New York Accelerated Renewable Energy Growth and Community Benefit Act

On February 21, 2020 New York governor Andrew Cuomo proposed a 30-day budget amendment that will “streamline the process for environmentally responsible and cost-effective siting of large-scale renewable energy projects across the state”. The proposed legislation, if adopted, will create a new Office of Renewable Energy Permitting to streamline the consenting process for large-scale projects across New York.  This post addresses this latest hypocritical over-reach of the Cuomo Administration.

Permitting Process

New York’s Environmental Conservation Law requires NY regulatory agencies to consider environmental impacts equally with social and economic factors when making permitting decisions and that they must balance those factors when making a decision to approve an action.  New York has different rules for different sized projects.  For any electric generating facility greater than 25 MW in capacity the permitting requirements are specified in Article 10.  The Power NY Act of 2011 established the process for siting generating facilities in Article 10.  That law established a multi-agency siting board and was supposed to streamline the permitting process.  Unfortunately, its requirements are so strict that it is still unwieldy and cumbersome.

As on February 25, 2020 there are 49 projects in the active Article 10 queue.  There are 16 wind facilities proposed with 899 turbines generating 3,117 MW.  There are 25 solar projects proposed for 3,914 MW of capacity and 4 solar projects with storage proposed for 740 MW of capacity covering at least 11,324 acres.  There also are three gas-fired projects and one waste energy project.  Since the new requirements were established only five projects have been approved with two completed in 3.2 years, two completed in 3.5 years and one in 4.5 years.

The governor’s office said the state’s existing process for energy-generating sites was designed for plants that used fossil fuels and created before new clean-energy standards were put in place.  The existing Article 10 process is cumbersome but the insinuation that only fossil fuel facilities have significant enough environmental, social and economic impacts to warrant a complete review of the potential impacts is a stretch in my opinion.

Cuomo’s Environmental Impact Hypocrisy

There is no better illustration of the Cuomo’s administration hypocrisy than the decision to block the Finger Lakes LPG project.  On July 12, 2018, New York State Department of Environmental Conservation (NYSDEC) Commissioner Basil Seggos issued a decision for a proposal to construct and operate a new underground liquefied petroleum gas (LPG) storage facility for the storage and distribution of propane in the town of Reading in the Finger Lakes region of New York.  The decision denied the permit applications for the proposed project on the grounds the facility would have a significant adverse impact on community character in the local area and the Finger Lakes region.  In my post on that decision I pointed out that the community character rationale was based on the State Environmental Quality Review Act section: “impacts to noise and aesthetic resources as revealed on the current record are essential components in the evaluation of impacts on community character in the context of this proposed project”.

So how did the Finger Lakes LPG project affect community character? The project proposed modifications during the application process to reduce the scale and environmental impacts of the project in response to local stakeholder concerns.  The modifications eliminated the proposal to store liquid butane at the facility and reduced the underground propane storage capacity from 2.1 million barrels to 1.5 million barrels; eliminated the project’s rail and truck loading facilities so all deliveries of liquefied petroleum gas would be by pipeline; eliminated one of the brine ponds; and, for lack of a better term offered bribes as they proposed to “provide resources ranging from financial resources to technical resources (mining data) to support community initiatives for the preservation and improvement of water quality in the area, including Seneca Lake”.  The unacceptable aesthetic community character of final proposed plan of the Finger Lake LPG Storage project was a brine pond, a compressor station, and a support building.  The unacceptable noise community character of the project was two electric 75 horse power pumps to pump product from the tanks into the pipeline to the electronically driven injection pumps despite the likely use of insulated walls and advanced fan technology to dampen sound.

It is unclear how an Administration that claimed that Finger Lake LPG Storage project’s minimal aesthetic and noise projected impacts affected community character so badly that the project could not be permitted but can somehow claim that industrial wind and solar project don’t also affect community character.  As noted, there are at least 899 wind turbines and solar panels covering at least 11,324 acres in the existing permitting queue.  Consider, for example, the aesthetic impact of the Ball Hill Windpark.  This facility has been approved (note that it was note permitted under Article 10) to install 29 wind turbines generating around 100 MW with 13 miles of access roads, 5.7 miles of above-ground utility lines, a substation, a switchyard and an operations and maintenance building.  According to the 2018 Proposed Modifications Summary of Environmental Impacts wind turbines will be visible in 33.9% of the area within the 5-mile viewshed.  According to the 2008 Environmental Assessment Form the smaller turbines originally proposed would be visible from greater than 5 miles from a parcel of land which is “dedicated to and available to the public for the use, enjoyment and appreciation of natural or man-made scenic qualities” and “an overlook or parcel of land dedicated to public observation, enjoyment and appreciation of natural or man-made scenic qualities”, and a “site or structure listed on the National or State Registers of Historic Places” and between ½ and 3 miles to a State Wildlife Management Area.

 Environmental Protection

Cuomo is quoted as saying: “Climate change is the existential challenge of our time, and New York State has risen to the occasion by enacting the strongest laws in the nation to protect and preserve our environment” It is utter hypocrisy to claim to protect and preserve our environment while simultaneously proposing to circumvent the permitting process that “Requires environmental and public health impact analyses, studies regarding environmental justice and public safety, and consideration of local laws”.

As far as I can tell the State Administrative Procedure Act (SAPA) and the State Environmental Quality Review Act (SEQRA) requirements for environmental reviews do not apply to the Climate Leadership and Community Protection Act (CLCPA).  One of the requirements of an air quality assessment for a new fossil-fired electric generating unit is to consider the cumulative impact of all local emitting sources as well as the new source itself.  While I think that while an individual industrial wind facility or solar facility may not have a significant environmental impact the cumulative impact of all the facilities required by the CLCPA to provide enough power to meet the reliability needs of the state could have significant environmental impacts.  I don’t think it is fair to ask each renewable energy developer to consider cumulative impacts but I also don’t think that cumulative impacts can be ignored.

The obvious solution would be for the state to evaluate cumulative impacts.  Note, however, that the first step for such an analysis would be to determine how many wind turbines and solar panels would be required and where they would be located.  The CLCPA is just starting the process to prepare a scoping plan that will document the state’s plan to implement the law.  First problem is that scoping plan won’t be available for a couple of years.  In the meantime, I have prepared my own estimate of the renewable resources necessary to meet this legislation.  In order to meet the mandate that all electricity will be generated by non-emitting sources in 2040 and provide enough power to cover the needs of an example winter peak period I estimate that New York will require 11,395 MW of residential solar, 16,117 MW of utility-scale solar, 18,457 MW of on-shore wind and 16,363 MW of off-shore wind.  If the on-shore wind turbines are rated at 4.8 MW that mean that over 3,845 on-shore wind turbines.  Using numbers from one of the solar permit applications, I estimate that 176 square miles will be needed to meet the 16,117 MW of utility scale solar estimate.  The bottom line is that while an individual industrial wind facility or solar facility may not have a significant environmental impact the cumulative impact of 176 square miles of utility-scale solar panels and at least, 3,845 on-shore wind turbines certainly could have negative environmental impacts.

Conclusion

The Niagara County Legislature recently passed four resolutions directed squarely at an amendment to revise the Article 10 rules.  The amended rules only said that if there were minor changes to the proposed facility it did not require the entire application process to be opened up again.  In other words, it was a relatively innocuous change as opposed to the Governor’s plan to entirely ignore the Article 10 process.  Niagara County and other Upstate New York municipalities are already upset that Article 10 has taken away control of local siting decisions.  This proposal to remove the checks and balances included in Article 10 will not be appreciated.

The CLCPA is all style and no substance.  There is no plan to convert all energy sectors away from fossil fuels only a mandate to do it.  If there is no plan then there are no costs, no quantified benefits, and no starting point to balance environmental impacts with social and economic factors for the state as a whole.  The Article 10 permitting process requires that kind of assessment on the local level.  Cuomo’s proposal to remove that check would mean that anyone, anywhere in New York State that could possibly be affected by anything related to the ambitious plan to convert the New York energy to carbon-free resources will have no recourse.  I suspect that when the folks who whined their way to get the Finger Lakes LPG project cancelled are going to be more than a little upset when industrial wind and solar facilities blanket their community.

NYSERDA Toward a Clean Energy Future – A Strategic Outlook 2020-2023

Alicia Barton, President & CEO of the New York State Energy Research & Development Authority (NYSERDA) recently announced the release of NYSERDA’s 2020-2023 Strategic Outlook which is their overview of their plans for the next several years.  This is important because the plan to implement the aspirational Climate Leadership and Community Protection Act (CLCPA) is supposed to be developed in this timeframe and NYSERDA staff will undoubtedly play an important role in that effort.  This post provides an overview of this report and costs.  Subsequent posts will address NYSERDA’s missions in more detail.

Background

On February 11, 2020 the following email was sent from NYSERDA.

Last year was a landmark year for climate action in New York. Governor Cuomo’s nation-leading Green New Deal and the signing of the New York State Climate Leadership and Community Protection Act (CLCPA) have put us at the forefront in lowering carbon emissions and advance a clean energy future with a just and equitable transition that is addressing the most pressing issue of our time – climate change.

Building on the momentum of our accomplishments, New York State is on the path to achieving a carbon free electricity system by 2040, an 85 percent reduction in greenhouse gas emissions by 2050, and ultimately a carbon-neutral economy, touching on all sectors including transportation, buildings and industrial production. With climate action featured prominently in Governor Cuomo’s annual State of the State and Executive Budget addresses this year, NYSERDA’s work to combat climate change, preserve the environment, and grow the green economy is more important than ever before.

I am therefore excited to share NYSERDA’s 2020-2023 Strategic Outlook, which presents our key objectives and strategic focus areas while placing them into the broader context of New York’s long-term energy policies and market landscape. The report highlights our increasing efforts to support New York’s energy transformation through decarbonization of transportation, energy affordability and equity, electrification of buildings, and building a resilient energy system in support of NYSERDA’s five mission outcomes:

            • Greenhouse Gas Emissions Reduction
            • Renewable Energy
            • Energy Efficiency
            • A Distributed and Resilient Energy System
            • Building a Clean Energy Economy.

I hope you will take the time to review the Strategic Outlook and understand we cannot be successful in accelerating action to meet the needs of a changing energy landscape without participation from stakeholders like you. Together we will seize the opportunity to make Governor Cuomo’s vision for a clean energy future a reality.

Message from President and CEO

The strategic outlook report includes an introductory message from the President.  According to this message the rationale for action on climate change “reached new heights during the September 2019 Climate Week, with the youth movement and climate strikes in New York City and across the nation driving home the urgency and importance of addressing one of the most pressing matters of our time.”  Color me unimpressed.  According to this children and activists are responsible for setting New York policy.  What could possibly go wrong?

Funding Commitments

At the top of my list of issues for this regulation is costs which, by the way, is not usually a concern of children and activists.  According to the document: “Several funding sources help NYSERDA advance the State’s clean energy goals and achieve the Authority’s mission. NYSERDA invests these funds in a fiscally responsible manner that maximizes benefits to New Yorkers, fills critical gaps, and addresses the needs of the market.”

Per the document there are four funding mechanisms.

Clean Energy Fund

Authorized by the Public Service Commission (PSC) and derived from an assessment on retail sales of electricity by State utilities — it is comprised of four portfolios: Market Development, Innovation and Research, NY-Sun, and NY Green Bank.

Clean Energy Standard

As authorized by the PSC, these funds are realized by NYSERDA through the sale of Tier 1 Renewable Energy Credits (RECs), Offshore Wind Renewable Energy Credits (ORECs), and Zero Emission Credits (ZECs) as well as receipt of Alternative Compliance Payments from New York’s Load Serving Entities (LSEs). Through PSC orders, LSEs are obligated to meet annual compliance obligations for RECs, ORECs and ZECs. As needed, utility financial backstop collections may be called upon to meet funding shortfalls.

Regional Greenhouse Gas Initiative (RGGI)

Derived from sale of carbon emission allowances as set forth in 6 NYCRR Part 242 and 21 NYCRR Part 507.  The amount of revenues available is dependent on the variable auction prices for the allowances. Per requirements in 21 NYCRR 507, RGGI funds are used to advance energy efficiency, renewable energy, and carbon abatement projects in New York State.

Other Funds

Includes sources provided by various sponsors used for specific purposes. Public funds are leveraged considerably with private sector funding through NYSERDA programs.

For the first time that I have been able to find, the State admits how much some of this might cost.  The NYSERDA Strategic Outlook Anticipated Commitments (April 1, 2020 – March 31, 2023) table states that the total 3-year investment level cost is $14,255,988,000.  Importantly, this is not the entire cost just the cost of the State’s programs to fill critical gaps and address the needs of the market.

The Clean Energy Fund is the largest source of funding.  It is “derived from an assessment on retail sales of electricity by State utilities” which means that the ratepayers are on the hook for the $4.75 billion annual costs.  If all that funding were new charges to the utility bills and my guesses how it should be apportioned, then the average cost per residential customer is on the order of $200 per month for electricity and $200 for gas.  The state should provide that number but note the utility companies have been forbidden to show those numbers in their bills.  Make no mistake however, increases in utility rate cases undoubtedly include these added costs.

Although NYSERDA claims that they invest these funds in a fiscally responsible manner that maximizes benefits to New Yorkers their results to date do not auger well for the cost to implement the CLCPA.  The State has started to do the scoping study to determine how to meet the emission reduction targets, but that won’t be available for three years.  In the meantime, I have evaluated the cost effectiveness of New York’s CO2 investments using the New York Clean Energy Dashboard and NYSERDA’s RGGI-Funded Programs Status Report – Semiannual Report through December 31, 2018.  As shown on the table of anticipated commitments I expect that the CO2 reduction benefit will only be 44,669,559 tons based on the results of those programs to date.  More importantly, there are few indications that these investments will be fiscally responsible because most investment programs described in the investment reports do not meet the social cost of carbon[1] cost effectiveness threshold.

One last item of note is that the priority initiative for energy storage is funded at just under $160 million.  In my table I did not claim any expected reduction in CO2 emissions because energy storage does not directly displace fossil fuel emissions.  On the other hand, energy storage is absolutely needed to backup renewable wind and solar when the wind does not blow at night. When someone claims that wind and solar costs are comparable to a new gas-fired power plant they ignore the added costs necessary to get power to your home whenever you need it.  That requires energy storage and those costs will be enormous.  In particular, for the period 2040 to 2050 I found the energy storage necessary to cover the wind and solar deficit when the wind was not blowing at night for the example period of January 3-4 2018 was a staggering $176.3 billion.

[1] The Social Cost of Carbon is supposed to represent the future cost impact to society of a ton of CO2 emitted today.  Therefore, it is entirely fair to use it as a metric to determine if the investments made from carbon pricing income are cost effectively reducing CO2.  I believe New York will base their carbon pricing on a $50 global social cost of carbon at a 3% discount rate so that is the cost benefit effectiveness threshold metric I use.

 

NYSERDA RGGI-Funded Program Results

The New York State Energy Research and Development Authority (NYSERDA) report New York’s RGGI-Funded Programs Status Report – Semiannual Report through December 31, 2018 (“Status Report”) describes how New York invested the proceeds from the RGGI auctions.  I previously described the report by summarizing the results by sector.  This post provides results by program.

Background

The Regional Greenhouse Gas Initiative (RGGI) is ten years old and has been touted as a successful example of a “cap and dividend” pollution control program.  New York State has been involved in the program since its inception and touts its success.  I have written extensively on the results and have shown that in fact its successes have been limited.   For example, the fundamental assumption for any carbon pricing program is that the proceeds can be invested effectively.  However, the observed results for New York’s experience in RGGI suggests that this may not be the case.

The Social Cost of Carbon (SCC) is supposed to represent the future cost impact to society of a ton of CO2 emitted today.  It is a policy tool that attaches a price tag to the long-term economic damage caused by one ton of carbon dioxide, hence the cost to society.  It was extensively by the Obama Administration to justify the Clean Power Plan, has been proposed for use in the New York Independent System Operator carbon pricing initiative and is included in New York’s Climate Leadership and Community Protection Act.  In that law § 75-0113. Value of carbon, states that

      1. No later than one year after the effective date of this article, the department, in consultation with the New York state energy research and development authority, shall establish a social cost of carbon for use by state agencies, expressed in terms of dollars per ton of carbon dioxide equivalent.
      2. The social cost of carbon shall serve as a monetary estimate of the value of not emitting a ton of greenhouse gas emissions. As determined by the department, the social cost of carbon may be based on marginal greenhouse gas abatement costs or on the global economic, environmental, and social impacts of emitting a marginal ton of greenhouse gas emissions into the atmosphere, utilizing a range of appropriate discount rates, including a rate of zero.
      3. In developing the social cost of carbon, the department shall consider prior or existing estimates of the social cost of carbon issued or adopted by the federal government, appropriate international bodies, or other appropriate and reputable scientific organizations.

Therefore, it is entirely fair to use it as a metric to determine if the investments made from carbon pricing income are cost effectively reducing CO2.  I believe New York will base their carbon pricing on a $50 global social cost of carbon at a 3% discount rate so that is the cost benefit effectiveness threshold metric I will use.

NYSERDA RGGI Program Status

The key table in the Status Report is Table 2 Summary of Expected Cumulative Annualized Program Benefits through 31 December 2018.  It provides costs, energy savings, electricity savings or renewable energy production, greenhouse gas emission savings and the calculated cost benefit ratio.  The $/ton reduced metric is presented on an annual basis and as expected lifetime savings.  For the purpose of this post I use the annual numbers because all the reduction targets are based on an historic annual level (usually 1990).  In order to have an appropriate comparison it has to be annual to annual.

The NYSERDA RGGI Status Report Table 2 – Ranked Cost Benefit Ratio Datatable lists all the programs in the NYSERDA report ranked by the annual cost benefit ratio with just that parameter.  It lists 19 programs with associated CO2 reduction benefits and another 18 programs with no claimed CO2 reductions.  None of the 19 programs with CO2 reduction benefits meets the $50 SCC metric for cost effective investments.  Clearly the 18 programs with no claimed reductions would not be able to meet the metric either.

I prepared a brief summary overview of each of the programs in NYSERDA RGGI Program Cost Effectiveness  After reading the report and summarizing them for the overview I am not impressed and in fact I question the results.  The most cost-effective program, Multifamily Performance Program Assessments in the Green Jobs Green New York sector, had a cost effectiveness value of $58/Ton CO2e.  The program provides financing and co-funding for comprehensive energy assessments and the development of an Energy Reduction Plan, serving market-rate and low- to moderate-income residential buildings with five or more units to increase adoption of clean energy in NYS. Accomplishments.  According to the summary table, they managed to do a total of 316 assessments through December 2018 that resulted in 61,795 residential units served with installed measures for a cost of $3.3 million in “total incentives” and another $1.4 million in “total associated costs”.  Summing the incentives and associated costs and dividing by the 61,795 residential units yields $76.06 per unit.  The summary indicates that this is the cost the comprehensive energy assessment and development of a reduction plan and that rate per unit is reasonable.  But this also means that the actual costs to implement the energy reduction are not included.  So how did NYSERDA claim any CO2 reduction benefits and what are the chances that the actual CO2 reductions were double-counted?

There is another concern. A quick perusal of the programs listed with no reduction benefits demonstrates justifiable cynicism of yet another government program controlled by politicians.  The programs range from practical to clear pork barrel.  New York wants to be able to track emissions from generation sources within the State and from imported sources to create “tradable generation attribute certificates”.  Rather than fund this through the general fund it is easy to justify this as a necessary expense for these funds.  The research projects are another segment of funding where there is a justifiable rationale for funding projects that have no reduction benefits short-term because they could lead to long-term reductions.  At the extreme of clearly unjustified funding is the Brookhaven National Laboratory Ion Collider.  I have no idea the tortured logic that was used to justify spending any RGGI funds on this.

Conclusion

Advocates for carbon pricing schemes assume that the investments from the proceeds are worthwhile.  I think these results and the results from New York’s Clean Energy Dashboard demonstrate that is not the case.  The Regulatory Analysis Project (RAP) study: Economic Benefits and Energy Savings through Low-Cost Carbon Management notes that “Many advocates of carbon pricing begin with the proposition that the main point is to charge for carbon emissions “appropriately” and that carbon reductions will surely follow in the most efficient manner. While carbon pricing is a useful tool in the fight against climate change, there is now substantial experience to suggest that wise use of the resulting carbon revenues is equally important, or even more important, if the goal is to actually reduce emissions at the lowest reasonable cost.”

The other concern is the cost of the New York program relative to the social cost of carbon. The NYSERDA RGGI Status Report does not include a single program that reduces carbon dioxide more cost efficiently than $50 per ton.  Because I have shown that eliminating New York CO2 emissions that would provide a reduction, or a “savings,” of approximately 0.0026°C by the year 2050 and 0.0054°C by the year 2100.  Because you cannot measure that small a temperature difference there will be no tangible benefit of the CLCPA.

My primary concern with New York’s clean energy mandates is the cost.  If the cost is small then signaling New York’s virtue might have value. According to the Clean Energy Dashboard, New York has invested $1,051,359,837 through the third quarter of 2019 but can only claim 3,057,131 tons of reductions giving a CO2 invesment efficiency of $343.90 per ton of CO2 equivalent reduced.

It is not clear how advocates of these programs can justify the costs given these results.  The cost efficiency does not even approach the supposed appropriate cost of carbon dioxide and the there is no tangible expected change to global warming.

CLCPA Implementation Part 1

In the summer of 2019 the Governor Cuomo and the New York State Legislature passed the Climate Leadership and Community Protection Act (CLCPA) which was described as the most ambitious and comprehensive climate and clean energy legislation in the country when Cuomo signed the legislation.  In one of the first implementation tasks the New York State Department of Environmental Conservation (DEC) has started the process to calculate a statewide Greenhouse Gas emissions (GHG) limit for this law.  This post addresses that rulemaking.

DEC Rulemaking

DEC recently released a stakeholder draft for their statewide greenhouse gas emission limit rule.  This barebone draft lists six gases that will be considered in the inventory and lists potential economic sectors that might be covered.  As part of this process DEC announced a webinar for February 14 and again on February 28 to provide the public the opportunity to learn and ask questions about the rulemaking.  During the first webinar DEC said that they would post a recording of the webinar.  If you are unfamiliar with New York’s rulemaking process the webinar provided a good summary.

Existing New York GHG Inventory

The New York State Energy Research & Development Authority (NYSERDA) works with DEC to prepare an annual inventory of GHG emissions.  The most recent report, Greenhouse Gas Inventory 1990-2016 contains a detailed inventory of historical greenhouse gas emission data from 1990-2016 for New York State’s energy and non-energy sectors.  I have been involved with all aspects of emissions inventories from developing emission factors, using inventories for air quality modeling, to preparing reports for regulatory agencies over my entire career.  I can assure you that this is a non-trivial task.  Although I have some quibbles with the NYSERDA numbers I believe that it represents New York’s emissions adequately for all purposes.

CLCPA Inventory Requirement

The CLCPA requires a report on GHG emissions, § 75-0105: Statewide greenhouse gas emissions report.  The regulation states that “No later than two years after the effective date of this article, and each year thereafter, the department shall issue a report on state-wide greenhouse gas emissions, expressed in tons of carbon dioxide equivalents, from all greenhouse gas emission sources in the state, including the relative contribution of each type of greenhouse gas and each type of source to the statewide total”.  The law specifies reductions in the future from 1990 emission levels so this section includes “§ 75-0105(5): The statewide greenhouse gas emissions report shall also include an estimate of what the statewide greenhouse gas emissions level was in 1990”.  DEC is interpreting this legislation to mean that they have to implement a new regulation that codifies the GHG emission inventory process.

It is not clear to me how much difference there is between the CLCPA inventory requirements and the methodology used for the NYSERDA report with one exception.  In particular, the legislation states that “§ 75-0105(3): The statewide greenhouse gas emissions report shall also include an estimate of greenhouse gas emissions associated with the generation of imported electricity and with the extraction and transmission of fossil fuels imported into the state which shall be counted as part of the statewide total.”  NYSERDA does not try to estimate extraction and transmission of fossil fuels emissions.

Lawmaking without Technical Expertise

I have no experience lobbying politicians to influence legislation and, frankly, have no desire to do so.  If I had been involved in this instance, I would have said that the legislation should specify the use of the NYSERDA inventory.  It has all the numbers you need, no development is necessary, and represents GHG emissions well.  Unfortunately, someone, somewhere convinced somebody to include the requirement for “an estimate of greenhouse gas emissions associated with the generation of imported electricity and with the extraction and transmission of fossil fuels imported into the state”.  At a minimum this component will have to be added to the NYSERDA inventory.  I do not know what else, if anything, DEC has deemed to be incompatible between the CLCPA law and the existing NYSERDA inventory.

As a numbers guy, I oppose including extraction and transmission emissions because the uncertainty bounds on the extraction and transmission values are large today and much worse for 1990.  In 1990 coal and oil generation was much higher than today and it is not clear to me how you could figure out the source and methodology used to extract the fuel.  The fuel specification data needed to estimate that information has been purged from company records, not only because it was so long ago but also because most of the companies who operated the 1990 facilities no longer own them.

Because including the extraction and transmission provision was a political decision, it is appropriate to discuss possible motives with the caveat that this has never been considered a skill of mine.  Clearly, including these numbers will increase the 1990 baseline and current emissions.  Note that the language says transmission and not transportation.  Coal and oil in New York are transported but natural gas is transmitted.  Therefore, my guess is that it was included by someone who wanted to make natural gas look bad by showing higher emissions.

Conclusion

The extraction and transmission emissions requirement has unintended consequences.  NY has a perfectly good emissions inventory but that provision means a lot of work has to be done to include those emissions. And DEC has no choice but to try to follow the requirements of the legislation.  As I noted above emissions inventories are difficult under any circumstances but when handicapped by requirements to adjust the numbers for ulterior motives the result is going to be significant effort for very little tangible benefit.

If it is correct that the extraction and transmission provisions were included by anti-natural gas advocates then I have to laugh.  I am convinced that the New York State anti-natural gas position is only supportable if the numbers are ignored or mis-understood and this is a vivid example.  In particular, the addition of extraction and transmission emissions to the 1990 baseline is going to show a larger relative decrease for coal and oil than natural gas.  Extracting coal has to be more GHG intensive than drilling and fracking a natural gas well.  Transporting the coal by rail or oil by pipeline to a refinery and then residual oil by ship or train to the power plants have much larger emissions than a natural gas pipeline to a power plant.  Worse still for the individuals who got this included is the fact that the higher baseline means that % reduction limits will also be higher.  In other words the CO2 limits will be higher so more CO2 can be emitted.

NYISO Carbon Pricing Letter to the Editor

Kevin Lanahan, Vice-President of External Affairs and Corporate Communications for the New York Independent System Operator (NYISO) had a letter to the editor of the Syracuse Post Standard published advocating their carbon pricing initiative.  I submitted a brief letter in response but was limited to 250 words.  This post expands on my concerns with carbon pricing in general and the NYISO carbon pricing initiative in particular.

Background

The NYISO letter to the editor describes how their carbon pricing initiative will work:

      • The state sets the carbon price, a certain amount per ton of CO2 being emitted.
      • Carbon-emitting power plants pay for the carbon they release into the atmosphere.
      • About half of the revenue goes to low-carbon or carbon-free resources like wind, solar and hydro.
      • The rest would be distributed back to consumers.

The NYISO has a fancy web page lauding their proposal that includes links to primary references describing their initiative, a link to a video describing how it will work and a scrolling list of supporters of the program.

I have been following this initiative since it was first proposed and have written ten posts specifically addressing aspects of the proposal.  I suggest reading my last post for a summary of my rationale to oppose the proposal. More recently as part of my comments (01/23/2020) on the New York State Department of Public Service Resource Adequacy Proceeding I responded to comments that suggested that it should be implemented.  This post summarizes those comments.

I have been involved in New York’s current carbon pricing program, the Regional Greenhouse Gas Initiative (RGGI), program process since its inception.  I believe that supporters of the NYISO carbon pricing initiative have not considered the RGGI results or practical limitations of the initiative.  When those factors are considered I have serious doubts that it will be efficient or cheaper than other alternatives. My comments will address each aspect of the NYISO letter.

Price Setting

According to the plan, the state will set the carbon price.  All indications are that the carbon price will be set to equal the Social Cost of Carbon (SCC).  That value is supposed to represent the future cost impact to society of a ton of CO2 emitted today. I addressed specific issues with the SCC in this context here and  here.  Despite those problems the State will likely go ahead and use it.  I believe New York will use a carbon price of $50 which is the global social cost of carbon at a 3% discount rate.

As an aside, there is a fundamental question underlying the State’s initiatives.  If the cost per ton removed of any reduction program exceed the SCC value, then it exceeds the expected societal costs of the emissions.   The question that has to be resolved is whether the State should invest in programs that do not meet this effectiveness threshold.  If the costs exceed the projected cost of the impacts, then what is the point?

CO2 Payments

The NYISO proposal would change the existing generator payment methodology by adding the carbon price as a function of generator’s hourly CO2 emissions so that each generator pays that price to the NYISO.  For a renewable generator there are no emissions so there is no carbon payment.  For a natural gas fired turbine that emits CO2 the hourly payment to NYISO would equal the tons emitted multiplied by the SCC value of ~$50 per ton.  It is important to understand that adding the cost of carbon not only costs consumers the cost of the carbon payment but also the cost for higher wholesale electricity.

The costs of this carbon pricing initiative are significant.  The average number of tons of CO2 emitted in New York in 2015 and 2016 was 32,106,042 tons so the carbon price at $50 per ton is $1.605 billion. I did a static calculation using 2015 and 2016 load and marginal emission rate data to estimate the effect of the carbon charge on wholesale electricity that increases generator net revenues. My analysis showed that in 2015 the total cost of the net revenues due to higher wholesale prices is $3.027 billion as compared to $1.321 billion calculated by applying the SCC to actual CO2 emissions. As discussed below some of the carbon price revenues will be returned to customers.  However, the increase in costs due to the change in market clearing price will not.

There are two other carbon price complications.  Leakage refers to the situation when a pollution reduction policy simply moves the pollution around rather than actually reducing it.  Ideally the best carbon pricing approach would apply to the entire globe and all energy sectors.  The NYISO carbon pricing initiative proposes to price just the New York electricity market.  The electric grid is inter-connected and obtaining emissions from outside New York is problematic in the first place.  Secondly the proposal will likely result in locational leakage when New York costs increase so energy production and emissions are not reduced but simply shift emission location out of the state.

Revenue Distribution

The NYISO letter says that “About half of the revenue goes to low-carbon or carbon-free resources like wind, solar and hydro.”, and “The rest would be distributed back to consumers.”  I am not sure how to interpret those statements.  I think they are saying that all the carbon price money collected will be returned to consumers and the increases in net revenues due to higher wholesale prices is going to low-carbon and carbon-free resources.  Even though I don’t think NYISO has been particularly forth-coming acknowledging the wholesale price component revenues I will be charitable and assume that my interpretation is correct.

Conclusion

I could go on but I think the summary from the Regulatory Assistance Project analysis for the State of Vermont is good.  It that found “we conclude that an attempt to reduce Vermont’s carbon emissions based on carbon pricing alone will cost more, and deliver less, than a program of carbon reductions that is based on practical public policies—policies that attack the main sources of carbon pollution through tailored, cost-effective programs geared to Vermont’s families, businesses, and physical conditions.”

Rare Snow Storms Today are Blatantly Obvious, Not

This post describes another evaluation of anecdotal evidence that is portrayed as evidence of global warming.  Previously I looked at a NPR radio segment in Great Lakes Vineyard Confronts Climate Change and examined a claim by a senior official at the Department of Environmental Conservation in Hay Harvest Climate Trend?.  This post addresses the frequency of snow storms in my home town.

Thread Posts

On the Facebook page “If you grew up” for my Oneonta, NY hometown group someone posted a conversation starter about the Old Farmer’s Almanac forecast for this winter.  This is the post that got me started:

“The winters we had when we are young are gone. It’s rare when we get a major storm. Amazing how much it has changed in 50 years – but people still deny the blatantly obvious.”

I responded to the first post with:

“If you look at the data rather than rely on anecdotal information and your memory (when I was a kid the snow came up to my waist all the time), then you will find that no one is ignoring the blatantly obvious. See for example: reference and reference

That prompted this response:

“The source you cite is suspect at best. Reference

I responded to that with this:

“My advice is to not trust anybody on any aspect of the global warming problem or purported solution.  Check out the numbers and data yourself.  The posts I referenced showed where they got their data and their data show that there is no “blatantly obvious” snowfall trend. Despite the “suspect” web site I stand by that position.”

That prompted this response:

“You are welcome to your opinions and to selectively choose which data you want to use, but opinions are just that. Some people also firmly believe that vaccines are horrible based on one dubious study that has been disproved, others believe the world is flat. The issue is that the climate is changing faster than it normally would due to man’s activity – some areas are getting dryer, others wetter, overall the temperature is rising but in some areas it will get colder. To dismiss the vast majority (@97%) of trained scientists and the blatantly obvious evidence in favor of the very loud deniers doesn’t make the 3%’s points valid. Reference

My response:

“I said check the numbers and data yourself.  In this instance all I am saying is that don’t confuse weather and climate.  Just because it some observed weather phenomenon is different does not necessarily mean it is related to global warming.

When you combine saying that climate is changing faster than normal due to man’s activity with the suggestion that disagreeing dismisses the vast majority of trained scientists, it is misleading based on my check of the claim and survey.  I think trying to determine the rate of climate change and figure out how much of the observed climate change is due to mankind is too difficult to be conclusive.  I have not found any survey that asked the policy relevant question about the rate of change and man’s actitivity.  Instead they basically asked whether there was a greenhouse effect.

I also said don’t trust anyone.  Search on 97% climate scientist myth and then search to find the other side of the story then decide for yourself.  Trying to do a similar comparison for the rate of climate change and contribution of mankind is more difficult so I don’t think you can do something similar easily.  Although I think I can offer a trained scientist opinion don’t trust me even though I have two degrees in meteorology, certification as a consulting meteorologist and over 40 years experience.”

Approach

First, let’s define weather and climate.  According to the National Oceanic and Atmospheric Administration’s National Ocean Service “Weather reflects short-term conditions of the atmosphere while climate is the average daily weather for an extended period of time at a certain location.”  The referenced article goes on to explain “Climate is what you expect, weather is what you get.”

The Northeast Regional Climate Center data sets provide processed values for temperature and precipitation for many observing sites in New York.  If global warming is affecting the winter storm climatology then there should be trends in either or both the daily snowfall or snowfall accumulation data.  In a previous analysis of weather vs. climate perception I analyzed data from Ithaca, NY which is just about 90 miles away from Oneonta. Because it was readily available and I think representative of snowstorms in Oneonta, I just used the data from that site for daily snowfall and snowfall depth.  I also said trust no one so if anyone wants the data I can provide that for your own analysis.

I did a simple analysis of the daily snowfall and snowfall accumulation.  In both cases, I fit a linear regression model to describe the relationship between the daily values and time for the months November, December, January, February, and March. 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.  I determine which linear regression model provides the best fit and then use that model to describe the data. If the calculated probability value (P-value) is less than 0.05, there is a statistically significant relationship at the 95.0% confidence level and I defined the test result as significant.

Results

The purpose of this analysis was to determine if the frequency of major snowstorms in Central New York has changed due to climate change.  In this analysis I looked at climatic changes over the period of record from Ithaca and calculated the trend over the entire period for daily snowfall amounts and daily snowfall depth.  The Ithaca, NY Daily Snowfall Depth December 1899 through March 2019 figure shows quite a bit of variation.  Although there is a statistically significant increase in daily snow depth over this period the trend is only one inch per century.    Given the variation across the graph I do not consider this to be meaningful.  TheIthaca, NY Daily Snowfall (Inches) figure similarly shows so much variation that claiming any kind of trend is dicey but there also is a statistically significant increase in daily snow fall.  These data show that there is no trend towards fewer storms.

So why is there an impression that it is rare that Oneonta no longer gets major storms?  In the Ithaca, NY Extreme Daily Snow Depth and Snowfall (inches)table note that if the winters when you were young were around 1960 there were a couple of years when the snow depth was over 24” out of six in over 100 years.  Similarly, if your youth was in 1971 and 1972 there were two storms with snow over 16” out of the eight storms in over 100 years.  No question that would give the impression that the winters were different in your youth.

Another important point to keep in mind is that you could change the results by picking a different starting point for the analysis.  I also suspect that you could get different results by screening the data differently.  The choices I made were the simplest.  One you start tweaking input assumptions you can be rightfully accused of statistical manipulation.

Conclusion

These data illustrate the point I tried to make in the Facebook posts.  In my experience, whenever I have looked at the data behind a climate change related claim it was more complicated, more uncertain, and often contradictory to the claim made.   It is also difficult to separate whether the observed phenomenon is just weather variability or climate trend.

This post does not prove that there isn’t climate change, that mankind is not having an effect on climate, or that it isn’t appropriate to do something. If this were just a simple scientific disagreement it could be shrugged off as inconsequential.  Unfortunately, in New York State this kind of anecdotal evidence has been used to justify last summer’s Climate Leadership and Community Protection Act (CLCPA) which has been described as the most ambitious and comprehensive climate and clean energy legislation in the country when Cuomo signed the legislation.  The Citizens Budget Commission developed an overview of the CLCPA targets in Green in Perspective: 6 Facts to Help New Yorkers Understand the Climate Leadership and Community Protection Act. Look at those references to get a feel for what is in store for New York.

I have spent a lot of time trying to figure out what this law could mean.  For example, my latest estimate for the cost for the energy storage batteries needed when winds are light at night during the winter is $176.3 billion through 2050.  The United Kingdom has similar legislation in place and it was recently announced that their plan would require conversion of all gas central heating to electric.  I expect no less here.  As a result when I see anecdotal information used to justify these costly programs I have to respond.

NYS REV Investment Cost Effectiveness

Earlier this month I did a series of posts on the Citizens Budget Commission Getting Greener Report and this post addresses one of their recommendations.  In particular, they recommended that New York State “Establish a prioritization system to pursue renewables that provide the greatest GHG reductions at lowest cost.”  The Clean Energy Dashboard has data to start just such a system.

In my post on the New York Clean Energy Dashboard I noted that it provides data describing Reforming the Energy Vision program activity by electric and gas utilities and the New York State Energy Research and Development Authority (NYSERDA)”.  The dashboard has data that can be used to determine the cost efficiency of CO2 reductions.   In my previous post I presented the total cost effectiveness of all the programs and in this post, I break down the cost effectiveness by program for a first attempt at setting priorities.

Methodology

In order to determine which programs provide the greatest GHG reductions at the lowest cost we can filter Clean Energy Dashboard data twice and calculate a cost per ton reduced for each program.  To get emission reductions, the Clean Energy Dashboard needs filters for C02e Emission Reductions, Gross Annual (Metric Tons) and acquired savings.  I accessed the data tables and downloaded the data in the View Progress by Program tab that includes CO2e Emission Reductions, Gross Annual (Metric Tons).

To get the money spent to get those emission reductions, the Clean Energy Dashboard needs filters for Budget (dollars) and acquired savings.  We are asking for the money spent when “both the measure is installed and currently operational, and the funds associated with the measure or project have been expended.”  I access the data tables and downloaded the data in the View Progress by Program tab that lists the Budget (Dollars) data.

The next step was to combine the two data sets so that I could match the programs listed in each data set.  There was not a complete one-to-one correspondence between the programs so I manually edited the file to match all the programs possible.

Results

Once I had a data file with one-to-one correspondence, I found that there were three categories.  One program was included with emission reductions but no budget dollars and 52 programs had budget dollars but no emission reductions.  There were 107 programs with data for CO2e Emission Reductions and Budget dollars so that I could calculate cost effectiveness.

There was one Central Hudson program that had CO2e Emission Reductions but no budget funds.  In their Community Lighting program Central Hudson partners with local not-for-profit organizations to distribute free LED lightbulbs to eligible residential  customers and has reduced 334.21 tons of CO2e.

The 52 programs with spent money but no emission reductions were primarily NYSERDA projects.  These programs had an acquired budget total of $113,401,265. There were five Con Ed programs, two National Grid (NiMo) programs and the remaining 45 programs were all from NYSERDA.  I think I will return to these programs later because the emphasis in this post is on the programs where we can estimate cost effectiveness.  For now the New York State Clean Energy Dashboard Programs with Budget Money but No CO2e Emission Reductions table lists the programs.

For the 107 programs with both emission reductions and budget data, I divided the funds spent by the CO2 reductions to determine the CO2 invesment efficiency ($/ton) for each program.  The Carbon Dioxide Equivalent Cost Effectiveness Reductions table lists the cost effectiveness data for each program along with the administrator, program name and description, CO2e reduction and acquired funds spent ranked by the cost per ton.  I summarized the results in the Summary of Carbon Dioxide Equivalent Cost Effectiveness Reductions table.  Note that there were a total of 3,056797 CO2e emission reduction tons and an acquired budget total of $937,958572 which works out to an overall cost per ton rate of $306.84 per ton CO2e reduced.

The Social Cost of Carbon (SCC) is supposed to represent the future cost impact to society of a ton of CO2 emitted today.  I believe New York is going to base its carbon pricing on the $50 global social cost of carbon at a 3% discount rate.  In other words, if we spend more today than $50 per ton then we exceed the future cost impact to society. The summary table lists data by different multiples of the $50 SCC cost and shows that only two programs are below that criterion.  Seven programs are under $100, 19 more are under $250, and 79 programs exceed five times the SCC threshold.

Programs

There are a wide range of project types in the 107 programs included in the analysis.  There are concerns about the quality of the CO2 reduction estimates especially with regards to a verifiable methodology and how the costs for the programs are calculated.

I worry more about the CO2 reduction estimates.  For example, compare NYSE&G Energy Marketing Gas Program (#6 in the Carbon Dioxide Equivalent Cost Effectiveness Reductions table) with Central Hudson Behavorial Modification (#7).   The NYSE&G program is an online Energy Marketplace that offers instant rebates to residential customers who purchase qualifying  Wi-Fi thermostats.  I imagine that the program managers for this project found some analysis that provided a range of CO2 reduction estimates for wi-fi thermostat installations and then combined that estimate with the number of thermostats sold to come up with the reduction.  However, this estimate has to assume that the installation of the thermostat led to an energy-saving change at the homes in question and how much of a change.  Unfortunately this assessment is a relatively strong one as compared to the Central Hudson behaviorial modification program.  In that project Central Hudson set up a customized web portal for customers to access and track energy usage, and to access energy saving tips and savings.  The only way I to see how to quantify how that access changed behavior that in turn reduced CO2 emissions is to guess.

As noted previously, there are only two programs with claimed CO2 reduction effectiveness less than the SCC target value of $50.  The better of the two, NYSERDA Clean Energy Communities program, claims 220,182 tons in reductions at a cost of $4,947,773.  The program provided  assistance, technical support, and tools and resources to local governments for implementing clean energy High-Impact Actions in local communities.  The NYSERDA website describes the Clean Energy Communities program:

“Building a more sustainable New York starts with building more sustainable communities. Local governments affect energy choices in their communities, from government operations to homes, businesses, and community institutions.  Local governments in New York State can use the Clean Energy Communities program to implement clean energy actions, save energy costs, create jobs, and improve the environment. In addition to providing tools, resources, and technical assistance, the program recognizes and rewards leadership for the completion of clean energy projects.”

I classify this program as more unverifiable than most others.   Digging down into the project descriptions for this program you find for example providing incentives to a local government to install an electric vehicle charging station.  There is no way to estimate how much use that charging station has been used and how much CO2 was avoided.  As a result, I am not comfortable that this program did in fact produce the CO2 emission reductions claimed.

On the other hand, the second program that was better than the SCC target, NYSERDA Industrial Transition program (#2), provided technical and financial support to assist industrial and data center facilities with process improvement projects to help link energy and their core mission.  Those facilities very likely quantified the before and after implementation energy usage and could therefore provide a emission reduction that can be traced to verifiable information.  Therefore, I am more comfortable that this program did produce the CO2 emission reductions claimed.

There also are issues with the cost estimates.  On the face of it this should be simpler because the project managers must know how much money is being spent.  However, it gets more complicated when you consider the lifetime effectiveness of the investment.  For example, if you pay for LED lighting to replace  incandescent bulbs the investment is effective over the lifetime of the LED lights.  For my calculation I made the simple assumption that it is appropriate to use the total cost to get the reduction irregardless of the expected lifetime of the investment.

Conclusion

There is political, personal, and organizational pressure for larger as compared to smaller CO2 reductions for these programs.  As shown above, many of the programs have largely unverifiable emission reduction calculation methodologies.  I conclude it is likely that the emission reduction estimates for these programs are higher than we can actually expect to see.  The costs over time could be different too.

Nonetheless, these are numbers that can be used to meet the Citizens Budget Commission recommendation that New York State “Establish a prioritization system to pursue renewables that provide the greatest GHG reductions at lowest cost.”  This post provides a first cut list to set those priorities.

My bigger concern is the very poor performance of these programs relative to the SCC target levels.  As Resources for the Future explains:

One of the primary ways the SCC is used in policy design and evaluation is through benefit-cost analysis. A benefit-cost analysis compares the total economic benefits of a proposed policy to its total economic costs. Take, for example, a regulation that limits air pollution: its total benefits—including those from improvements to public health and the environment due to better air quality—would be compared against the implementation costs, such as the purchasing and installation of equipment to control air pollution. Benefit-cost analysis has been a required part of federal regulatory analysis since it was implemented by the Reagan administration in 1981.

The SCC is used in benefit-cost analysis to quantify the dollar-value of a policy’s effect on climate change due to changes in greenhouse gas emissions. For policies that increase emissions, the expected increase in emissions (in tons) is multiplied by the SCC, and the result is included as part of the total estimated costs of the policy. For policies that decrease emissions, the change in emissions is multiplied by the SCC, and the result is added to the expected benefits of the policy.

The bottom-line concern is whether New York State should be pursuing any of the 105 programs whose decrease in emissions exceeds the SCC cost benefit threshold of $50.  The performance of these programs is not encouraging.  There are 79 programs that exceed five times the $50 SCC threshold that total $801,173,268 but only claim reductions of 1,494,548 tons for a cost effectiveness of $536 per ton reduced.  Combine those programs with the 52 programs that claim no CO2 reductions, REV programs in the Clean Energy Dashboard have spent over $914 million with very little emissions reductions to show for it.