Another Example of Gamesmanship in the Climate Act Integration Analysis

I still have not figured out how to do guest posts.  Dietmar Detering from Nuclear New York has been digging into the economic assumptions used in the Climate Act Integration Analysis, sent me his latest analysis and asked if I would share widely.  We have collaborated on this post describing his analysis of the Draft Scoping Plan gamesmanship with numbers to “prove” value for the net-zero transition.

Detering is a member of Nuclear New York, independent advocates for reliable carbon-free energy.  His organization strongly supports nuclear power as a necessary component of any zero-emissions transition because it is the only scalable proven zero-emissions technology available.  After growing up on a dairy farm in Germany, Dietmar Detering earned his Ph.D. in political science in 1999 at Münster University. He then moved to New York City and built an online event publishing business (EventMe! Inc.), which he still runs. He has served in volunteer leadership roles with several community organizations while raising two daughters with his wife. Passionate about environmental protection since he was a teenager, Dietmar started focusing on nuclear power advocacy in 2018. Besides his activities in New York, he is also a member of Germany’s Nuklearia group.

Climate Act Background

The Climate Leadership and Community Protection Act (Climate Act) establishes a “Net Zero” target by 2050. .  The Climate Action Council is responsible for preparing the Draft Scoping Plan that defines how to “achieve the State’s bold clean energy and climate agenda”.  They were assisted by Advisory Panels who developed and presented strategies to the meet the goals to the Council.  Those strategies were used to develop the Integration Analysis prepared by the New York State Energy Research and Development Authority (NYSERDA) and its consultants that quantified the impact of the strategies.  That analysis was used to develop the Draft Scoping Plan that was released for public comment on December 30, 2021.

Draft Scoping Plan Shortcomings

There are many obvious shortcomings of the CAC scoping plan/NYSERDA integration analysis.  The projections for renewable energy use exaggerated capacity factors for wind and solar, leading to vast underestimates of needed investments, land requirements and environmental impacts.  The future capacity projections also rely imported electricity from both clean sources and dirty sources.  It appears the projections are biased to underestimate the needed investments in solar, wind, battery, and hydrogen infrastructure.

Despite its proven capabilities there is no commitment to expand the use of nuclear energy.  In fact, there have been comments from working groups that argue that the existing power plants should be shut down sooner rather than later.

Detering and I share the concern that the Draft Scoping Plan does not recognize some practical implementation issues.  There is no appreciation of rural resistance to wind and solar build-out at the scale needed.  As word gets around about the massive buildout needed there will be more and more resistance.  Affordability is a major concern and the Draft Scoping Plan overestimate how much New Yorkers will be willing to pay for higher energy prices for the benefit of future generations in other countries.

The largest benefit claimed is associated with societal benefits of avoid carbon emissions.  I have shown that the Draft Scoping Plan manipulates emissions inconsistent with all other jurisdictions to increase benefits and incorrectly calculates avoided GHG emissions benefits by applying the value of an emission reduction multiple times.  Detering notes that the Integration Analysis uses a discount rate 3.6% per year for all of its economic projections. However, for social costs of carbon, it is using NY’s official $125/ton which is based on a 2% discount factor. Apples and oranges!

Gross State Product (GSP) Degrowth

The main point of this post is that Detering has uncovered a truly bizarre aspect of the NYSERDA Integration Analysis economic modeling. One of the key drivers of future energy use is how the GSP will change over time in the future.  The Key Drivers Outputs spreadsheet lists future annual GSP in the GSP table.   He confirmed that the spreadsheet explicitly uses 2020 dollars, for past and future years. 

Detering prepared a spreadsheet that incorporates the GSP data from the Key Drivers Outputs spreadsheet.  The spreadsheet shows an average 1.9% per capita GSP growth in the years back, but .84% for the future.  On the other hand, the text in Appendix G says that the Integration Analysis assumes a 1.9% growth of GSP (not per capita) and a .2% growth of population. It is not clear whether they are using nominal GSP numbers, which would explain the mismatch with the table, which uses 2020 dollars.  The point is that 1.9% GSP growth is a good number for real dollars (inflation-adjusted) but not nominal ones. The table shows that their growth assumption (in 2020 dollars) per capita practically drops by half (-55%).

He has checked this math and is confident about the assumed 55% drop in per capita GSP growth. The possible conclusions are all bad:

• NYSERDA’s Integration Analysis needs a low growth because GSP is linked to energy usage. Over 30 years, .84% translates to a 29% growth, but 1.9% means a 76% growth. Big difference – much less wind and solar to plan for, again!
• NYSERDA’s Integration Analysis assumes with a program like this, there is no way New York can pull off much more growth in incomes and wealth. High energy costs will drive jobs away and New Yorkers will be poorer as a result. Naturally, growth assumptions need to be reduced.
• It appears that NYSERDA’s Integration Analysis is yielding to degrowth ideas.
• This is a game of low expectations.  It allows the state to say 30 years from now: Look, the Climate Act wasn’t so bad for the state after all. We assumed annual per capita GSP growth of only .84% and we’ve gotten over .9% on average!

Conclusion

Jim Shultz recently described the text of the Draft Scoping Plan: “The plan is a true masterpiece in how to hide what is important under an avalanche of words designed to make people never want to read it”. Dietmar Detering and I have found that the Integration Analysis documentation spreadsheets are worse.  There are reams of numbers hiding the fact that the numbers really needed to explain the cost implications of the plan are not included.  There are only a handful of people who have dug into the complexities of the Draft Scoping Plan enough to understand the deceitful actions being taken to “prove” that the Climate Act transition will have benefits that out-weigh the costs. 

Detering’s analysis documents another game with the numbers in NYSERDA’s Integration Analysis.  In order to “prove” benefits out-weigh costs for the future net-zero energy system, there have been multiple games played to lower costs.  In this example, future load is reduced by using a lower growth rate for the economy.  This lowers the cost of the necessary wind and solar resources needed.