalo Niagara Medical Center.

The last panel discussion was to convene at 3:45PM and by that point I had enough of the meeting, presumed the last panel would not provide any new insights, and faced with a couple of hour drive, I left for home. Panel 4: Fireside Chat on the Future of Policy & Regulation was to hear from “policy thought leaders to react to what they’ve heard during the Forum, step forward and engage on the 80×50 challenge, and issue calls to stakeholders for specific actions/support”. Another high ranking manager from National Grid moderated the session with the following panelists: Dr. Kristina Johnson – Chancellor, State University of New York; Kevin Parker – Senator, New York Senate District 21; Ke Wei – Assistant Director for Infrastructure, New York City Mayor’s Office of Recovery & Resiliency, Office of Sustainability; and Elizabeth Brooke Stein – Senior Manager, New York Clean Energy Lay and Policy, Environmental Defense Fund. The meeting was to end with concluding thoughts from John Bruckner.

Impressions

Overall this was a well-staged dog and pony show. This elaborate forum was intended to further the cause that electrification wherever and whenever possible is necessary and that National Grid is just the company to do it. Attendees were all connected into the New York State clean energy agenda and most had a vested interest in its programs. I do not think that there is any question that the vast majority of consumers were unaware of the forum or of National Grid’s grand plan.

The panelists were picked to further the cause, not elicit thought. The panel for “Future of Transportation” exemplifies this approach. All three panelists are completely vested in transportation electrification. The Program Manager, Clean Transportation, NYSERDA certainly could not stray from the party line of Governor Cuomo. The Director of Research and Strategy from the Georgetown Climate Center represents the organization that facilitates the Transportation Climate Initiative. Nick Nigro is the Founder of Atlas Public Policy whose mission is to “equip businesses and policymakers to make strategic, informed decisions through the greater use of technology that aggregates publicly available information. Atlas arms our audience with the information necessary to encourage the use of new technologies and products along with changes in consumer behavior”. That sounds an awful lot like the consultants in Dilbert who will provide whatever answer they think any client with money wants to hear.

My take-away impression is that these three panelists actually think the only reason electric vehicles are not run away successes is because the auto industry is not marketing them well. I can assure the reader that most of my friends are not in the market for an electric vehicle because they know their short-comings are not consistent with their life style. Although the panelists acknowledged range anxiety was an issue they apparently believe the advantages of electric vehicles outweigh that consideration. Despite Mr. Nigro’s BS in electrical and computer engineering he claimed that bus electrification is a “no brainer”. I have talked about bus electrification with a public transit expert and he is not so enamored. For starters he mentioned that electric buses cost twice as much. He gave me a long explanation about the transmission resources necessary to re-charge several hundred buses and another long description of other implementation issues. To his credit Mr. Ruder from NYSERDA did concede that heating electric buses was an issue.

Another recurring theme in this panel discussion was all the money available from the VW settlement. Mr. Nigro said the settlement resources were “huge”. According to DEC this money will cover a variety of projects including a statewide replacement for 100 or more all-electric transit buses. I found a reference that said that there were 44,000 publicly owned buses in New York in 2011. Huge or not the settlement is not going to have much of an impact on rolling over the bus fleets to electric.

The “Future of Heat” panel was interesting. I was worried that National Grid would be advocating air source heat pumps but I was pleasantly surprised that their angle is for renewable natural gas. For example, Vanguard Renewables is a company that specializes in dairy farm anaerobic digesters that produce methane that can be put into the existing natural gas network. National Grid enticed Sharon Tomkins to come from Southern California to play up the renewable gas angle. Her company is exploring a process to combine hydrogen and water to create methane.   Given that these approaches address dispatchability and storage concerns it makes sense to me to explore them. However, I doubt that the “no new fossil fuel infrastructure” crowd will accept that approach because renewable gas is a gateway to fracked gas.

The NYSERDA Director, Clean Heating and Cooling talked up ground-source heat pumps. NYSERDA has a $26.5 million dollar rebate program for this technology. The rebate is available on a first-come, first-served basis for large systems and small systems. Small systems installed in single family residences and use 10 or less tons of cooling capacity are eligible for rebates of $1,500 per ton of cooling capacity. Assuming six tons per home that is a $9,000 rebate for each home. If the entire $26.5 million is used for small systems in new homes that will be enough for just under 3,000 homes. According to new home source dot com New York has a “huge real estate market with 8,077 new homes for sale”. Unfortunately the NYSERDA rebates will only be enough for around 36% of those new homes.

The panel on “Customer Views on 80×50” was interesting and was as close as anything in the forum to a reality slap to National Grid. Richard Berkeley from the Public Utility Law Project of New York and Michael Mager, a Partner in the Couch White law firm, both represent consumers and had the same concern: no one has given them the costs of their plans for the reductions proposed. Both pointed out that costs could make or break their support for it. The President and CEO of the Buffalo Niagara Medical Center apparently was asked to come to the meeting for appearance sake because I did not get the impression that he was aware of the possibilities and pitfalls of the clean energy options being discussed.

The final speaker, Dr. Debabrata Mukherjee, President and CEO of Finch Paper explained how his company has been trying to do the right thing. They use renewable energy as much as possible and they have extensive energy efficiency programs but they compete in an international market so there is a limit to how much they can afford to do and remain in business in New York. When asked what his company needed he said the one thing they could use to reduce costs was to have a firm supply of natural gas in the winter when they have to have it. I was sitting at a table with people who I have never seen before but it did not take long to figure out that they were all advocates for anything but fossil fuels. When Dr. Mukherjee explained his need for fossil fuel there was palpable indignation at the table that he could possibly think that additional fossil fuel infrastructure was necessary. I think that they thought there was another option. Frankly I came real close to lecturing them that the most likely alternative option is to shut down and move elsewhere. Here is a company doing everything they can to meet the standards of New York State and it is not enough for these people. I really think they want to shut down everything and make the state a park.

Conclusion

My ultimate problem for this effort is energy innumeracy epitomized by the naïve belief that the conversion to a fossil free society will be easy and cheap. This disconnect from reality is constantly repeated by the advocates and crony capitalists, publicized by a complicit media and cheered by progressive politicians.

National Grid came out with their 80×50 policy last year. That is so old news now with advocates arguing not only for a 100% reduction but now they want an even sooner deadline. As a result, I don’t think this plan is enough to satisfy Governor Cuomo’s ambitions or the environmental advocates who attend these conferences. Although National Grid may hate to admit it, the reality is that they know that their 80×50 goal is going to lead to consumer pain but I think they believe they can hide behind the virtue signaling from the rabid advocates and politicians catering to that base when the bills come due. The reality is more likely that those supporters will turn on them and say if only they had done the plan right and if only they had committed to even more reductions then it would have worked without excessive costs.

The fact is that these clean energy goals are doomed to failure simply because of physics. It is all about the energy density needed to run a modern society. Fossil fuels are difficult to replace because wind, solar and batteries have nowhere near the energy density necessary. Moreover, renewable solar and wind projects cannot provide required electric system stability needs associated with voltage, frequency and synchronization control, regulating margin needed for rapid load changes, load ramping capabilities needed for large grid operation nor can they provide spinning and standby reserves for unexpected load changes. Only dispatchable and reliable fossil and hydro plants can provide all these functions while nuclear can provide some aspects of these requirements. Energy storage batteries can also provide some of these requirements but those costs are rarely included by advocates of “clean and green” energy. Wind and solar resources can be integrated into the existing system easily up to some point but the 80% reduction goal will undoubtedly exceed the threshold where electric system stability needs must be addressed. Absent a magical solution the 100% goal is a major technological challenge and will be very expensive because as the control efficiency increases the control cost per unit of reduction increases exponentially.

One last observation. In my opinion, a major problem with the electric industry in New York today is ownership by absentee landlords. For example, National Grid is based in London and its management is no longer connected in any real sort of way with its customers. In the old days management lived locally and corporate actions affected family, friends and neighbors. When there was a problem managers were personally affected and responded quickly. That certainly is no longer the case. Couple that detachment with a New York Administration that has intimidated not only all the state agencies but most of the businesses in the state to further the political agenda of the Governor at the expense of all other considerations and National Grid’s plan is simply going with the flow. I do not believe that they are not unaware of the technological and cost implications of their plan but because they are not members of the community they don’t care.

National Grid Northeast 80 by 50 Pathway Overview

According to their press release on June 15, 2018 “National Grid, one of the nation’s largest investor-owned utilities, released the “Northeast 80×50 Pathway,” a blueprint for drastically reducing greenhouse gas emissions 80 percent below 1990 levels by 2050 (“80×50”). The Pathway is the first of its kind in the Northeast.” This post is an overview of the pathway.

National Grid is a business and they have the opportunity to parlay corporate goals into a package that they hope to use to get political and public support. However, their business goals are not necessarily compatible with the best interests of the majority of their rate payers. In this post I summarize this effort so that other National Grid ratepayers will understand what is involved.

I have been following clean energy initiatives since I retired and because I am a National Grid ratepayer this personally affects me. Most ratepayers do not have any idea how far reaching, how risky and how expensive this plan could be and I hope posts on this topic will educate them.   Before retirement from a non-regulated generating company, I was actively analyzing air quality regulations like this so I have the background to interpret the plan. 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.

Summary

According to the summary of the report:

This paper presents National Grid’s integrated blueprint for New York and New England to reduce greenhouse gas emissions deeply below 1990 levels while supporting economic growth and maintaining affordability and customer choice. Our approach combines several mutually-reinforcing strategies that together provide a clear pathway to significant emissions reductions and signal a paradigm shift in the way we all relate to energy. National Grid is keen to achieve greater collaboration within the Northeast on this pressing and critical issue.

The Pathway calls for three big shifts in our energy systems by 2030:

    • Accelerating the zero-carbon electricity transition, by ramping up renewable electricity deployment to achieve 67% zero-carbon electricity supply;
    • A transformation of the transport sector, by reaching more than 10 million electric vehicles on Northeast roads (roughly 50% of all vehicles); and
    • A transformation of the heat sector, by doubling the rate of efficiency retrofits and converting nearly all of the region’s 5 million oil-heated buildings to electric heat pumps or natural gas.

I will address these three items separately in more detail in later posts.

The Pathway is pretty sketchy on details. For example consider how the Pathway says it will guide the transformations:

The Pathway proposes three overarching principles: target the highest emitting fuels and sectors first; optimize the utilization of existing networks; and avoid price shocks through strategic use of electricity and natural gas use. Building on these principles, this paper lays out the analytical basis for the Pathway and proposes policy and regulatory approaches to help the region achieve its emissions targets reliably and affordably.

Given the relatively clean electricity in the region, the Pathway’s first principle is to target emissions reductions in the transportation and buildings sectors. It notes that this will require not only continuing to reduce coal and oil use for power, but also dramatically reducing our reliance on petroleum fuels in the transportation and building sectors. Not surprisingly, that solution calls for more electrical use and National Grid graciously has offered to provide that power.

The second principle is to “optimize the utilization of existing networks”. I read that to mean, not surprisingly, use National Grid’s transmission and distribution network. I am sure they will be very happy to provide.

Finally, the third principle proposes to avoid price shocks by using electricity and natural gas that National Grid provides. That they even mention the possibility of price shocks should be a heads up. The Pathway has “good” news:

The good news is that, driven by zero-carbon electricity and the large-scale switch to cleaner transportation and heating fuels, the Pathway envisions dramatically reduced emissions while also saving money for customers. From a customer point of view, any cost increases on the electric or natural gas bill would be offset by reduced expenditures on petroleum products (see Table 1). Additionally, the cost of new electricity generation is largely offset by new demand from the transportation and heating sectors, keeping the transition affordable.

There is no justification for the claim that spending less on petroleum products will offset cost increases on the electric or natural gas bill but at least I can understand the logic. How the transition will be affordable by offsetting the cost of new electricity generation with demand from electrifying transportation and heating sectors makes no sense to me. For starters consumers will have to buy new cars and new heating systems and particularly for transportation, infrastructure will have to be purchased. If I buy an electric vehicle I will need a home charging system and charging systems will have to be set up if electric vehicles are to be used for longer trips. All that costs money.

In my opinion National Grid had hoped that this plan would garner support from the environmental advocates who want greenhouse gas emission reductions. However, the Pathway notes that natural gas will continue to play an important role as a reliable fuel source for heat and electricity generation. Based on the numbers I agree completely. However, there are many environmental advocates who now argue against any new fossil fuel infrastructure. I don’t think those folks can be appeased by the rest of this simply because they are all in for no greenhouse gas emissions as soon as possible.

New York Green New Deal – What’s the Plan?

My biggest problem with Governor Andrew M. Cuomo’s Green New Deal proposal to achieve 70 percent renewable energy by 2030 and transition the state to a carbon-free power grid by 2040 is the lack of a feasibility study that shows just what will be necessary to achieve those goals. Once that is available then and only then will citizens of New York get an idea what he has signed us up for financially.

Instead of that analysis he announces integration and implementation projects. On May 30, 2019 Cuomo announced that $5 million is available for projects that will help New York integrate renewable energy resources in ways that will “improve the resiliency of the electric grid”. This program complements the $30 million announced last month by Governor Cuomo to “support the development and improvement of technologies, including automation and transmission renewable energy resources”.

The mission statement of the New York State Energy Research and Development Authority (NYSERDA) is to “Advance innovative energy solutions in ways that improve New York’s economy and environment”. NYSERDA was created as a public benefit corporation in 1975. In 1996 the New York State Public Service Commission approved the ratepayer-supported System Benefits Charge Program and designated NYSERDA as the program’s administrator. The SBC is collected by investor-owned utilities from gas and electric customers in the State, and funds the majority of NYSERDA’s programs. The Public Service Commission also established in 1998 the scope of NYSERDA was expanded as New York State moved to a competitive electric utility industry.

When the electric utility industry was regulated with vertically integrated utilities New York State required a research set-aside for public benefit research and development, energy services, and environmental programs. The State provided oversight for that research and development, industry developed a world-class research program and there was a spirit of cooperation between industry and regulatory agencies but more importantly there was a check to balance against political interference. That has all changed now and NYSERDA, like every state agency in the Andrew M Cuomo micro-management era, is now a pawn to further his political agenda and that agenda now is “New York is leading by example in the fight against climate change, and modernizing our electric grid is a critical component of our path to clean energy and carbon neutrality”. Ultimately the problem is that the professional staff at the agency no longer makes decisions about future programs. Instead it is all about the political calculus of appearance for the political agenda.

However noble that agenda is the fact of the matter is that his vision for a modern electric grid has never been implemented on the scale he proposes. I don’t think it is asking too much for an analysis that shows how many clean energy resources will be required to achieve that vision. In particular I advocate that NYSERDA should do an analysis of renewable energy resources in New York State that compares observed load requirements with the solar and wind resources potentially available.

The Minnesota Solar Potential Analysis Report would be a great template to follow. A recent blog post at the Conversation summarizes the analysis that determined the “least costly combination of grid-connected solar, wind and storage necessary to provide round-the-clock, year-round energy services”.

This is exactly the kind of research that I believe is necessary in New York. We need to know what will be needed and, because this is all new, I believe we need to consider alternative approaches. For example, the key finding in this analysis was that overbuilding solar photovoltaic power and proactive curtailment was the least cost alternative, in no small part because energy storage is so expensive. I agree that the concept that simply assuming that the renewable resource output should match the observed power needed won’t work. However, the amount of overbuilding, the resulting curtailment and the impact on the energy market certainly should be a topic for debate because of competing interests in the market. Until New York State provides some kind of plan that debate cannot even begin.

The Minnesota Solar Potential Analysis Report concluded that Minnesota could achieve its goal of 10% solar by 2025 at costs comparable to the cost of natural gas generation and that the expected cost declines of solar, wind, and storage will enable Minnesota to achieve 70% solar and wind by 2050 with generation costs comparable to natural gas generation costs. With respect to New York the key point is that these goals are less ambitious than New York’s and as the control efficiency increases the control cost per unit of reduction increases exponentially. Consequently the same sort of analysis has to be done with the New York goals to determine whether we can afford to go as far as proposed.

While I agree with the general approach of this research I do have some reservations. The report acknowledges the issue of grid integration costs but it is not clear to me that they are included relative to the cost comparison with natural gas. While the report claims to eliminate the issue of intermittency I think there might be more involved. It is not just covering the unavailability of wind or sun there also is an impact to the grid when wind and solar vary dramatically in short periods. I think that problem can be handled but the question is whether the analysis included that cost too. One other technical issue I would like to see addressed if this kind of analysis was done in New York is the source of the solar irradiance data. The Minnesota study used 10km grid cell satellite data. I would prefer to use actual on-site data observed from the New York State Mesonet because the on-site data has more temporal resolution and I think that is an important factor to consider.

I would like to summarize where I think we are in New York State[1]. We’re choosing between as yet undefined but surely expensive options trying to understand which one (or what mix) will be the least expensive. Unfortunately we don’t know but we need to start now because we’ve been told by Governor Cuomo that we have to make reductions by 2030. If we make a good pick then we’ll spend the least amount of a lot of money and will be left with the fewest negative outcomes, but if we get it wrong we will be left with many more negative outcomes and even higher costs for a long time. Clearly the first step and priority for this effort should be a plan.

[1] I have paraphrased this language from the Behind the Executive Summary and Reality vs Dreams post from the highly recommended Science of Doom Renewable Energy posts.

Pragmatic Take on the Climate and Community Protection Act

I blog on pragmatic environmentalism because I am convinced that it is necessary to balance environmental impacts and public policy. This means that evidence-based environmental risks and benefits (both environmental and otherwise) of issues need to be considered. I have developed a set of principles that under lie my concerns. New York’s Climate and Community Protection Act exemplifies the opposite of a pragmatic approach to the problem of climate change. This post references my pragmatic environmentalist principles to explain my concerns.

In the 2019-2020 regular legislative sessions the New York State (NYS) legislature is debating the Climate and Community Protection Act (CCPA). The fundamental problem with this legislation is that it calls for a statewide greenhouse gas emissions limit of 0% of 1990 emissions in 2050.

One of my biggest problems with the CCPA is that the legislation sets its goal before it requires a scoping plan explaining how this will be done and how much it will cost. In almost all environmental issues there are two sides. Pragmatic environmentalism is all about balancing the risks and benefits of the two sides of the issue. In order to do that you have to show your work before you implement the policy and clearly this is not the case with the CCPA.

The rationale for the CCPA trots out many extreme weather events attributed to climate change. These brief sound bite descriptions only tell one side of the story. As a result they frequently are misleading, are not nuanced, or flat out wrong. The level of effort necessary to respond to them is large. As Alberto Brandolini put it: “The amount of energy necessary to refute BS is an order of magnitude bigger than to produce it.” In addition, the more extreme a climate or weather record is, the greater the contribution of natural variability, which is known as the Cliff Mass Golden Rule of Climate Extremes.

Ultimately advocates for this legislation ignore economic realities. Roger Pielke, Jr says the “iron law” simply states that while people are often willing to pay some price for achieving environmental objectives, that willingness has its limits.  There is no question in my mind that this legislation will test that willingness. Furthermore, Gresham’s Law of Green Energy observes that “bad money drives out the good.” The green energy subsidies necessary to implement the CCPA transfer wealth and do not create wealth. The subsidies or “bad” money take money out of the system that was “good” inasmuch as it was being used productively. Subsidized renewable resources will drive out competitive generators, lead to higher electric prices, and reduce economic growth.

Whatever the supporters say about costs the fact is that they will be significant. This legislation is presented as necessary but does not does not consider that in order to implement the initiatives tradeoffs are required simply because the resources available are finite. We can do almost anything we want, but we can’t do everything. Building resiliency to historical weather extremes seems to me to be a much better expenditure of resources.

 The economics issues are particularly relevant because of the ambitious goal. One of my principles states that: as the pollution control efficiency increases the control cost per ton reduced increases exponentially. This is particularly true for electrical system fossil emissions reductions. In New York the electrical generating plants reduced CO2 emissions 27% by switching from coal and oil to natural gas at essentially no cost because natural gas was cheaper than coal. Replacing natural gas generation to renewables is going to cost more because natural gas is cheaper. (If natural gas was not cheaper then no renewable subsidies would be necessary). Because the renewables are diffuse the transmission grid must be maintained but renewables do not support the grid so at some point that support must be added to the cost of displacing fossil fuels. Because renewables are intermittent at some point energy storage has to be added to the cost further adding to the cost of every incremental displacement. The final displacement to complete elimination of fossil fuel necessarily must expand the need for storage and grid support for the peak periods which are inherently the most difficult.

The final relevant principle is Ridley’s Paradox: Economic damage from man-made ‘climate change’ is illusory whereas damage from man-made ‘policies’ to fight the said change is real. Advocates for climate change action insinuate that all the extreme weather listed in the CCPA cause economic damage but are noticeably short on documenting how much the legislation will affect that weather. No one has ever claimed that hurricanes will not exist when we reduce CO2 emissions so the reality is that climate change might tweak a storm a little stronger. How much does that incremental change influence cost impacts and how much can we affect that change? In the absence of quantitative estimates this economic damage is an illusion. On the other hand, when we, for example, use food for fuel (ethanol subsidies) and drive up energy costs there are real tangible impacts to those least able to pay.

In conclusion my opinion on the legislation is uniformly negative because it has no plan and violates so may pragmatic environmental principles.