Air Permit Applications and the Climate Act

The implementation strategy for New York’s Climate Leadership and Community Protection Act (Climate Act) is being finalized by the Climate Action Council  in 2022.  Because the schedule is so ambitious the Council has been pushing for the implementation of policies even before the strategies are finalized.  This post addresses the New York State Department of Environmental Conservation (DEC) proposed policy DAR-21: The Climate Leadership and Community Protection Act and Air Permit Applications that is supposed to establish the procedures staff will use to review permit applications with respect to the Climate Act.  This turns out to be another example of the Climate Act putting the cart before the horse.

I have written extensively on implementation of the Climate Act because I believe the ambitions for a zero-emissions economy outstrip available renewable technology such that it will adversely affect reliability and affordability, risk safety, affect lifestyles, will have worse impacts on the environment than the purported effects of climate change in New York, and cannot measurably affect global warming when implemented.   The opinions expressed in this post do not reflect the position of any of my previous employers or any other company I have been associated with, these comments are mine alone.

Climate Act Background

The Climate Act establishes a “Net Zero” target by 2050. The Climate Action Council is responsible for preparing the Scoping Plan that will “achieve the State’s bold clean energy and climate agenda”.  The Climate Act requires the Climate Action Council to “[e]valuate, using the best available economic models, emission estimation techniques and other scientific methods, the total potential costs and potential economic and non-economic benefits of the plan for reducing greenhouse gases, and make such evaluation publicly available” in the Scoping Plan. Starting in the Fall of 2020 seven advisory panels developed recommended strategies to meet the targets that were presented to the Climate Action Council in the spring of 2021.  Those recommendations were translated into specific policy options in an integration analysis by the New York State Energy Research and Development Authority (NYSERDA) and its consultants.  The integration analysis was used to develop the Draft Scoping Plan that was released for public comment on December 30, 2021. The public comment period extends through at least the end of April 2022, and will also include a minimum of six public hearings. The Council will consider the feedback received as it “continues to discuss and deliberate on the topics in the Draft as it works towards a final Scoping Plan for release by January 1, 2023”.  Once that is complete the Energy Plan will be revised to set the state’s energy policies. The goal of the Energy Plan process is to “map the state’s energy future by showing how the state can ensure adequate supplies of power, reduce demand through new technologies and energy efficiency, preserve the environment, reduce dependence on imported gas and oil, stimulate economic growth, and preserve the individual welfare of New York citizens and energy users”.

The Proposed Policy DAR-21: The Climate Leadership and Community Protection Act and Air Permit Applications describes “the content of analyses required by the Division of Air Resources (DAR) pursuant to the requirements of Section 7(2) of the Climate Leadership and Community Protection Act (CLCPA). Chapter 106 of the Laws of 2019”. It further describes “the procedures staff in DAR will follow when reviewing those analyses for conformance with the requirements of the CLCPA”. Finally, this policy “establishes the types of air pollution control permit actions required to prepare an analysis as part of the permit application process”.

My Comments

I submitted comments on the proposed rule.  My main concern is that if DEC refuses to permit individual existing air permit applications without considering whether the facility is needed for reliability then problems could occur.  Importantly, DEC has no such responsibility so they should work with the New York Independent System Operator (NYISO) to cover this concern.

The policy document outlines the requirements for analyses developed “pursuant to Section 7(2) of the Climate Leadership and Community Protection Act (CLCPA) in support of air pollution control permit applications”. The document notes that the CLCPA went into effect January 1, 2020 (Chapter 106 of the Laws of 2019). It also notes that the CLCPA also establishes a Climate Action Council that is given three years (by January 1, 2023) to finalize a Scoping Plan providing recommendations for meeting those limits, and requires the DEC to promulgate regulations on GHG emission sources within four years (by January 1, 2024) that will ensure those limits are met. I commented that this policy is putting the cart before the horse. It is inappropriate to require analysis before regulations are promulgated simply because no standards have been established.

Ultimately the problem with the guidance document can be traced back to the CLCPA presumption that a transition to net-zero can be accomplished by 2050 if only there is political will. The reality is that there are enormous technological challenges particularly for the mandated schedule. As a result, there is a gaping hole in the Scoping Plan because it does not include a feasibility plan for the specific technology and schedule that the Climate Action Council proposes. It is not clear to me when and how the organizations responsible for electric system reliability will review and sign off on an implementation plan. Until that happens it is inappropriate for DEC to put any limitations on fossil-fired generation.

My comments argued that it is obvious that there are serious limitations with existing technology and the aggressive schedule. The New York Independent System Operator (NYISO) 2021-2030 Comprehensive Reliability Plan is the most recent reliability study in New York. It states:

Moving to 2040, the CLCPA requires generation to be emission-free. The Climate Change Study looked at 100 x 40 (emission-free electric grid by 2040). It noted the significant amount of dispatchable resources that would be needed to meet that goal but did not describe the technology that would be able to provide a dispatchable resource, instead choosing to refer to generic dispatchable, emission-free resources. Not surprisingly, the Climate Change report found that a similar amount of dispatchable resources as the RNA case would be needed to maintain reliability under baseline assumptions. However, under CLCPA assumptions, the amount of dispatchable emission-free resources needed increases to over 32,000 MW in 2040, approximately 6,000 MW more than the total fossil-fueled generation fleet on the grid in 2021. The Climate Change Study noted that the current system is heavily dependent on existing fossil-fueled resources to maintain reliability and eliminating these resources from the mix “will require an unprecedented level of investment in new and replacement infrastructure, and/or the emergence of a zero-carbon fuel source for thermal generating resources” (emphasis added). The Climate Change Study did note that while the amount of installed capacity (MW) of dispatchable resources is significant, the amount of energy generated (MWh) required from such resources would likely not be significant, with the percent of total energy being in the range of 10% ― 20% range depending on the penetration level of intermittent resources.

This guidance and the Draft Scoping Plan don’t consider one component of the CLCPA. The Public Service Commission mandate in Public Service (PBS) CHAPTER 48, ARTICLE 4, § 66-p. Establishment of a renewable energy program (4) that states:

The commission may temporarily suspend or modify the obligations under such program provided that the commission, after conducting a hearing as provided in section twenty of this chapter, makes a finding that the program impedes the provision of safe and adequate electric service; the program is likely to impair existing obligations and agreements; and/or that there is a significant increase in arrears or service disconnections that the commission determines is related to the program.

Given that the Energy Plan has to consider the provision for safe and adequate electric service, and it will not be prepared until 2023, it is premature for DEC to pick any winning or losing technologies in this guidance or any other permitting decisions for that matter. I recommended that the effective data be made contingent upon the completion of an Energy Plan that meets PBS Chapter 48, Article 4, § 66-p. Establishment of a renewable energy program requirement for safe and adequate electric service. Because reducing emissions is so dependent upon electrification the electric service criterion is a good surrogate for all permitting activities covered by the guidance.

There is another aspect of NYISO) 2021-2030 Comprehensive Reliability Plan (CRP) report that the guidance should consider.  My comments highlighted some risk factors that threaten electric system reliability in the report.  The CRP states:

As generators age and experience more frequent and longer duration outages, the costs to maintain the assets increase. These costs may drive aging generation into retirement. A growing amount of New York’s gas-turbine and fossil fuel-fired steam-turbine capacity is reaching an age at which, nationally, a vast majority of similar capacity has been deactivated. As shown in Figure 11, by 2028 more than 8,300 MW of gas-turbine and steam-turbine based capacity in New York will reach an age beyond which 95% of these types of generators have deactivated. 

The impact of the unavailability of system resources can readily be seen through tipping point evaluations. While transmission security within New York City (Zone J) is maintained through the ten-year period in accordance with design criteria, the margin would be very tight starting in 2025 and would be deficient beginning in 2028 if forced outages are experienced at the historical rate, as shown in Figure 12. Transmission security within Long Island (Zone K) is also maintained through the ten-year period, with the slimmest margin in the first few years as shown in Figure 13. If forced outages are experienced at the historical rate the Long Island margin would be sufficient through the study period.

My comments pointed out that using history as a guide, there will be forced outages from these old generating resources.  Obviously not renewing permits will exacerbate this problem.

Replacement Permit Applications

Obliviously, DEC has rejected permits for new replacement generating facilities that addresses this risk factor.  This was outside the scope of the guidance document but is important for readers to understand. In the DEC’s “Notice of Denial of Title V Air Permit” for the Danskammer Energy Center (DEC ID: 3-3346-00011/00017) and its “Notice of Denial of Title V Air Permit” for the Astoria Gas Turbine Power Project (DEC ID: 2-6301-00191/00014), the DEC rejected the use of both hydrogen and renewable natural gas (RNG) as a 2040 compliance mechanism because the DEC labeled them “speculative” and “aspirational”. However, the Scoping Plan’s placeholder for a dispatchable, emission-free resource is hydrogen. Governor Hochul’s recent State of the State address proposes that New York position itself to compete for nearly $10 billion in federal funding for green hydrogen R&D under the federal infrastructure bill. Obviously, it is in the state’s best interest to preserve the option to use hydrogen in the future. In the meantime, the options to supplant the dispatchable energy from those facilities with energy storage and renewable energy alternatives are no less “speculative” and “aspirational”.   In my comments I argued that the proposed guidance must incorporate a process similar to that used for the Peaker Rule (6NYCRR Part 227-3) whereby the NYISO works with DEC to ensure reliability issues are addressed for any permit application affecting electric generation viability.

Conclusion

The zeal of the State of New York to implement the Climate Act before the plan is complete is endangering the security of the electric grid.  In particular, there are many generating units in the state and New York City in particular that are nearing the end of their useful life. I submitted comments arguing that the DAR-21 Guidance must be revised to incorporate electric system reliability considerations.  Firstly, as shown above there are reliability concerns related to existing electrical generators.  The guidance must not preclude continued operation of existing units.  Secondly, DEC should not prevent operators from developing modern generating units that are more reliable than the existing aging units.  Even if the state plans to shut down all fossil-fired units by 2040 the owners know that and it can be addressed with a permit condition.  Finally, the Energy Plan has to consider the provision for safe and adequate electric service at the same time that the Draft Scoping Plan is proposing the use of currently unavailable technology.  For all three reasons it is premature for any DEC application to limit, shut down or prevent upgrades at existing electrical generation facilities.