NY Climate Act Implementation – Electric Generation De-Carbonization Pathways

On July 18, 2019, Governor Cuomo signed into law the Climate Leadership and Community Protection Act (Climate Act). It is among the most ambitious climate laws in the world and requires New York to reduce economy-wide greenhouse gas emissions 40 percent by 2030 and eliminate the use of fossil fuel for electricity production by 2040. New York’s politicians were sure that implementing these goals was simply a matter of political will so they offered no plan how it would be done.  On June 24, 2020 Energy plus Environmental Economics (E3) presented results of their emissions reductions pathway analyses to the New York Climate Action Council which gives the first inkling of what the law may suggest will be done.  This post analyzes the electric generation analysis approach.

I am following the implementation of the CLCPA closely because its implementation affects my future as a New Yorker.  Given the cost impacts for other jurisdictions that have implemented renewable energy resources to meet targets at much less stringent levels I am convinced that the costs in New York will be enormous and my analyses have supported that concern.  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.

I did a post on the Pathways to Deep Decarbonization in New York State Presentation  that can be viewed on the video of the webinar.  The Pathways to Deep Decarbonization in New York State – Final Report  itself and two appendices: Appendix A: Methods and Data  and Appendix B: Literature Review of Economy-Wide Deep Decarbonization and Highly Renewable Energy Systems  were included in the meeting materials.  This post addresses electric generation in the final report and Appendix A.

E3 Modeling

The E3 analysis uses models to simulate which combinations of resources can be used to meet the Climate Act goals, how the transmission grid can provide those resources and the renewable capacity needed to maintain reliability.  I will address these three models below.

E3 used their PATHWAYS model to “create strategically designed scenarios for how the State can reach its 2030 and 2050 GHG goals. The model is built using ‘bottom-up’ data for all emissions produced and energy consumed within the State.   It identifies GHG reduction measures from transportation, buildings, industry, electricity, and other sectors, and captures interactions among measures to create a detailed picture of emissions reductions and costs through 2050”.  E3 notes “that as a ‘stock rollover’ model, PATHWAYS considers realistic timing of investments to replace appliances, vehicles, buildings, and other infrastructure. It pays special attention to the dynamics between electricity generation and new loads from transportation and buildings, as well as the role of low-carbon fuels such as advanced biofuels, hydrogen, and synthetic fuels”.

I believe there is a major problem with their “stock rollover” model.  As far as I can tell, it does not consider the readiness of the technology proposed.  The International Energy Agency (IEA) recently published “Special Report on Clean Energy Innovation” that notes:

“Without a major acceleration in clean energy innovation, net-zero emissions targets will not be achievable. The world has seen a proliferating number of pledges by numerous governments and companies to reach net-zero carbon dioxide (CO2) emissions in the coming decades as part of global efforts to meet long-term sustainability goals, such as the Paris Agreement on climate change. But there is a stark disconnect between these high-profile pledges and the current state of clean energy technology. While the technologies in use today can deliver a large amount of the emissions reductions called for by these goals, they are insufficient on their own to bring the world to net zero while ensuring energy systems remain secure – even with much stronger policies supporting them.”

I have shown that E3 ignored these limitations in its assessment of the technology needed to provide electricity when they claimed “Deep decarbonization in New York is feasible using existing technologies”.  That statement mis-characterizes the actual situation.  As IEA points out feasibility depends upon making all parts of the technological application process, what they call the value chain, commercially viable.  The fact is that for the E3 technologies proposed to address the winter peak problem, one or more aspects of commercial viability, availability limitations, or public perception make the E3 recommendations risky bets for future reliability and affordability.

In order to consider effects of the transmission grid on the de-carbonization effort, E3 used their RESOLVE model:

Our modeling approach also incorporates detailed electricity sector representation using E3’s RESOLVE model. RESOLVE is used to develop least-cost electricity generation portfolios that achieve New York’s policy goals, including 100% zero-emission electricity, while maintaining reliability.

For this study, RESOLVE was configured with six zones: two zones representing the upstate and downstate portions of the New York electricity system and four zones representing the external markets that interact with New York.

It is beyond the scope of my analysis to quantitatively determine whether this resolution is sufficient to represent the New York grid relative to the generation portfolios.  Qualitatively, however, the fact that New York City, which has specific transmission load constraints and a requirement for a minimum level of in-city generation, is lumped with Long Island suggests that this is a significant deficiency.

In my comments on the resource adequacy hearing and elsewhere I have argued that actual short-term meteorological data must be used to correctly characterize the renewable resource availability for New York in general and in areas downwind of the Great Lakes in particular. This is because the lakes create meso-scale features, most notably lake-effect snow and clouds, that can affect solar resources many miles from the lake shore. It is important that the solar and wind resources be evaluated based on geographically representative short-term data so that site-specific temporal effects can be included. E3 calculates the “effective load-carrying capability” which they define as the amount of “perfect capacity” that could be replaced or avoided with wind, solar, or storage while providing equivalent system reliability.

The values in this analysis were developed using E3’s reliability model, RECAP. The model assesses generation resource adequacy for a power system based on loss-of-load probability analysis but is inherently flawed for this application because it does not consider the observed renewable resource availability which can only be quantified by a detailed look at historical meteorological data such as I have proposed.

Electricity Demands

E3 correctly notes that it will be challenging to meet increased electricity demand due to electrification of vehicles and buildings while at the same time reducing, and eventually eliminating, GHG emissions while maintaining system reliability.  E3 predicts that electricity demand may increase by 65% to 80% depending on the “scale and timing of electrification”.  The electricity requirements depend upon how much of a role bio-fuels and synthetic fuels can play in replacing fossil fuels.  This analysis suffers from the lack of consideration of technical readiness for those technologies.  The IEA report lists very few bio-fuel and synthetic fuel technologies that have reached sizeable deployment and have all designs and underlying components at high technological readiness levels.

Peak Demands

The report explains that the transformation will “change the timing and magnitude of consumers’ electricity demands and create a “winter peaking” system in New York, owing to new demands from electric space heating”.  They go on to claim “Flexibility in electric vehicle charging patterns and building loads can significantly reduce peak demands and the need for new electric generating capacity. Flexible loads can serve a similar role to battery storage, shifting demand to times of high renewables output.”

“Figure 17 illustrates this evolution of the system peak—and the impacts of electric load flexibility over time”.  Because I think winter load is the greater future concern, I will discuss winter instead of summer information.  Figure 17 Annual summer and winter peak electricity demands shows how the peak electricity demand is expected to change.  I was unable to find the corresponding data for the annual summer and winter peak electricity demands portion shown in the figure but I estimate from the figure that the winter statewide peak load will be 24 GW in 2020 and in 2050 the peak load will be 35 GW with flex loads and 43 GW without flex loads.

The bottom portion of Figure 17 Average hourly loads by month is confusing at first glance.  It shows the average hourly load as it varies by each month.  E3 used their models to generate load shapes and develop their claim that there is 8 GW of peak load shaving available in 2050.  There is insufficient information to critique that claim but I am struck by the appearance of the 2020 and 2050 hourly load shapes.  In 2020 heating is a small component of load but in 2050 it will be much larger.  Consequently, I expect that the components of the load shape will change so I would expect some kind of change in the shape.  Instead it appears that the load is just larger and there is no change in the shape.  Importantly it is not clear why the load can be shaved.  Where do you shift the heating component that makes up the sharp increase early in the morning?  If you heat your home at 3:00 AM it will be cold by 7:00 AM during the peak.  Moreover, note that there does not appear to be as much flex load available at the peak later in the day that is roughly the same magnitude.  Consequently, I am not convinced of their arguments that 8 GW of load can be shaved off the winter peak.

Resource Portfolios

E3 claims that New York State has “access to diverse in-state renewable energy resources and zero-emissions technology options, as well as access to adjoining states, provinces, and regional transmission systems which offer additional options for zero-emissions energy supply”.  The E3 analysis used their RECAP model to determine “the new resources required to reliably meet electricity demand in buildings, transportation, and industry with 100% zero-emissions electricity for the upstate and downstate regions of New York”.

Although E3 claims that their analysis models the reliability contributions of intermittent and limited-duration resources, the fact that they did not use a comprehensive and more representative meteorological data set as input makes that claim weak in my opinion.  The worst-case reliability problem in the no-fossil-fuel future is very likely to be the worst-case wind and solar resource availability period not the peak load.  Unfortunately, it is possible that the winter conditions that create future peak loads may also exacerbate renewable resource availability so the two conditions may overlap.  I don’t think anyone has adequately addressed this issue yet.

E3 claims: Our analysis finds that New York can reliably meet growing electricity loads with 100% zero-emissions electricity by relying on a diverse mix of resources, including:

• • • • • Onshore and offshore wind
        • Large-scale and distributed solar
        • In-state hydro and existing and new hydro imports from Quebec
        • Existing nuclear capacity
        • Existing and new combined cycles (CC) and combustion turbines (CT) utilizing zero-emissions biogas
        • New natural gas-fired combined cycles with carbon capture and sequestration (CC-CCS)

Eventually I will try to quantify the resources of each of these resources so that I can compare their projections with others.  The lack of data in this regard makes that task daunting.  I do want to make one observation.  Figure 18, Projected Installed Capacity (top) and Annual Electricity Generation (bottom), shows huge increases in bioenergy installed capacity in both scenarios.  However, note that the annual generation for those categories is small.  I cannot imagine a business case for developing that kind of capacity for such limited output so I believe it is likely that bioenergy will have to be heavily subsidized to make it available as they propose.

Transmission

E3 explains:

New investments in transmission will be needed to enable the delivery of 100% zero-emission electricity, including:

• • • • • Local transmission upgrades to integrate new renewable resources
        • Additional transmission to deliver renewable resources from other regions, especially Quebec, into New York
        • Bulk transmission capacity from upstate New York to downstate load centers

Although New York has started the process of adding bulk transmission capacity it is not clear how much more will be needed.  I have yet to see anyone explain if any of the off-shore wind will be considered in-city generation for reliability purposes.  The DPS White Paper on CES procurements to implement the Climate Act includes a proposal for a Tier 4 procurement to encourage will directly extend financial support for renewable energy delivered into the New York City control zone but that discussion did not address in-city generation requirements.

 Firm Capacity

E3 explains that “Firm capacity is the amount of energy available for power production which can be guaranteed to be available at a given time. As the share of variable resources like wind and solar grows substantially, firm capacity resources will be needed to ensure year-round reliability, especially during periods of low renewables output.”

Firm capacity allows the system to have adequate resources available during prolonged periods of low renewable energy output. I agree with the E3 description that “The State’s need for firm resources would be most pronounced during winter periods of high demand for electrified heating and transportation and lower wind and solar output”.  E3 says that the hourly loads in their analysis are based on six years of historical weather 2007-2012.  I asked E3 what monitoring locations were used but never heard back.  I believe these data are from the National Weather Service climatological sites.  If that is the case they are not representative of the whole of New York and that NYS Mesonet data available from every county in the State should be used instead.

Conclusion

The first proposal to meet the Climate Act targets that was presented to the Climate Action Council can only be considered an overview.  The E3 analysis does not impress me.  While their models give the veneer of respectability to the projections, the reality is that the inherent over-simplifications of their models under-estimates the difficulties of the transition in New York and gives a false sense of security to their assurances that implementation will succeed.

Despite the limitations, the analysis does make important points.  I agree with their conclusion that the transition will “change the timing and magnitude of consumers’ electricity demands and create a “winter peaking” system in New York, owing to new demands from electric space heating”.  They point out that a multi-day period of low renewable energy availability will be a particular problem in the winter and state that: “Firm capacity is the amount of energy available for power production which can be guaranteed to be available at a given time. As the share of variable resources like wind and solar grows substantially, firm capacity resources will be needed to ensure year-round reliability, especially during periods of low renewables output.”

After their presentation to the Climate Action Council, members asked E3 about the use of renewable natural gas as one of the firm capacity resources.  Apparently, some believe that renewable natural gas is not a renewable energy resource according to the Climate Act.  Be that as it may, I suspect that E3 has found that without sufficient firm capacity resources the only alternative to maintain reliability will be extraordinary amounts of energy storage.  Energy storage is very expensive and E3 might have included renewable natural gas energy to limit energy storage use to keep the costs down.

Although E3 claims to bring “clear, unbiased analysis to the critical issues facing the energy industry today” I don’t think that is possible to be unbiased and work for the New York Climate Action Council.  New York’s Climate Act is predicated upon the belief that decarbonization is only a matter of political will.  Unfortunately, that belief is inconsistent with the firm capacity challenge for the winter peak.  It will be interesting to see how the Council deals with inconvenient issues that challenge the notion that this transition is not pushing the envelope of electric system reliability.