Climate Leadership & Community Protection Act Dispatchable Emission Free Resources Feasibility

Updated October 23 2020: Added a reference to a new Carbon Capture and Storage report.

On July 18, 2019 New York Governor Andrew Cuomo signed the Climate Leadership and Community Protection Act (CLCPA), which establishes targets for decreasing greenhouse gas emissions, increasing renewable electricity production, and improving energy efficiency.  I have summarized the schedule, implementation components, and provide links to the legislation itself at CLCPA Summary Implementation Requirements.  This post summarizes the status of possible technologies that could be used to meet the need for firm dispatch capacity or dispatchable emissions-free capacity.

I am following the implementation of the Climate Act closely because its implementation affects my future as a New Yorker.  New York State is trying to choose between many expensive policy options to meet the CLCPA targets while at the same time attempting to understand which one (or what mix) will be the least expensive and have the fewest negative impacts on the existing system. If they make a good pick then state ratepayers spend the least amount of a lot of money, but if they get it wrong then we will be left with lots of negative outcomes and even higher costs for a long time.  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.

Background

This post addresses the resources necessary to meet the CLCPA target of an emissions-free electric generating sector by 2040.  In order to assess the potential impacts on power system reliability in 2040 when meeting that target, NYISO contracted with ITRON and the Analysis Group to develop estimates of the necessary resources.  On October 8, 2020 Kevin DePugh, Senior Manager for NYISO Reliability Planning, made a presentation to the Executive Committee of the New York State Reliability Council that summarized their work and provides an estimate of the  Generation Capacity resource mix.  I think that the resources projected are mind-boggling:  35,200 MW of onshore wind, 21,063 MW of offshore wind, 10,878 MW of behind-the-meter solar, 29,262 MW of grid connected solar will be needed, energy storage of 15,600 MW, and winter price responsive demand of 3,412 MW.  Even with those projected capacities there is a category called Dispatchable Emissions-Free (DE) resources with a projected capacity need of 32,136.6 MW.

Ultimately, the problem is that no amount of additional renewable energy will provide electricity when the sun isn’t shining and the wind isn’t blowing.  In order to provide electrical energy during those periods the DE resources category was included.  DePugh described the following characteristics of this resource:

      • Large quantities of DE Resource generation are needed in a small number of hours
      • Substantial quantity of DE Resource capacity is needed, but the energy need is minimal
      • DE Resource must be able to come on line quickly, and be flexible enough to meet rapid, steep ramping need
      • On an average day, storage can meet evening peaks, but the DE Resource must generate if storage is depleted and renewable generation is low
      • In the Winter CLCPA scenario, the DE Resource output across the state must increase from 362 MW (1.1% of DE Resource nameplate capacity) to27,434 MW (85.4% of name plate capacity) in six hours of the most stressed day

The Analysis Group (AG) and NYISO have not offered any examples of a resource that meets these characteristics.  In fact, AG goes out of its way to not offer examples: “AG does not presume to know what resource or what fuel will fill this gap twenty years hence” and “The purpose of modeling it is to understand the attributes of the resource need”.  In their presentation to the Power Generation Advisory Panel on September 16, 2020 Energy and Environmental Economics (E3) included a slide titled Electricity Supply – Firm Capacity that said: “As the share of intermittent resources like wind and solar grows substantially, some studies suggest that complementing with firm, zero emission resources, such as bioenergy, synthesized fuels such as hydrogen, hydropower, carbon capture and sequestration, and nuclear generation could provide a number of benefits”.    I believe the E3 firm, zero emission resource is the same as the NYISO DE resource so these are potential sources of dispatchable, emissions free energy.

This post will address the complementing firm, zero emission resources examples mentioned by E3.

CLCPA Definition of Renewables

There are two relevant specifications in the language of the CLCPA.  The first defines “renewable energy systems” as “systems that generate electricity or thermal energy through use of the following technologies: solar thermal, photovoltaics, on land and offshore wind, hydroelectric, geothermal electric, geothermal ground source heat, tidal energy, wave energy, ocean thermal, and fuel cells which do not utilize a fossil fuel resource in the process of generating electricity.”  The language specifying the 2030 target states that a minimum of seventy percent of the state wide electric generation “shall be generated by renewable energy systems”.

The renewable energy systems definition is a continuing topic at the Climate Action Council meetings.  There are vocal members who insist on a strict interpretation of allowable electric energy resources.  However, the CLCPA also notes that “the commission shall consider and where applicable formulate the program to address impacts of the program on safe and adequate electric service in the state under reasonably foreseeable conditions. The commission may, in designing the program, modify the obligations of jurisdictional load serving entities and/or the targets upon consideration of the factors described in this subdivision.”  It will be interesting to see what happens if the strict interpretation of appropriate technology prevents safe and adequate electric service.

Hydropower and Nuclear Generation

Both hydropower and nuclear generation would be very useful as dispatchable emissions-free firm capacity.  However potential development of either resource in New York is limited.  New York already has extensive hydropower resources and that means there are only limited opportunities for any additional development.  I believe that it I unlikely that New York would consider building new nuclear generation while at the same time the state is shutting down viable existing nuclear generation.

Carbon Capture & Sequestration

There are several general issues with carbon capture & sequestration (CCS) technology for DE resources.  Firstly, the final clause in the renewable energy definition “which do not utilize a fossil fuel resource in the process of generating electricity” could apply to all the technologies rather than just the immediately adjacent technology “fuel cells”.  If that is the correct interpretation then CCS is off the table.

The second general issue is the engineering challenges of the technology itself.  While there already is technology to capture CO2 from gases it is another matter to capture CO2 in the hot and corrosive flue gas of a power plant.  Assuming that you can get over those hurdles then you need to store the collected CO2.  If the facility is near old oil and gas fields the CO2 can be used to enhance the recovery of the oil and gas.  To my knowledge this option is not available for New York so an alternative underground rock storage structure will have to be developed.

The final general issue is implementation in New York.  I will provide some anecdotal evidence for this issue.  In a vivid example of how far things have changed in New York, consider that Governor George Pataki’s Office of Regulatory Reform launched the Advanced Clean Coal Initiative in 2006, which sought to encourage the development of one or more clean coal facilities in New York to reduce New York’s dependence on petroleum.  As part of the initiative, the New York Power Authority (NYPA) issued a request for proposal for up to 600 MW electric generating capacity from a coal plant that would significantly reduce emissions and be built with the ability to capture and sequester carbon dioxide emissions.  Four companies submitted bids and my former employer NRG Energy was given a conditional award.  One of the incentives of the initiative was a purchase power agreement with NYPA and when the state figured out the costs necessary to support the project the whole thing was cancelled as too expensive.  In 2020 with the benefit of hindsight we see that was the right decision. As a result of the technology that New York banned (high volume fracking), the low price of natural gas made all of New York’s coal-fired power plants uneconomic.  The additional cost of the CCS would have made this project even more uneconomic.

Although I was not directly involved in my NRG’s carbon capture & sequestration (CCS) proposal, I learned that there were implementation problems with any carbon capture and sequestration project from colleagues who were involved.  New York regulators have a recent history opposing pipelines because of the potential for leaks and contamination.  I believe that the pipeline transport and pumping process would spark the same irrational reaction as fracking produced.  The NRG project had difficulty finding locations where it could be sequestrated in western New York.  Another problem the project faced was that there was no precedence for liability protection if the sequestered CO2 leaked.  Who would get sued, the state, operator, or land-owner?

In conclusion, the fact that despite a lot of effort there are only a few CCS projects suggests that the technology is still an issue.  Coupled with New York limitations this may not be a viable DE resources alternative.

Update (10/23/2020): On October 22, 2020 the Energy Futures Initiative (EFI) and Stanford University released “An Action Plan for Carbon Capture and Storage in California: Opportunities, Challenges, and Solutions,” a report providing policymakers with options for near-term actions to deploy carbon capture and storage (CCS) to meet the state’s climate goals.  According to the press release there are some key takeaways from the report:

      • California’s economy would see rapid near-term emissions reduction benefits from CCS;
      • The state has a strong foundation for supporting CCS projects, and the study has identified 76 facilities suitable for carbon capture;
      • California’s geology makes it well suited for safe, permanent CO2 storage; and
      • California could prioritize CCS projects that have demonstrable local air quality benefits and local job opportunities in line with the state’s climate and equity goals

A few comments. I have not studied this report but it may disprove my assertion that the technology is still an issue.  However, in order to use this technology for the CLCPA, New York would have to do a similar study to identify suitable sites for carbon capture and areas with suitable geology for storage.  However, the CLCPA electric power target in 2040 mandates zero emissions and this technology does not eliminate GHG emissions only reduces them significantly.  Unfortunately, this is still not a viable technology.

Bioenergy

In my summary description of the October 8, 2020 Climate Action Council meeting I noted that there is a controversy related to the use of bioenergy and renewable natural gas (RNG).  In this instance I assume that bioenergy refers both to the use of bio-mass as a fuel and methane from biological processes the so called RNG. Similar to the CCS option the interpretation of the CLCPA language could exclude these resources as an option because they are not explicitly included.  For example, opponents of RNG claim that because it is not listed then it is not a renewable energy source.   If that is the correct interpretation then RNG and other forms of bioenergy are off the table.

Renewable natural gas is pipeline quality natural gas derived from renewable energy resources. According to a July 2019 report by the consulting firm MJ Bradley and Associates entitled “Renewable Natural Gas: Potential Supply and Benefits” the most common sources of RNG today include landfills, animal manure, and wastewater treatment plants and additional sources include food waste, agricultural waste, and woody biomass.

In the DE resources context, the advantage of RNG and other forms of bioenergy is that they can be used with existing infrastructure to generate electricity as a dispatchable resource.  Because the sources are renewable, the presumption is that this resource is carbon-neutral.  If the RNG is stored then it will be available during the periods of low wind and solar energy output.  Another advantage is that using the methane generated from the sources listed helps reduce the waste streams.

On the other hand, there are vocal members of the Climate Action Council that are adamantly opposed to its use.  The basis for this opposition is the methane obsession of Dr. Robert Howarth in which he claims that due to the higher global warming potential of methane and his estimates of fugitive emissions, no additional sources of methane should be encouraged.

As I said this is controversial.  A major issue is that if the programs that use RNG are no longer considered good state policy there are many on-going projects and programs that are no longer viable.  For the companies that have invested in the technology to use RNG expecting to profit from its value as a renewable energy source those investments will be lost.  Unless, of course, their reductions are considered “renewable” by other jurisdictions.  Perhaps the project will end up selling the credits they earned elsewhere so New York gets no benefits.

Hydrogen

One superficially attractive approach to the need for storable energy is to use electrolysis to produce hydrogen when there is surplus wind and solar electric production.  It also appears attractive because when the hydrogen is burned it generates no pollutants, only water. On the other hand, hydrogen is an element that does not exist in nature and that is the first of many complicating issues.   While the theory is fine in practice there are many problems with using hydrogen.

One study by Bossel, Eliasson, and Taylor gives a good overview of those problems.  The study notes that, “like any other product, hydrogen must be packaged, transported, stored, and transferred to bring it from production to final use”.  They found that heating value per volume is less than a third of methane.  That means that more energy is needed to package it in more complicated tanks than what is used for oil and gas.  In order to transport hydrogen by pipeline a new system would be needed because of “diffusion losses, brittleness of materials and seals, incompatibility of pump lubrication with hydrogen and other technical issues”.  Storage is an issue which is the consequence of the low energy density of hydrogen and the weight of the pressure vessels.  Before it can be used it has to be transferred from storage and that requires energy to empty the pressurized hydrogen container for use.  Bossel, Eliasson, and Taylor conclude that:

We have to accept that hydrogen is the lightest element and its physical properties do not suit the requirements of the energy market.  The production, packaging, storage, transfer and delivery of the gas are so energy consuming that other solutions must be considered.  Mankind cannot afford to waste energy for uncertain benefits; the market economy will always seek practical solutions and, as energy becomes more expensive, select the most energy-efficient.  Judged by this criterion, the elemental “Hydrogen Economy” can never become a reality.

One other aspect of hydrogen needs to be considered.  When hydrogen is mentioned as a fuel source the first impression of many people is the picture of the Hindenburg dirigible’s hydrogen exploding.   It is an odorless, colorless gas.  Because hydrogen is an element it is difficult to store and prone to leak.  I am not confident that the public will accept widespread use of an undetectable explosive gas that is leak prone.

Conclusion

One of the case studies for the NYISO analysis of the resources needed to meet the 2040 emissions-free electric power generation target includes a category called Dispatchable Emissions-Free (DE) resources with a projected capacity need of 32,136.6 MW.  The E3 pathways analysis for the CLCPA Climate Action Council notes that “As the share of intermittent resources like wind and solar grows substantially, some studies suggest that complementing with firm, zero emission resources, such as bioenergy, synthesized fuels such as hydrogen, hydropower, carbon capture and sequestration, and nuclear generation could provide a number of benefits”.  This analysis looked at the potential of those firm, zero emission resources to meet the 32,136.6 MW capacity projected need.

The prospects are not good to meet the 2040 target.  Despite the critical need for these resources to maintain reliability, the technological readiness issues of the options, New York siting constraints for the alternatives, and practical capability of the resources suggest that this may be an insurmountable hurdle.  Moreover, some of the more vocal Climate Action Council members have an ideological interpretation of the CLCPA law that places further constraints on potential resources.  From what I have heard at the CLCPA implementation meetings so far, I don’t think the enormity of this problem, much less the need for pragmatic interpretation of the law, is recognized.

FERC Carbon Pricing Policy Statement

On October 5 Anthony posted my article on the Federal Energy Regulatory Commission (FERC) technical conference regarding Carbon Pricing in Organized Wholesale Electricity Markets held on September 30, 2020.  On October 15, 2020 FERC proposed a policy statement to “clarify that it has jurisdiction over organized wholesale electric market rules that incorporate a state-determined carbon price in those markets. The proposed policy statement also seeks to encourage regional electric market operators to explore and consider the benefits of establishing such rules.” This post alerts WUWT readers to the opportunity to provide comments on that policy statement.

Policy Statement Comments

According to the FERC press release:

The proposed policy statement follows the September 30, 2020, technical conference at which participants identified a diverse range of potential benefits from proposals to integrate state-determined carbon pricing into the regional markets. Those benefits include the development of technology-neutral, transparent price signals within the markets and providing market certainty to support investment.

States are taking the lead in efforts to address climate change by adopting policies to reduce their GHG emissions. Currently, 11 states impose some version of carbon pricing, and other entities, including the regional markets, are examining this approach. Participants at the technical conference said carbon pricing is an example of an efficient market-based tool to incorporate state public policies into regional markets without diminishing state authority.

Today’s proposal finds that regional market rules incorporating a state-determined carbon price can fall within the Commission’s jurisdiction over wholesale rates. However, determining whether the rules proposed in any particular Federal Power Act (FPA) section 205 filing do fall under FERC jurisdiction will be based on the specific facts and circumstances. The Commission is seeking comment on the appropriate information to consider when reviewing such a filing, including:

        • How do the relevant market design considerations change depending on the manner in which the state or states determine the carbon price? How will that price be updated?
        • How does the FPA section 205 proposal ensure price transparency and enhance price formation?
        • How will the carbon price or prices be reflected in locational marginal pricing?
        • How will the incorporation of the state-determined carbon price into the regional market affect dispatch? Will the state-determined carbon price affect how the regional market co-optimizes energy and ancillary services?
        • Does the proposal result in economic or environmental “leakage,” in which production may shift to more costly generators in other states, without regard to their carbon emissions? How does the proposal address any such leakage?

The Commission invites comments on this Proposed Policy Statement by November 16, 2020 and reply comments by December 1, 2020. Comments must refer to Docket No. AD20-14-000, and must include the commenter’s name, the organization they represent, if applicable, and their address in their comments.

 

Comments, identified by docket number [AD20-14-000], may be filed electronically at http://www.ferc.gov in acceptable native applications and print-to-PDF, but not in scanned or picture format. For those unable to file electronically, comments may be filed by mail or hand-delivery to: Federal Energy Regulatory Commission, Secretary of the Commission, 888 First Street, NE, Washington, DC 20426.

 

Policy Statement

If you want to participate in a process where your comments could affect policy I encourage you to read the policy statement itself.  I will summarize its contents below.

The policy statement starts with a background section.  It notes that states are currently leading the charge to address climate change by adopting policies to reduce their greenhouse gas emissions (GHG) and frequently focus on the electric sector.  It notes that:

Carbon pricing has emerged as an important, market-based tool in state efforts to reduce GHG emissions, including efforts to reduce GHG emissions from the electricity sector. In this proposed policy statement, we use the term “carbon pricing” to include both “price-based” methods adopted by states that directly establish a price on GHG emissions as well as “quantity-based” approaches adopted by states that do so indirectly through, for example, a cap-and-trade system.

The policy statement notes that even though the “Commission is not an environmental regulator” they still have to address proposals that incorporate a state-determined carbon price into Regional Transmission Operators (RTO) or Independent System Operators (ISO) markets.  They conclude that carbon pricing is not unlike other filings that they address so this should be no different.

In the discussion section they “clarify that the Commission has the jurisdiction over RTO/ISO market rules that incorporate a state-determined carbon price in those markets.”  Then they go on to argue that “it is the policy of this Commission to encourage efforts to incorporate a state-determined carbon price in RTO/ISO markets”.  I am not going to try to interpret their legal arguments justifying this policy.

In the sub-section titled “Commission Encouragement of Efforts to Incorporate a State-Determined Carbon Price into RTO/ISO Markets” the policy statement says:

As noted, on September 30, 2020, the Commission held a technical conference on the integration of state-determined carbon pricing in RTO/ISO markets. Participants at the conference identified a diverse range of potential benefits that could arise from such a proposal. Those benefits include the development of technology-neutral, transparent price signals within RTO/ISO markets and providing market certainty to support investment. In addition, participants explained that carbon pricing is an example of an efficient market-based tool that incorporates state public policies into RTO/ISO markets, without in any way diminishing state authority.

We agree that proposals to incorporate a state-determined carbon price in RTO/ISO markets could, if properly designed and implemented, significantly improve the efficiency of those markets. Accordingly, we propose to make it the policy of this Commission to encourage efforts by RTOs/ISOs and their stakeholders—including States, market participants, and consumers—to explore establishing wholesale market rules that incorporate state-determined carbon prices in RTO/ISO markets.

The discussion concludes that:

The Commission will review any FPA section 205 filing that proposes to establish wholesale market rules that incorporate a state-determined carbon price in RTO/ISO markets based on the particular facts and circumstances presented in that proceeding.  Nevertheless, certain questions and issues are likely to arise in any such filing.

They specifically ask for comment on the questions listed in the press release quotation above that are the “appropriate information and considerations the Commission should take into account or whether different or additional considerations may be or must be taken into account” to “determine whether an RTO/ISO’s market rules that incorporate a state-determined carbon price in RTO/ISO markets are just, reasonable and not unduly discriminatory or preferential.”

Conclusion

For the denizens of this blog this is your opportunity to comment on something that could affect policy.  I suggest that those who are skeptical of the value of GHG emission reduction policies concentrate on whether a state-determined carbon price in RTO/ISO markets can be just, reasonable and not unduly discriminatory or preferential.

I intend to personally comment on the concerns I raised in my personal blog post on the FERC technical conference.   The technical conference convinced FERC commissioners that carbon-pricing was an “efficient” market-based tool but nobody asked and no one proved that they work.  In my opinion the first rule of efficient policy is that it works.  I believe that those who support carbon pricing on theoretical economic grounds are overlooking or are unaware of practical issues I have raised.  Cynic that I am, I think the primary value to FERC and the RTO/ISO operators is that the carbon price makes their lives easier.  That it will have significant impacts on consumers and not do anything for the climate is somebody else’s problem.

Roger Caiazza blogs on New York energy and environmental issues at Pragmatic Environmentalist of New York.  This represents his opinion and not the opinion of any of his previous employers or any other company with which he has been associated.

 

8 October 2020 New York Climate Action Council Meeting

On July 18, 2019 New York Governor Andrew Cuomo signed the Climate Leadership and Community Protection Act (CLCPA), which establishes targets for decreasing greenhouse gas emissions, increasing renewable electricity production, and improving energy efficiency.  It was described as the most ambitious and comprehensive climate and clean energy legislation in the country when Cuomo signed the legislation.  I have summarized the schedule, implementation components, and provide links to the legislation itself at CLCPA Summary Implementation Requirements.  This post summarizes my impression of the fourth meeting of the Council.  Summaries of other meetings are available here.

I am following the implementation of the Climate Act closely because its implementation affects my future as a New Yorker.  The Climate Action Council is trying to choose between many expensive policy options to meet the CLCPA targets while at the same time attempting to understand which one (or what mix) will be the least expensive and have the fewest negative impacts on the existing system. If they make a good pick then state ratepayers spend the least amount of a lot of money, but if they get it wrong then we will be left with lots of negative outcomes and even higher costs for a long time.  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.

According to the Climate Action Council website: “The New York State Climate Action Council is a 22-member committee that will prepare a Scoping Plan to achieve the State’s bold clean energy and climate agenda”.  The co-chairs and ten of the members are representatives of state agencies and authorities.  The remaining ten members were chosen by politicians. Advisory panels and the Just Transition Working Group will help develop the scoping plan.

The meetings provide insight to the direction of the massive energy transition required by the Climate Act.  The meetings are run formally with a role call at the beginning, approval of minutes, and votes on any decisions.  The following is a description of the meeting and my impressions.  Meeting materials are provided here:

Co-Chair Remarks and Reflections

With only a couple of exceptions all the members of the Climate Action Council are either political appointees or were vetted and approved by the Cuomo Administration.  As a result, I should not be surprised that the remarks and reflections at all the meetings to date have included a brag list of all the latest initiatives and project announcements of the Cuomo Administration.  All the meetings have also worked in at least one example of a recent event that the co-chairs link to climate change.  Department of Environmental Conservation Commissioner Seggos had the honors at this meeting when he talked about western wildfires.  The bigger story line was the Climate Week summit and all the actions by New York’s agencies, authorities, and partners that were released as part of the publicity associated with that event.

Status Reports

This agenda item was titled “Advisory Panel and Working Group Chairs Report-out on Work Plans” and consisted of a status update by each of the chairmen of the panels and groups charged with supporting the Climate Action Council.  Each presentation listed the scope of their work plans.  Because some of the issues included are relevant to more than one panel each chair described those interactions.    Each presentation also included a timeline and plans for external engagement.  Council members were given the opportunity to ask questions and make comments.

There was a wide range of detail provided.  In some cases, it could simply be a function of the charge of the advisory panel.  For example, there were four slides with scope items for the Agriculture and Forestry Advisory Panel and Land Use but only one slide for the Local Government Advisory Panel.  On the other hand, the Local Government Advisory Panel had the most detailed meeting timeline reflecting the direction of that panel’s approach. In other cases, the lack of detail could portend problems.  I consider the Power Generation Advisory Panel to be the most important because the prime de-carbonization strategy is to electrify everything.  Unfortunately, this presentation was the weakest.  Everyone else had a meeting timeline.  Six out of the eight presentations announced that their public outreach includes a designated email address for comments and questions.  Power Generation was one of the panels that did not include that option.  Furthermore, the external engagement slide for this panel had the least detail.

Waste Emissions

At the previous Council meeting there was a discussion about waste management issues.  The Cuomo Administration proposed that it be handled by DEC but the concern was raised that there would not be enough interaction with the public.  At this meeting DEC Commissioner Seggos proposed that another advisory panel for this issue be set up that would follow the same rules as the existing panels.  After a discussion the Council voted to add this panel.  It will have a lot of catching up to do because they won’t be able to decide on the membership until the next meeting on November 24.  It will be interesting to see if the scope for this panel will include disposal of solar panels and wind turbine blades.

I have been worried, and this meeting did not allay my concerns, that some members of Council have an agenda that seems to be more important to them than keeping the lights on and costs affordable.  As shown below there is a clear need for an energy resource that can be stored and then used when needed.  In order to help meet that need there are advocates for so-called renewable natural gas (RNG).  RNG is just the methane produced from anerobic digestion from different sources such as enteric fermentation from animal feeding, manure management, food waste, landfills, and sewage treatment plants.

This appears to be a major controversy for the Council.  Dr. Robert Howarth is the most vocal critic of methane in any form and helped draft the CLCPA language.  One interpretation of the law is that if the resource is not explicitly listed then they do not qualify as a renewable source.  That means some sources of methane are explicitly banned for use as a renewable fuel.  Howarth and others who agree with him are arguing against RNG.  For example, at 40:00 of the meeting recording, Raya Salter commented “Natural gas is, you know, a fossil fuel and would not qualify as a renewable fuel in the earth pursuant to the CLCPA renewable or not”.  A more rational view is that we have a waste management problem as well as a need for dispatchable energy and both could be addressed if RNG is classified as a renewable fuel.

Presentations

There were two presentations ostensibly to bring the Council members up to speed on a couple of relevant topics.  Rich Dewey from the New York Independent System Operator (NYISO) described their electric system planning process and Tammy Mitchell from the Department of Public Service (DPS) gave an overview of the transmission and distribution system.  While both presentations were valuable, they were overviews and did not provide much detail.

Rich Dewey, President of the NYISO gave an overview of the planning process used to maintain system reliability.  If you want a good overview of where New York stands I recommend the presentation. Dewey’s slides included the following statements:

      • We believe State policy goals can be achieved while maintaining grid reliability.
      • The NYISO’s wholesale markets can serve as an effective platform for achieving New York State environmental objectives.
      • The plan includes a set of market design enhancements that work together coherently and efficiently to satisfy New York’s changing grid reliability needs.

In general, I think those statements ignore some very real problems.  As described below there is a particular resource adequacy problem that I think determines feasibility of the plan to completely replace fossil-fired generation.  Not surprisingly the NYISO argues that the wholesale markets can solve environmental issues and drive the changes needed to the electrical system necessary to implement the changes needed for the CLCPA.  I am not as sure but will leave my arguments about that for another post.

I have previously described what I think is ultimate problem with the CLCPA, namely what non-emitting power sources will be able replace the loss of intermittent wind and solar energy when electricity is needed the most during the winter.  The NYIOSO describes those power sources as Dispatchable Emission-free Resources and describes them as “Large quantity of installed dispatchable emission free resources needed in small number of hours”, and “Dispatchable resources must be able to come on line quickly, and be flexible enough to meet rapid, steep ramping needs.”  Except for the emissions, those qualities perfectly describe fossil-fired peaking units.  While Dewey introduced the problem, I don’t think he adequately described the challenges of this problem that could endanger compliance with the CLCPA targets.

Tammy Mitchell (DPS) described Planning for a Grid in Transition. She provided overview information describing the transmission and distribution systems, rate cases, the status of costs and reliability today, and then listed all the necessary new resources that have been identified to date.  The DPS will develop transmission and distribution plans to meet the CLCPA goals early next year.  Presumably then the State’s electric utility companies will be required to implement those plans.  In my opinion, that is a license for the Cuomo Administration to bury CLCPA costs to make it harder for them to be held accountable and pass the buck on cost increases to the utility companies who will take the blame in the minds of the ratepayers.

DEC also provided an agency status update.  DPS & NYSERDA held a Technical Conference on Transmission Planning pursuant to the Accelerated Renewable Energy Growth and Community Benefit Act.  There will be public comment hearings on Part 496 and the public comment period will end later in October.  They expect the guidance document from DEC on the Value of Carbon by the end of October and there will be seven public comment hearings on Office of Renewable Energy Siting proposed rulemakings in November.

One last note.  At the last Council meeting there were suggestions for adding members to the advisory panels.  Nothing was said about that at this meeting.

Conclusion

The RNG waste energy controversy concerns me.  The obsession of some members of the Council appears to over-ride common sense.  I suspect that every possible source of non-fossil fuel energy is going to be needed to keep the lights on.  While I may be wrong, it seems obvious that rather than limiting any of those resources now it might be more appropriate to wait to see what is needed.  If I am wrong then banning RNG might not be such a big deal.  If I am right, then banning it now not only makes it more difficult to keep the lights on but also does nothing to help deal with waste management of the sources of methane.

Climate Leadership and Community Protection Act and the NYISO Climate Change Impact Study

The New York Independent System Operator (NYISO) manages New York’s power grid and wholesale electric markets.   That responsibility not only includes the day-to-day management but also extends to long-term planning.  As part of the latter charge NYISO commissioned two studies of climate change impacts on power system reliability in New York.  These studies provide valuable insight into the scale of change necessary to implement the electric system transition necessary to meet the Climate Leadership and Community Protection Act (CLCPA) targets for emission reductions and renewable energy development.

NYISO 2020 10 08 Transmission IncreasesI am following the implementation of the Climate Act closely because its implementation affects my future as a New Yorker.  Various state entities are trying to choose between many expensive policy options to meet the CLCPA targets while at the same time attempting to understand which one (or what mix) will be the least expensive and have the fewest negative impacts on the existing system. If they make a good pick then state ratepayers spend the least amount of a lot of money, but if they get it wrong, then we will be left with lots of negative outcomes and even higher costs for a long time.  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.

Background

In order to assess the potential impacts on power system reliability in 2040 associated with system changes due to climate change and policies to mitigate its effects, NYISO contracted with ITRON and the Analysis Group. Previously I described those reports and explained that I think further work is needed before we can be assured that solar and wind resources will be sufficient to meet load requirements.  Both studies also addressed the effects of New York’s CLCPA targets for decreasing greenhouse gas emissions, increasing renewable electricity production, improving energy efficiency and aggressive schedule that I have documented in CLCPA Summary Implementation Requirements

Itron developed long-term energy, peak, and hourly load projections that address the potential effect of climate change and the CLCPA. According to an Itron blog post that report identified “historical weather trends across more than 20 weather stations in New York State”. That information was used to drive system and planning area load models. They noted that “complicating factors include continued growth in behind-the-meter solar generation, increasing proliferation of electric vehicles and state policy to address climate change through electrification”.  The final report included two long-term hourly zonal-level load forecasts that reflect state policy goals and climate effects.

In the second phase the Analysis Group used the Itron load forecasts to evaluate system impacts and develop a plan to meet the CLCPA targets.  According to the Executive Summary in the draft Climate Change Phase II Study, it is “designed to review the potential impacts on power system reliability of the (1) the electricity demand projections for 2040 developed in the preceding Climate Change Phase I Study, and (2) potential impacts on system load and resource availability associated with the impact of climate change on the power system in New York (‘climate disruptions’).” The NYISO Electric System Planning Working Group meeting on September 10, 2020 included an overview summary presentation by the Analysis Group for the report.

Reliability Planning

On October 8, 2020 Kevin DePugh, Senior Manager for NYISO Reliability Planning, made a presentation to the Executive Committee of the New York State Reliability Council that emphasizes the results in the context of reliability planning.  The second phase report is supposed to consider potential effects of climate change and climate policy on the ability of the Bulk Power System to serve load and meet reserve requirements under a variety of conditions. However, the study is not an “extensive reliability study and will not include Resource Adequacy or Transmission Security”.

The modeling year is 2040 when all electric generation is required to be emissions free.  The generation resources estimate used the CLCPA resources announced to date as a starting point but resources were added to meet the load projections from Itron.  Itron accounted for climate change by assuming a 0.7 degrees F per decade increase in average New York state temperatures. In their reference case they made assumptions about energy efficiency and electric vehicle charging.   In their CLCPA case they assumed increases in energy efficiency, increases in electric vehicle charging load, and increases in residential and commercial building electrification to estimate the load in 2040.

The NYISO is evaluating four cases.  Itron developed a “Reference Case” and the “CLCPA Case” and the Analysis Group developed a set of electric generation resources to meet the needs of a reliable system in 2040.  NYISO’s Grid in Transition (GIT) study also produced two cases with different generation (notably including natural gas power plants) and transmission infrastructure resources.  Importantly, “Each case includes in the resource sets a generic resource, the role of which is to identify the attributes of any additional resources that may be needed to avoid or reduce Loss of Load Occurrences (LOLO)”. The report labels them as dispatchable and emissions-free resources (DE Resources).  Note that they “may include technologies under development or yet to be developed”.

The analysis considers the location of generation and the transmission needed to get that energy to where it is needed.  The GIT resource sets did not include any expansion of the Transmission System except for the two projects already on the books.  The Analysis Group cases included significant transmission increases to relieve 90% of transmission constraints”.

Hourly Load and Generation Balance

The presentation included a graph of the hourly load and generation balance for the winter wind lull physical disruption case.  (For a discussion of the Analysis Group physical disruption cases see my previous post.)  The graph shows the output from each generating resource against the predicted load for 30 days in the winter that includes a period of low wind resources.  While I don’t believe this is necessarily the worst case it does show a seven-day period when the projected nuclear, hydro, renewable resources, imports, price responsive demand and battery storage resources are insufficient to meet load demand.  In that period DE resources are needed to meet load.

The generation capacity resource mix for the climate change phase II (CCP2), CLCPA case is extraordinary.  Consider the changes from current levels for renewables.  At the end of 2019 the total New York State wind nameplate capacity was 1,985 MW but this case projects that 35,200 MW will be needed which is the National Renewable Energy Lab (NREL) projected total technical potential land-based capacity.  Governor Cuomo has announced offshore wind targets totaling 9,000 MW by 2035 but this case projects a need for 21,063 MW by 2040 which is another technical potential estimate limit.  There are 6,000 MW of solar by 2025 in the CLCPA targets but this projection estimates that 10,878 MW of behind-the-meter solar and 29,262 MW of grid connected solar will be needed.  New York’s target for energy storage is 3,000 megawatts deployed by 2030 and the case calls for 15,600 MW.  There is no specific goal for demand response but the plan calls for winter price responsive demand to equal 3,412 MW.  Even with all those mind-boggling projected capacities the DE resources capacity needed is 32,136.6 MW.

Dispatchable & Emissions Free Characteristics

Ultimately the problem is that no amount of additional renewable energy will provide electricity when the sun isn’t shining and the wind isn’t blowing.  In order to provide electrical energy during those periods NYISO has DE resources.  DePugh’s presentation lists the following characteristics of this resource:

      • Large quantity of DE Resource generation are needed in a small number of hours
      • DE Resource has low capacity factor (~12%) during the winter
      • DE Resource has only a 3.7% capacity factor in the summer
      • DE Resource is not needed at all during spring and fall
      • Substantial quantity of DE Resource capacity is needed, the energy need is minimal
      • DE Resource must be able to come on line quickly, and be flexible enough to meet rapid, steep ramping need
      • On an average day, storage can meet evening peaks, but the DE Resource must generate if storage is depleted and renewable generation is low
      • In the Winter CLCPA scenario, the DE Resource output across the state must increase from 362 MW (1.1% of DE Resource nameplate capacity) to27,434 MW (85.4% of name plate capacity) in six hours of the most stressed day

The Analysis Group and NYISO have not offered any examples of a resource that meets these characteristics.  In their presentation to the Power Generation Advisory Panel on September 16, 2020 Energy and Environmental Economics (E3) included a slide titled Electricity Supply – Firm Capacity that says: “As the share of intermittent resources like wind and solar grows substantially, some studies suggest that complementing with firm, zero emission resources, such as bioenergy, synthesized fuels such as hydrogen, hydropower, carbon capture and sequestration, and nuclear generation could provide a number of benefits”.    I believe the E3 firm, zero emission resource is the same as the NYISO DE resource so these are potential sources of dispatchable, emissions free energy.  E3 stated 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)”

I will leave a discussion of the likelihood of these resources for another time.

Observations

The DePugh presentation on the climate change studies makes the following observations (with my italicized comments).

      • Climate disruption scenarios involving storms and/or reductions in renewable resource output (e.g., due to wind lulls) can lead to loss of load occurrences. No comment.
      • The variability of meteorological conditions that govern the output from wind and solar resources presents a fundamental challenge to relying on those resources to meet electricity demand. As a result, it seems to me that a study specifically addresses this variability by looking at historical data is appropriate.
      • Battery storage resources help to fill in voids created by reduced output from renewable resources, but periods of reduced renewable generation rapidly deplete battery storage resource capabilities. Long-term energy storage is necessary for the transition but pumped storage hydro is the only proven technology available.
      • The DE resources needed to balance the system in many months must be significant in capacity, be able to come on line quickly, and be flexible enough to meet rapid, steep ramping needs. This is an instance where proven technology is unavailable.
      • The assumed increase in inter-zonal transfer capability in the CCP2 resource sets enables a renewables-heavy resource mix and improves reliability, but also increases vulnerability to certain climate disruption scenarios. I don’t worry as much about climate disruption affecting the transmission system as their concern that so much transmission will be needed that any weather-related interruptions will be a problem for the system.
      • Cross-seasonal differences in load and renewable generation could provide opportunities for renewable fuel production. I believe this is a suggestion that a wind and solar could be used to generate synthetic fuel in the shoulder months which is another unproven technology.
      • 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. This conclusion should be the fundamental concern of everyone involved with CLCPA implementation.
      • Overall, the key reliability challenges identified in this study are associated with both how the resource mix evolves between now and 2040 in compliance with the CLCPA, and the impact of climate change on meteorological conditions and events that introduce additional reliability risks. This is another conclusion that should be at the forefront of those implementing the CLCPA even if the primary concern should be weather extremes not the tweaking effect of climate change in the next 20 years.
      • Comparing the CCP2 resource sets to the GIT resource sets reveals key differences in how the system makeup in 2040 can affect reliability outcomes. The differences are the result of the GIT resources using fossil-fired resources.

Conclusion

The CLCPA presumes that there is nothing aside from political will holding back implementation of an energy transition to clean, affordable, reliable, and resilient electric power by 2040.  However, the NYISO presentation says that eliminating existing fossil-fueled resources 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”.  It also notes that DE resources “include technologies under development or yet to be developed”.  The International Energy Agency recently published “Special Report on Clean Energy Innovation” that concludes that innovation is necessary for jurisdictions and companies to fulfill their de-carbonization targets.  Obviously, the CLCPA implementation plans should define a minimum acceptable technological readiness level for their recommended implementation strategies.

I don’t know what kind of reality slap will be needed to wake up those charged with developing the CLCPA scoping plan that the proposed energy transition is not simple or easy.  At the latest Climate Action Council meeting members were arguing that the CLCPA should not count bio-fuels as accepted renewables.  On the basis of these studies I think it is premature to reject any dispatchable emissions free resources, especially one that has some history of success.

Finally, note that the NYISO studies and the E3 pathways study do not mention cost or the expected lifetimes of the renewable technologies.

 

NYISO Climate Change Impact Studies

The New York Independent System Operator (NYISO) manages New York’s power grid and wholesale electric markets.   That responsibility not only includes the day-to-day management but also extends to long-term planning.  As part of the latter charge NYISO commissioned two studies of climate change impacts on power system reliability in New York.  While the studies provide valuable information, I think further work is needed before we can be assured that solar and wind resources will be sufficient to meet load requirements.

I have two degrees in meteorology, am a retired certified consulting meteorologist accredited by the American Meteorology Society, have over 45 years experience as a practicing meteorologist, and have been working in the electric utility business since 1981.  The contents of this post are based on that background and experience.  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.

Background

In order to assess the potential impacts on power system reliability in 2040 associated with system changes due to climate change and policies to mitigate its effects, NYISO contracted with ITRON and the Analysis Group. In today’s New York it is necessary to address the political presumption that the effects of climate change are being felt today so a primary goal was to address that concern.  New York’s Climate Leadership and Community Protection Act (CLCPA) has targets for decreasing greenhouse gas emissions, increasing renewable electricity production, improving energy efficiency and an aggressive schedule as I have documented in CLCPA Summary Implementation Requirements.  Both studies also addressed the effects of this climate policy on the future electric system.

Itron developed long-term energy, peak, and hourly load projections that address the potential effect of climate change and the CLCPA. According to an Itron blog post that report identified “historical weather trends across more than 20 weather stations in New York State”. That information was used to drive system and planning area load models. They noted that “complicating factors include continued growth in behind-the-meter solar generation, increasing proliferation of electric vehicles and state policy to address climate change through electrification”.  The final report included two long-term hourly zonal-level load forecasts that reflect state policy goals and climate effects.

In the second phase the Analysis Group used the Itron load forecasts to evaluate system impacts and develop a climate resiliency plan.  According to the Executive Summary in the draft Climate Change Phase II Study, the “Phase II Study is designed to review the potential impacts on power system reliability of the (1) the electricity demand projections for 2040 developed in the preceding Climate Change Phase I Study, and (2) potential impacts on system load and resource availability associated with the impact of climate change on the power system in New York (“climate disruptions”). The NYISO Electric System Planning Working Group meeting on September 10, 2020 included a presentation by the Analysis Group that gives a good overview.

Climate Change

The original intent of these projects was to consider the effects of climate change on the electric system.  Iton claims that their forecasts “reflect the potential continuation of such weather trends during the next 30 years” corresponding to the implementation period of the CLCPA 2050 target.  Analysis Group considers potential impacts of “climate disruptions” on the electric system.  However, I think their projections actually represent something else.

Contrary to popular opinion, teasing out the effect of climate change presumed to be inextricably linked to GHG concentrations from natural climatic variation is a controversial topic in the meteorological community. The Analysis Group climate disruptions “include items that could potentially occur or intensify with a changing climate and that affect power system reliability, such as more frequent and severe storms, extended extreme temperature events (e.g., heat waves and cold snaps), and other meteorological events (e.g., wind lulls, droughts, and ice storms).”  Invariably in my experience a purported climate signal is, in reality, just a weather extreme.  All these “climate disruptions” fit that bill.

Bottom line is that while both studies provide valuable information the projections represent extreme weather more as a result of natural variability than any climate effect due to global warming.  The key point is that these weather impacts have to be considered to adequately represent future load.  The fact that I consider the climate change signal small compared to natural weather variability is irrelevant for the results.

Analysis Group Renewable Resource Approach

While I applaud the results provided by the Analysis Group, I don’t think it should represent the final word on the effect of weather on wind and solar resource availability.  I will explain my problems with what they did and offer my suggestion for what is needed below.

The Analysis Group estimated what electric generating resources will be necessary to meet the projected loads predicted by Itron. The primary goal was to estimate the generating and transmission infrastructure necessary to meet the CLCPA 2040 target to eliminate the use of fossil fuels for electricity generation.  Importantly, the emphasis was on the viability of a resource mix to meet this target and they repeatedly point out that their estimate is just one of many possible pathways to the goal.  Their electric system modeling is described in a recent presentation.

The draft report explains that there are three core elements to the modeling approach.  The first element is the load forecasts from the Phase I study.  The second element is the development of resource sets for two scenarios representing the climate change impacts and inputs from another NYISO study on the grid in transition.  The starting point for the resource allocations was earlier NYISO work based on New York’s announced procurement goals.  “This resource set alone is insufficient to meet demand; thus, the analysis adds renewable generating capacity, storage capacity, transmission capability, and Dispatchable Emission-free (DE) resource capacity in quantities sufficient to meet the seasonal peak demand.”  My primary interest is the third core element: “Climate Disruption Scenarios”.

According to the final report:

 “These climate disruptions are used to define seasonal ‘cases’, which are run through the energy balance model to identify any reliability risks associated with operations under those conditions. The results of the model identify the magnitude, frequency and duration of any periods where available generation was potentially insufficient to meet load over the duration of the seasonal modeling period, or where significant storage or DE resource output is needed to supplement renewable generation.”

The report developed these extreme-weather or physical disruption events to simulate conditions that “increase demand and/or reduce or eliminate the availability of renewable resources and transmission infrastructure.”  Table 12 Description of Physical Disruption Modeling Events from the draft Phase II study lists ten types of events that could physically disrupt the electric energy generation system in 2040 when it is strongly dependent upon wind and solar resources.  I will focus on the treatment of meteorological inputs on solar and wind output for these events below.

The biggest single weather factor on load is temperature.  Heat waves and cold snaps are the primary cause of peak loads.  In this analysis the meteorological conditions for these temperature extremes were adjusted as follows:

“Heat waves are modeled using the following model adjustments:

        • Load ‐ High temp 90° F or above for seven days, with daily zonal load increase of between 0 percent and percent 18.7 percent
        • Wind Generation ‐ 20 percent decrease for seven days
        • Solar Generation ‐ use solar profile from hottest day in Y2006 for seven days
        • Transmission ‐ five percent decrease for seven days

Cold waves are modeled using the following model adjustments:

        • Load ‐ Low temp of 0° F or below for seven days, with daily zonal load increase of between 2.3 percent and percent 25.6 percent.
        • Solar Generation ‐ Use solar profile from coldest day in Y2006 for seven days”

Three wind “lulls” physical disruption events were evaluated: just Upstate, just Off-shore and state-wide.  To evaluate potential variability, Analysis Group evaluated historical National Renewable Energy Laboratory (NREL) daily wind data from 2007 to 2012 to estimate the wind generation output.  Three sites representing upstate and offshore production were used: Niagara, Plattsburgh, and the offshore Empire Wind Zone.  The analysis found 19 wind lulls in the summer and only three in the winter.  In order to evaluate the effects on loads they adjusted the high load periods developed in Phase I as follows:

“Summer wind lulls are modeled using the following model adjustments:

          • Wind Generation ‐ 15 percent Average Capacity Factor in all Zones for 12 days
          • Wind Lull overlaps the 12‐day period with highest load

Winter wind lulls are modeled using the following model adjustments:

          • Wind Generation ‐ 25 percent Average Capacity Factor in all Zones for seven days
          • Wind Lull overlaps the seven‐day period with highest load”

I am not going to spend much time commenting on the remaining five disruptions considered.  The analysis considered four storm events: hurricane/coastal wind storm, severe wind storm upstate, severe wind storm offshore, and an icing event.  In all the cases they simply made assumptions about how the load, wind and solar resources would be affected and times for recovery.  The final disruption was a drought and that was assumed to reduce hydro output 50% for 30 days.

Critique

My primary concern as a meteorologist is the availability of renewable energy resources.  The question is just how much wind and solar energy is potentially available every hour.

According to the Analysis Group final report

“The generation profile, in terms of hourly capacity factors, assumed for the solar units are based on 2006 data from the NREL Solar Power database using 62 simulated solar farm sites across New York State. Two Zones did not have solar farm data. For Zone D BTM solar, a simple average of bordering Zones F and E was used. For Zone K utility solar, the BTM solar data from Zone K was uprated by the average ratio of utility to BTM solar NYCA‐wide.  The hourly capacity factors assumed for the wind units are based on 2009 data at simulated 100 meter turbine height from the NREL’s Wind Toolkit Database, using 721 weather sites in NY. A summary of renewable resource capacity factors by season is listed in Table 6. As shown, solar capacity factors are higher on average in the summer modeling period than in the winter, and wind capacity factors are higher on average in the winter than in the summer.”

The NREL Solar Power database consists of one year (2006) of 5-minute solar power and hourly day-ahead forecasts for approximately 6,000 simulated PV plants including 62 in New York.  NREL generated the 5-minute data set using the Sub-Hour Irradiance Algorithm that produces global horizontal irradiance (GHI) values.  The sub-hour algorithm produces “coherent sub-hour datasets that span distances ranging from 10 km to 4,000 km”. The algorithm “generates synthetic GHI values at an interval of one minute, for a specific location, using SUNY/Clean Power Research, satellite-derived, hourly irradiance values for the nearest grid cell to that location and grid cells within 40 km”.   Combining satellite cloud data and a probability distribution it estimates one of five cloud classifications which are used to generate the solar irradiance value.

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 precipitation and clouds, that can affect solar resources many miles from the lake shore. It is important that the solar resources be evaluated based on geographically representative short-term data and I do not believe that the NREL approach adequately addresses this concern.

On the other hand, their approach for wind data is acceptable.  They have more stations included and wind speed fields are generally well connected as opposed to discontinuous lake-effect clouds.  As a result, the data used are adequately representative.  However, there is a problem with the Analysis Group physical disruptions analysis.  They only looked at light wind disruption of wind energy output.  Because wind turbines have a high wind speed cutoff there could also be reductions if the winds are too fast.

Finally, there is a major flaw in the approach.  Analysis Group makes assumptions about the effects on wind and solar output for each physical disruption on its own.  In reality a study that considers the joint distribution of wind and solar energy impacts from weather events is needed.  This isn’t even possible using the NREL data sets they used because they are for different years.

I did my own analyses of the renewable resource availability for two short periods using observed data for summer peak energy storage requirements and winter peak energy storage requirements. My guesses for the generating resources were extremely crude but I think the approach should be the next step check on the feasibility of renewable resource dependency.  In particular, I used historical meteorological data and estimated wind and solar output relative to observed load for the same time periods.

When I started my analysis, I expected that the winter observed peak load would occur during very cold weather associated with a slowly moving high pressure system that originated in the cold northern plains large enough to cover the entire northeastern US.  The resulting multi-day period of clear skies, light winds, and inherent cold temperatures would result in very high energy demand for heating at the same time the wind resource was weak.  In my example high load period in early January 2018 conditions were very different.  Weather maps for this period show (January 2018 Weather Maps) a relatively small high-pressure system in the central US on January 2 that moved east ahead of a storm system on January 3.  The high pressure was strong enough over the New York offshore wind region that winds were less than 3.5 m/s for five hours on January 3.  However, the storm system moved eastward and re-developed into a strong storm just off the coast on January 4 with an eleven-hour period of greater than 25 m/s wind speed 13 hours after the light wind period ended.  By January 5 the storm had raced northeast to the Canadian Maritimes but was pumping cold air back across New York State.

This period shows why actual data must be analyzed in more detail by New York State to determine whether the CLCPA requirements endanger fuel and energy security.  The actual solar irradiance irrespective of cloudiness was low in this period because it was near the winter solstice.  I assumed that the wind turbine low speed cutoff was 3.5 m/s and the high speed cutoff was 25 m/s.  If the assumptions I used for no wind power due to light winds and strong winds are correct then there will be 16 hours of no wind power in a 29-hour period during the coldest extended duration cold weather event that the Analysis Group identified after analyzing 25 years of data.  Furthermore, this period also overlaps fourth worst 3-day cold snap.

 Conclusion

The Itron Phase I and Analysis Group Phase II climate change studies provide valuable results and address my worries about the meteorological impacts on renewable energy resources.  However, I don’t think they go far enough to answer my fundamental concern that wind and solar energy might not be sufficient to power the state during the winter peak.

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.  In my opinion as a meteorologist living downwind of Lake Ontario, I don’t think the output from any cloud modeling approach has enough resolution to adequately simulate lake-effect clouds.  Therefore, the solar and wind resources should be evaluated using geographically representative short-term data so that site-specific temporal effects can be included.

I strongly recommend that meteorological data available from the NYS Mesonet meteorological system be used to determine the availability of wind and solar energy over as long a period as is available. The NYS Mesonet is a network of 126 weather observing sites across New York State so it can provide representative data for this kind of analysis.  If historical meteorological data are used to estimate solar and wind output against the observed load, suitably adjusted for climate and climate policy, then it will be a much better test than using the assumptions made by the Analysis Group to estimate how the meteorology might affect renewable output.

Climate Leadership and Community Protection Act Defeatism

On July 18, 2019 New York Governor Andrew Cuomo signed the Climate Leadership and Community Protection Act (CLCPA), which establishes targets for decreasing greenhouse gas emissions, increasing renewable electricity production, and improving energy efficiency.  This post addresses fundamental concerns raised about the CLCPA technology requirements and the framing of those concerns to the policy makers.

I am following the CLCPA closely because its implementation affects my future as a New Yorker.  Policy makers are trying to choose between many expensive policy options to meet the CLCPA targets while at the same time attempting to understand which one (or what mix) will be the least expensive and have the fewest negative impacts on the existing system. If they make a good pick then state ratepayers spend the least amount of a lot of money, but if they get it wrong, we will be left with lots of negative outcomes and even higher costs for a long time.  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.

The law established the Climate Action Council and gave them the responsibility to develop a scoping plan to meet the aspirational schedule and targets summarized at CLCPA Summary Implementation Requirements.  At the same time, the New York Independent System Operator (NYISO) is supposed to manage New York’s power grid and energy market to “coordinate and direct the flow of electricity over the state’s high-voltage transmission system”.  That management includes long-range planning responsibilities.  The NYISO is supposed to be “independent” and that would accordingly allow them to be critical of the CLCPA targets if their expertise leads them to believe that the schedule and targets threaten the reliability of the power grid and energy market.

I have previously described what I think is ultimate problem with the CLCPA, namely what non-emitting power sources will be able replace the loss of intermittent wind and solar energy when electricity is needed the most during the winter.  In the E3 presentation to the Power Generation Advisory Panel  on September 16, 2020 this issue was raised.  The slide titled Electricity Supply – Firm Capacity states: “The need for dispatchable resources is most pronounced during winter periods of high demand for electrified heating and transportation and lower wind and solar output”.  The slide goes on to say: “As the share of intermittent resources like wind and solar grows substantially, some studies suggest that complementing with firm, zero emission resources, such as bioenergy, synthesized fuels such as hydrogen, hydropower, carbon capture and sequestration, and nuclear generation could provide a number of benefits”.

On October 8, 2020 the Climate Action Council meeting included a presentation by Rich Dewey, President of NYISO, that gave an overview of their planning process used to maintain system reliability and raised the same concern.  The presentation included a description of Dispatchable Emissions-Free Resources (DER) that are needed to maintain reliability.  They were described as resources that must be able to come on line quickly when needed, and be flexible enough to meet rapid, steep ramping needs.  In other words, they are fossil-fired generating units without the emissions.  Dewey’s presentation slides concluded “The current system is heavily dependent on existing fossil-fueled resources to maintain reliability.  Eliminating these resources will require investment in new and replacement infrastructure, and/or the emergence of a zero-carbon fuel source for thermal generating resources.”

Dewey’s presentation was based on work by The Analysis Group’s NYISO Climate Change Phase II Study.  Their presentation at the NYISO Electric System Planning Group Meeting on September 10, 2020 had some important caveats regarding the CLCPA transition and Dispatchable Energy Resources.  The Analysis Group noted that “There is no historical precedent for this pace of renewable generation development and integration” referring to the CLCPA schedule.  They also noted that: The “DE Resource” category is included in the model to achieve reliable solutions” but stated that they did not “presume to know what resource or what fuel will fill this gap twenty years hence”.

For those who are new to New York energy policy politics it might seem odd that Dewey did not mention those caveats that reflect the enormity of the challenge facing New York’s CLCPA energy transition.  But for those of us who remember the last time that NYISO raised similar concerns it is not a surprise.  In 2016 NYISO filed comments with the state saying its goal to power the state with 50 percent renewable energy by 2030 was unrealistic unless a massive investment in new transmission lines were undertaken. In response, the Cuomo Administration pitched a fit.

Richard Kauffman, Cuomo’s “energy czar” at the time sent a  letter  in July 2016 to the NYISO that included the following:

“We are dismayed, however, that your recent filing to the Public Service Commission (PSC) and recent press reports on the Clean Energy Standard (CES) are misleading, incomplete, and grossly inaccurate. The filing reveals an alarming lack of developed analysis and understanding into the imperative to address climate change by transitioning to a clean electric system, and how a modern grid can be developed and operated. The NYlSO’s paradigm of analysis is outdated – a world where large power plants produce electricity based upon a fixed demand and where electrons flow in one direction. Thus, NYISO has not adequately taken into account the way new technology can balance electricity load in response to intermittency, to renewable resources or to dynamic price signals, nor has NYISO considered how market-based approaches to stimulate energy efficiency will change the amount of renewable energy needed to achieve the Governor’s 50 percent renewables goal by 2030.”

“It is apparent from the filing and subsequent information, that the NYISO is held captive by your stakeholders, the majority of whom represent the status quo interests that are threatened by the renewable future that New Yorkers want and deserve. Indeed your critique only makes sense in this context. It is, therefore, hardly surprising that in recent press reports, the Independent Power Producers, an industry advocacy group that represents the interests of fossil fuel producers, has been so quick to endorse the views of the NYISO when it appears that its interests are so well served.”

“The Public Service Commission has vast expertise in system planning and operations. They will no doubt work with all of the stakeholders to identify the challenges associated with the energy future we are designing. As necessary, we will find ways to address those challenges in a manner that is independent of the economic interest of incumbent fossil generators that you seem to be protecting. Again, I am dismayed by your filing and public comments. We want and expect better from our local grid operator.”

In that light it is no surprise that Dewey’s slides included the following statement: “We believe State policy goals can be achieved while maintaining grid reliability.”  The treatment of his predecessor no doubt affected the tone and content of his presentation.  There is no organization or agency better able to independently assess future alternatives for the electric system than the NYISO.  It is in the best interests of the State that the Climate Action Council and Cuomo Administration accept that they are independent and acknowledge their concerns even if it runs contrary to their ideological beliefs.

In conclusion, I wonder if the NYISO, or anyone else for that matter, can say anything to the Climate Action Council that suggests that the CLCPA goals and schedule are unrealistic.  The Analysis Group caveats and viability issues with the E3 list of potential resources to meet the DER adequacy problem need to be fully understood by all the Council members.  That information is not only complex and difficult to understand but also raises doubts about the practical viability of New York’s energy policy.  The fundamental tenet of the CLCPA is that there is nothing aside from political will holding back implementation of an energy transition to clean, affordable, reliable, and resilient electric power.  I believe that anyone raising questions about that will be accused of being defeatist and in the CLCPA war on climate such defeatism is tantamount to treason.

September 2020 FERC Carbon Pricing Technical Conference

The Federal Energy Regulatory Commission (FERC) hosted a technical conference regarding Carbon Pricing in Organized Wholesale Electricity Markets on September 30, 2020.  I had an overview post published at the Watts Up With That blog.  This post addresses potential implications of the conference on New York policy.

I first became involved with pollution trading programs nearly 30 years ago and have been involved in the Regional Greenhouse Gas Initiative (RGGI) carbon pricing program since it was being developed in 2003.  I have been following the New York carbon pricing initiative since that began.  I understand the basis of the rationale for a carbon price and understand some of the complexities associated with implementing such a program.  I write about the issues related to the energy and environmental interface from the viewpoint of staff people who have to deal with implementing these programs.  This represents my opinion and not the opinion of any of my previous employers or any other company I have been associated with.

Background

Carbon pricing is a climate policy approach that charges sources for the tons of carbon dioxide that they emit.  A Resources for the Future summary lists several attributes that they claim makes carbon pricing more attractive than other potential policies to reduce carbon dioxide emissions:

      • Carbon pricing allows emitters to choose the most efficient method to reduce emissions.
      • An economy-wide carbon price applies a uniform price on CO₂ emissions regardless of the source.
      • A carbon price encourages individuals and businesses to reduce their carbon emissions more than conventional regulations.
      • A carbon price creates a new revenue stream that can be used in a number of ways.

The problem is that there is a large gap between the elegant theory of carbon pricing and real world carbon pricing.  In theory applying a carbon price across the globe on all sectors could work as advertised but the reality of a carbon price for one sector in one limited area is that it is a regressive tax and a prescription for potential leakage and misapplied price signals.

        • Proponents have convinced themselves that somehow this is different than a tax but, in my experience working with affected sources, any carbon price is treated just like a tax and very rarely is it used to offset other taxes. It is paid by all who consume electricity including those who can least afford it so it is a regressive tax.
        • Pollution leakage refers to the situation where a pollution reduction policy simply moves the pollution around the globe rather than actually reducing it. Similarly, economic leakage is a problem where the increased costs inside the control area leads to business leaving for non-affected areas. There also is an economic leakage effect in electric systems where a carbon policy in one jurisdiction may affect the dispatch order and increase costs to consumers in another jurisdiction.
        • The revenue stream from a carbon pricing stream could be very large. In the classical theory those revenues are re-distributed to offset other taxes so that the consumers come out whole.  In practice all or part of the revenues have usually been diverted away from direct consumer rebates to fund carbon reduction programs.
        • If a carbon price is being used to fund reduction programs there is a fundamental problem. As CO2 is reduced revenues decrease and eventually either the carbon price has to increase to a very high level or the revenues used to fund reduction programs will insufficient.
        • Market participants don’t behave as expected by economic market theory so the markets don’t necessarily behave as the economists think they should. As a result, all the modeling and laboratory testing results should be viewed cynically.
        • The carbon price signal is inefficient. I think that the full cost for CO2 reduction options exceed the negative externality costs that are the rationale for the carbon price.
        • The carbon price signal is indirect. Because there are no cost-effective add-on controls for CO2 reductions, affected sources need to switch to a lower emitting fuel or be replaced in whole or part by alternative generation.
        • In order to replace firm, dispatchable capacity the total costs to make in-kind replacement with renewable wind and solar are high and often not included in carbon price planning.
        • Often overlooked are the daunting problems of the implementation logistics of a pricing program.
        • Finally, a real-world study by the Regulatory Analysis Project, Economic Benefits and Energy Savings through Low-Cost Carbon Management, raises additional relevant concerns about carbon pricing implementation. They basically conclude that if you want to reduce carbon emissions it is more effective to target your financing to get the biggest reduction bang for the buck than to set a carbon price.

The September conference was held in response to requests for a technical conference to address this topic.  According to FERC:

“The purpose of this conference is to discuss considerations related to state-adoption of mechanisms to price carbon dioxide emissions, commonly referred to as carbon pricing, in regions with Commission-jurisdictional organized wholesale electricity markets (i.e., regions with regional transmission organizations/independent system operators, or RTOs/ISOs). This conference will focus on carbon pricing approaches where a state (or group of states) sets an explicit carbon price, whether through a price-based or quantity-based approach, and how that carbon price intersects with RTO/ISO-administered markets, addressing both legal and technical issues.”

My other post described the three panel discussions at the conference:

        • Legal Considerations for State-Adopted Carbon Pricing and RTO/ISO Markets,
        • Overview of Carbon Pricing Mechanisms and Interactions with RTO/ISO Markets, and
        • Considerations for Market Design.

Experts were invited to submit comments to FERC before the conference (available in the event details).  During the conference each expert gave an opening statement and then FERC Commissioners posed questions to the panelists.  There is an audio recording of the conference available and I added the approximate times of each speaker to a copy of the agenda here.

New York Participation

There were three panelists from New York.  Two panelists from the New York Independent System Operator (NYISO) participated. Richard Dewey, President & CEO, was a panelist on the Overview of Carbon Pricing Mechanisms and Interactions with RTO/ISO Markets panel and Rana Mukerji, Senior Vice President, Market Structures, was on the Considerations for Market Design panel.  If you recall the NYISO carbon pricing proposal it is not surprising that both their submittals and comments were more or less advertisements for their proposal and arguments supporting it.  Michael Mager, counsel to Multiple Intervenors, an association of approximately 60 of New York’s largest industrial, commercial, and institutional energy consumers, also participated in the Considerations for Market Design panel.

According to Dewey: “The NYISO firmly believes that its Carbon Pricing Proposal is the best option to maintain efficient competitive wholesale electricity market outcomes and to provide New York State with a powerful tool to achieve the CLCPA requirements. Carbon pricing in the NYISO’s wholesale markets has the strong advantage of signaling where new resources should locate for the highest value to the system and consumers. Internalizing a state-determined social cost of carbon dioxide emissions in the NYISO’s energy market pricing would send a meaningful financial investment signal to developers that identifies efficient ways to address State-mandated carbon emission reductions while more efficiently incenting resources to locate and perform according to the needs of the system.”

Mukerji said “In June 2019, the NYISO presented a complete Carbon Pricing Proposal to its stakeholders after nearly two years of stakeholder discussion and design effort. Reflecting a meaningful state/regional-determined price of carbon dioxide emissions in our wholesale electricity markets will allow the co-optimization of energy and ancillary services to develop least-cost solutions that maintain competitive markets and reliable operation of the electric system, while more fully considering the direct economic implications of state and regional initiatives to promote efficient market outcomes.”

Mager was unique amongst the panelists in that he represented electric consumers.  He has been immersed in the NYISO carbon policy development process and noted that “the development of a draft carbon pricing proposal within the NYISO stakeholder process revealed a number of areas of concern for large energy consumers that warrant consideration”.  He brought up four concerns:

        1. The appropriate scope of a carbon pricing program, specifically the concern that NYISO’s single-sector, single regional transmission organization proposal would cause leakage;
        2. How the carbon price would be calculated and updated;
        3. How the carbon revenues would be treated; and
        4. Whether carbon pricing can be implemented in a manner that protects consumers from double payments.

The first three concerns were addressed above.  The fourth concern is an implementation issue related to the fact that consumers are already paying for programs to reduce carbon emissions and it is a concern that adding an electric system carbon price will mean consumers pay for that and the old programs too.

Carbon Pricing Theory

The comments submitted by Joseph Bowring, independent market monitor for PJM, represented the majority opinion of the participants: “a market approach to carbon is preferred to an inefficient technology or unit specific subsidy approach or inconsistent RPS rules that in some cases subsidize carbon emitting resources”.  While I don’t disagree with the sentiment, I want to point out that it also represents a bias of most of the participants who work with electric markets.  Namely, a carbon price simplifies their lives because they only have to deal with one carbon policy and not a whole host of rules and subsidies that often have unintended consequences to the electric system.

Nearly every panelist who participated recognized that the theory of a carbon price works best across all sectors and, in this case, across all jurisdictions covered by FERC.  One thing that was missing in the conference was a discussion of the cutoff point the between the likelihood of success for a national carbon price across all sectors and the reduced possibility of success for the much more likely single-sector price in limited jurisdictions.

I do want to call out one carbon theory comment.  Dr. Matthew White, Chief Economist (ISO New England), noted during his comments (starting at the 3:25:55 mark of the audio) that as an economist he supported carbon pricing because “it can be simple, transparent and cost effective”.  He went on to claim that the experience with the Acid Rain Program supported carbon pricing: “To see this you don’t have to rely on economic theory you can look no further than our nation’s experience with the sulfur dioxide market and how that priced emissions over the last three decades. That program has effectively curbed our region’s acid rain problem as it did throughout much of the United States.  It has done so at far lower cost than policy makers anticipated and it presented no impediments to the nation’s electricity markets nor to my knowledge the system’s reliability.”

Unfortunately, Dr. White picked a poor example of a market-based program as a comparison to carbon pricing.  While there is no doubt that the Acid Rain Program (ARP) was responsible for massive reductions and did so at much lower than anticipated costs the key question is why did that occur.  There are cost-effective add on controls for SO2 and many facilities installed those controls but there aren’t any similar options for CO2.  One of the biggest unanticipated results of the ARP was fuel switching to coal with lower sulfur contents.  That was cost-effective because the railroads were de-regulated and it became economical to ship coal from Wyoming’s Power River Basin all over the country.  While fuel switching is a viable control option for CO2 the fact is that nearly all the coal and most of the residual oil generation in New York and New England has already switched so future reduction potential from fuel switching is small.  The supposition that the success of the ARP means that a carbon pricing scheme will be successful is not supported by the observed reasons for the ARP reductions.

Wolak Comments

I also want to highlight the comments submitted by Frank A. Wolak, Director, Program on Energy and Sustainable Development, at Stanford University as they relate to carbon pricing theory and New York policy.  He makes three points:

“First, carbon pricing is the “least cost” way to reduce the carbon content of an electricity sector, and of a national or global economy. Second, it is impossible to measure the carbon content of electricity imported into a regional wholesale electricity market from a neighboring control area. This fact has important implications for policies aimed at limiting GHG emissions leakage. Third, in an uncertain economic environment there is a difference between a carbon tax and a cap-and-trade market. This fact is increasingly relevant to regions with significant intermittent wind and solar generation resources.”

Wolak makes an interesting argument for the effectiveness of carbon pricing: “subsidizing green is a much more expensive way to reduce GHG emissions than taxing brown.” He explains that the subsidies used to build clean, green facilities ensure that they get built but does not guarantee emission reductions.  He points out that “the process of raising these revenues destroys economic value. Less of the product or service providing the subsidy is produced and consumed. The larger the subsidies paid, the greater the amount of economic value that must be destroyed to finance them.”  On the other hand, taxing emissions or “brown” makes it more expensive to produce GHG emissions. “The resulting higher price of goods and services that contain GHG emissions provides strong incentives to find the cheapest, least greenhouse-gas-emitting replacement.”  He claims that “The case for carbon pricing is clear relative to policies that subsidize less GHG-emissions-intensive energy sources. In fact, many studies even find that these subsidy policies increase national or global GHG emissions.”

His second point is especially important relative to the NYISO carbon pricing proposal.  He uses the current situation in the California market to argue that it is impossible to estimate out-of-jurisdiction carbon emissions.  He explains: “Measuring the carbon content of electricity produced in California is straightforward. The GHG emissions of all in-state generation units are measured in real-time. By contrast, with electricity imports, only the flows of energy into the state can be measured, not what color the electrons are—green, brown, or other shades in between.”   It turns out that trying to handle this has been “a source of never-ending debate among stakeholders”.  He concludes “The only definitive conclusion from this debate is that there is no right answer, except to have the geographic footprint of the carbon market be at least as large as the geographic footprint of the wholesale electricity market.” From what I have seen of the NYISO proposal for a New York only carbon price, it will engender the same amount of debate and lack of a right answer.

His third point concludes that carbon pricing is the least cost path to reduce GHG emissions and that “a carbon tax rather than a cap and trade market is likely to do this at a lower cost to consumers and less administrative burden in both the short and long term”.   In this context I agree but not for the underlying reasons he gives.  For the affected sources the reality is that carbon cap and trade markets are treated like a tax so all the administrative burdens just add to the cost.  From what I have seen many economists don’t realize that fossil-fired generators in de-regulated markets have very short-term outlooks and purchase allowances from a cap and trade program merely as a cost of doing business.  The future cost of carbon is not as important to their plans as economic theory would suggest and nobody is buying allowances as an investment strategy.

Conclusion

My ultimate problem with carbon pricing, in general, and the NYISO carbon pricing proposal, in particular, is that the reality of any carbon pricing scheme that can get implemented is nowhere near the global, all sector ideal.  Sadly no one at the conference offered a suggestion for a cutoff point that would ensure success in the range between the two extremes. As shown, there are a whole host of practical problems that have to be overcome for a carbon price to successfully reduce CO2 emissions, maintain affordability and preserve current reliability levels.  To date, NYISO has given short shrift to the practical concerns raised by Mr. Mager and myself.

There are vocal advocates for carbon pricing and their views were well represented at this conference.  I believe that those who support carbon pricing on theoretical economic grounds are overlooking or are unaware of the practical issues I have raised.  Most of the other supporters clearly have vested interests.  The electric system operators are simply looking for an easier way to deal with the admittedly ineffective and potentially dangerous to reliability policies currently in use.  Others smell a revenue stream and want to glom onto that money for their own interests.  As I have shown for NY that may not necessarily be the best thing for electric system consumers.

Mike Mager’s comments sums up the situation well: “In conclusion, the debate about the pros and cons of carbon pricing cannot be divorced from the numerous underlying, implementation-type issues, the resolution of which may have significant impacts on consumers.”

Principle 12 Glittering Generalities do not Represent Pragmatic Environmentalism

Ron Clutz writing at Science Matters defines a glittering generality as an emotionally appealing phrase so closely associated with highly valued concepts and beliefs that it carries conviction without supporting information or reason. He claims that such highly valued concepts attract general approval and acclaim.  I offer this as a principle of all that should not represent pragmatic environmentalism.

Nowhere is the glittering generality more evident than New York’s Climate Leadership and Community Act.  According to the Climate Act webpage: “Climate change is a reality. New York is fighting it.  Our future is at stake.”  All those claims fit the bill exactly as glittering generalities. 

The legislation itself includes the following glittering generalities.  It claims that the adverse impacts of climate change include: “an increase in the severity and frequency of extreme weather events, such as storms, flooding, and heat waves, which can cause direct injury or death, property damage, and ecological damage (e.g., through the release of hazardous substances into the environment); rising sea levels, which exacerbate damage from storm surges and  flooding, contribute to coastal erosion and saltwater intrusion, and inundate low-lying areas, leading to the displacement of or damage to coastal habitat, property, and infrastructure; a decline in freshwater and saltwater fish populations; increased average temperatures, which increase the demand for air conditioning and refrigeration among residents and businesses; exacerbation of air pollution; and an increase in the incidences of infectious diseases, asthma attacks, heart attacks, and other negative health outcomes.” 

In response to a NY Times Magazine / NY Times Daily Podcast storyHow Climate Migration Will Reshape AmericaPatrick T. Brown looked at the accuracy of similar claims.  Among other things his critique addresses storm severity, floods, and sea-level rise.  His critique concludes that “It paints a picture of current climate change in the US that is very different than the story that is told from looking at the actual observational data and all the errors are in the direction of overstating the negative impact on the US today.”  Nonetheless, New York’s energy policy and transition to the most aggressive clean energy and climate agenda in the country is based on these generalities.

Thanks to Ron Clutz and Patrick Brown for their work that inspired and supported this post.

This principle is one in a set of principles that I believe exemplifies pragmatic environmentalism which I suggest is the necessary balance of environmental impacts and public policy.  This means that evidence-based environmental risks and benefits (both environmental and otherwise) of issues need to be considered.  Unfortunately, public perception is too often driven by scary one-sided stories that have to be rebutted by getting into details. 

September 16, 2020 Climate Leadership Community Protection Act Power Generation Advisory Panel Meeting

In the summer of 2019 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.  This is another in a series of posts on the feasibility, implications and consequences of the CLCPA.  This post addresses the first meeting of the power generation advisory panel.

I am a retired electric utility meteorologist with nearly 40-years-experience analyzing the effects of meteorology on electric operations. I believe that gives me a relatively unique background to consider the potential quantitative effects of energy policies based on doing something about climate change.  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 have several concerns with the CLCPA potential effect on energy affordability and reliability.  I am convinced that the general public has no idea what is going on with these energy policies and the possible ramifications.  I do not believe that the CLCPA implementation process includes sufficient provisions for the general public to find out what this law will cost them until it is too late to prevent the inevitable higher costs of energy.  Contrary to the perception of “clean energy” advocates the transition away from fossil fuels is not simply a matter of political will.  There are significant implementation issues that imperil current reliability standards.

Background

Rather than repeat all the background information I have included in previous posts I have prepared CLCPA Summary Implementation Requirements and offer that if a reader wants more information.  In brief, the CLCPA establishes the New York state climate action council (CAC) that is required to “prepare and approve a scoping plan outlining the recommendations for attaining the statewide greenhouse gas emissions limits”.  That document will “inform the state energy planning board’s adoption of a state energy plan” and “shall incorporate the recommendations of the council”.

The CLCPA also provides for advisory panels to “provide recommendations to the council on specific topics, in its preparation of the scoping plan, and interim updates to the scoping plan, and in fulfilling the council’s ongoing duties”.  The CLCPA (§ 75-0103, 7) states that the CAC “shall convene advisory panels requiring special expertise and, at a minimum, shall establish advisory panels on transportation, energy intensive and trade-exposed industries, land-use and local government, energy efficiency and housing, power generation, and agriculture and forestry”.  I interpret that to mean that the membership of the panels will have specific expertise in those sectors.

New York State has an existing energy planning process.  The State Energy Plan is a comprehensive roadmap to build a “clean, resilient, and affordable” energy system for all New Yorkers.  It focuses on “reliably meeting projected future energy demands, while balancing economic development, climate change, environmental quality, health, safety and welfare, transportation, and consumer energy cost objectives”.  Importantly that process is integrated with the responsibilities of the New York Independent System Operator (NYISO), New York State Reliability Council (NYSRC) and Department of Public Service (DPS).  In my opinion, the requirement that the scoping plan “inform” the energy plan is a major risk.  It appears that the transition plan places as much value on the opinions of the CAC and advisory panels as the electric energy system professional staff at NYISO, NYSRC, and DPS who all have many years experience with all aspects of the reliability needs of the energy system.

I am only following the power generation advisory panel closely because of my concern that the membership of the CAC and advisory panel are not focused on reliability and affordability because of their background or naïveté.  I previously described the membership of the generation advisory panel in a post on the announcement of the membership of the advisory panels approved at the Climate Action Council meeting on August 24, 2020Meeting materials for all the advisory panel meetings have been posted.

This post describes their first meeting with a section on each of the major agenda items listed in the Power Generation Advisory Panel 9/16/2020 meeting materials.  John Rhodes, Chair of the Public Service Commission, is the chair for this advisory panel.  He presented most of the material.

Introductions and Panel Member Priorities

The Climate Action Council approved 14 members, a chairman and a co-chair to the power generation advisory panel but left open consideration to add more people at their August meeting.  There was no indication at this meeting that anyone would be added.  In my earlier post I documented the background and affiliations of the CLCPA Power Generation Advisory Panel.  I categorized the organizations represented by the 14 non-state agency members: three members work for generating companies, two renewable and one fossil oriented; one member is from the New York Independent System Operator, the state’s grid operating company; one member is a consultant for energy and sustainability issues; and the remaining eight members were from advocacy organizations representing either renewable technologies, the environment, or trade unions, with one representing ratepayers.

At this meeting each member was given the opportunity to introduce themselves and list their priorities for this process.  The introductions confirmed one of my concerns.  All but two of the members clearly plan to advocate for their organization or company in this process.  This is understandable but could very well not be in the best interest of the state.  Everybody had an opportunity to mention that their priorities include reliability and affordability but only four did so.  Only the representative of the New York Independent System Operator could be considered neutral for any particular technology and mentioned reliability and affordability as priorities.

State of the Sector

This part of the meeting listed the targets that have been codified into law. The “Alignment with CLCPA” slide is interesting because it starts to quantify the scale of the problem.  The slide estimates that in 2030 the estimated load will be 151,678 GWh.  The 2030 goal is that 70% of this load or 106,174 GWh will be met by renewable energy sources.  According to the slide we are currently generating 39,013 GWh and there are an additional 19,937 GWh of renewable energy under contract but not constructed.  That means that 47,224 GWh of renewable energy have to be contracted and constructed by 2030.  The slide breaks down the types of renewable energy resources into three categories: land-based renewables, offshore wind and distributed energy resources but the presentation did not explain how those numbers were derived.  The slide also states that there are 93 MW of energy storage currently operating but that the 1,400 MW of hydro storage are not included because “it does not count towards the goal”.  According to the slide 841 MW of energy storage is under contract and 2,086 MW of energy storage needs to be constructed and contracted by 2030.  It was not clear how the energy storage numbers were derived.

 

The remainder of this portion of the meeting described the Accelerated Renewable Energy Growth and Community Benefit Act (AREGCBA pronounced aargh) and Clean Energy Standard expansion. AREGCBA established the Office of Renewable Energy Siting who on September 16,2020 issued draft regulations.  While those regulations require permit application approval in a year there still are significant requirements for permitting that, in my opinion, will require a least a year to prepare.  The Clean Energy Standard includes an annual procurement target for off-shore wind of about 4,500 GWh from 2020 to 2023.  Note that in order to build off shore wind turbines on-shore infrastructure also has to be developed.   The enormous quantity of renewables that need to be contracted, permitted, and constructed by the end of 2029 so that renewable energy output meets the 2030 goal is an ambitious target to say the least.

Pathways Presentation

Energy + Environmental Economics presented the results to the Climate Action Council of their emissions reductions pathway analyses earlier this year.  This material was presented to the members of the advisory group at the meeting.  There were a few key takeaways.  E3 noted that “electrification of buildings and transportation drives significant increase in annual electric load” and that “NYS shifts from summer peak to winter peak around 2040, driven primarily by electrification of heating in buildings and EV battery charging”.

I worry that the members of the advisory group may not grasp the implications of issues mentioned in the “opportunities to decarbonize the electric sector” slide: “Energy efficiency and managed electrification will be critical to mitigating load growth and “peak heat” impacts”; “To decarbonize electricity supply, New York has access to a diverse portfolio of renewable resources”; “Battery storage and demand side flexibility can play a key role in intraday balancing”; and “A number of firm, zero carbon resources can help solve inter-day balancing challenges, e.g. multi-day periods of low renewable output”.  Each of these issues is complicated and uncertain.  Those who have a vested interest in a particular aspect of any of these issues also have a bias towards glossing over the complications and uncertainty to promote their interests.

There were two slides describing electricity supply considerations.  In order to discuss the impacts of these two slides would require its own post so that will have to wait.  Instead I want to highlight the Electricity Supply – Firm Capacity slide because it addresses what I think is the ultimate CLCPA problem.  The slide states: “The need for dispatchable resources is most pronounced during winter periods of high demand for electrified heating and transportation and lower wind and solar output”.  The slide goes on to say: “As the share of intermittent resources like wind and solar grows substantially, some studies suggest that complementing with firm, zero emission resources, such as bioenergy, synthesized fuels such as hydrogen, hydropower, carbon capture and sequestration, and nuclear generation could provide a number of benefits”.

The firm capacity slide prompted discussion.  E3 has been trying to come up with a list of resources that will address the problem of high electric loads when there is low renewable energy availability.  When they suggest firm, zero emission resources could provide a number of benefits what they are really saying is those resources are needed to keep the lights on.  They list five possibilities, three of which are unlikely to provide any meaningful relief in New York.   Meaningful additional amounts of hydro-electric power are unlikely because all the good locations have already been developed.  Carbon capture and sequestration projects require good locations for sequestration.  The Cuomo administration refused to permit a propane storage project adjacent to an already existing storage project so I cannot imagine that sequestration of CO2 would be permitted either even if suitable locations are found.  Nuclear would be a great option but New York is closing down viable, operating nuclear facilities so building a new facility seems highly unlikely.  Synthesized fuels such as hydrogen may have possibilities but there are enormous technical issues for hydrogen.  That leaves bioenergy.  However, a couple of people on the panel argued that because renewable natural gas (RNG), which refers to methane generated by anerobic digestion or by other means, is not specifically listed in the CLCPA, it does not qualify as a renewable option.  It was very obvious that those arguing against RNG had a bias against methane that was more important to them than solving the problem of firm capacity.

Work Plan Development

John Rhodes discussed the development of the work plan. Each advisory group has been charged to “develop sector specific strategies to achieve a 53% to 56% reduction in GHG emissions from 2016 level by 2030 (100% by 2050).  For the power sector, the 2030 target is that 70% of the electricity must be generated by renewable energy which complicates this panel’s planning a bit.  More importantly, the 2016 GHG emission levels consistent with the CLCPA rules have not been published.  In order for the advisory groups to do their work that estimate is needed soon.  The slide states that the advisory groups will “Present a list of recommendations for emissions reducing policies, programs or actions, for consideration by the Climate Action Council for inclusion in the Scoping Plan”.  It notes that the recommendations may be informed by quantitative analysis or qualitative assessment.  I hope that the recommendations rely on quantitative analysis because qualitative assessments may not maintain reliability.

There was an overview of the recommendations for the panel. The panels are supposed to “Evaluate the costs and benefits of recommended strategies, informed by the Value of Carbon established in accordance with Section 75 0113 of the CLCPA; Identify measures to reduce greenhouse gas emissions and co pollutants in disadvantaged communities; Include climate adaptation and resilience considerations; Consider approaches taken by different states and nations; and Identify potential sources of funding necessary to implement the recommended policies.”  There is an enormous challenge converting the New York electric system to unprecedented levels of renewable energy and I am not sure adding these additional requirements is consistent with that challenge.

The initial thoughts on “Scope Development” slide included the following topics: clean energy siting, transmission, electrification of buildings and transportation, natural gas system, carbon pricing, downstate peakers, equity issues, reliability of the future grid – storage, flexible/dispatchable resources, instate renewables, downstate renewables, “last” clean megawatts (final x%), resource transition/ramping fossils down, encouraging the needed investment, markets for the future (including resource adequacy), affordability, and jobs/prevailing wage.  Each one of these topics is complicated and warrants a briefing for the advisory panel members.  If they don’t understand the topic then they cannot incorporate these thoughts on their recommendations.

The last two slides address the timeline for the advisory panel.  I think the following schedule is quite an imposition on the members of the panel: October 2020: Work Plan finalized; December 2020: Briefing on priority policies/strategies; and March 2021: Final Recommendations to CAC.  By the end of October, they are supposed to seek written external input on priority policies and strategies, meet with the climate justice working group and the environmental justice advisory panel to get input on priority policies and strategies, and then present the work plan to the Climate Action Council.

Conclusion

The implementation process worries me and this meeting reinforced my concerns.  I am concerned about the development of recommendations for the power generation sector and the fact that necessary information to develop those recommendations is not available.

Since my retirement ten years ago I have spent a lot of time reading about the energy system and it was humbling how much I didn’t know about the system I had been supporting since I started working directly for a utility in 1981. Unfortunately, I think that the majority of the Climate Action Council and power generation advisory panel members have very little background in the sector. The schedule for the development of recommendations for a transformation of the power generation sector is aggressive and would be a challenge even for people with extensive backgrounds in the sector.  The schedule timeline is so short I worry that bringing the members up to speed on the technical constraint issues will necessarily be short-changed.  The magnitude of problem is huge and addressing just one issue, providing dispatchable, zero emission electric energy during multi-day periods of low solar and wind resources, is daunting.  It was clear on the call that more than one member of the advisory group has a particular agenda that seems to trump the overall need for reliable and affordable power.  Finally, it is not clear how the process is supposed to work when there are conflicting priorities.

Another serious issue with the schedule is the unavailability of some key information.  In order to provide defendable recommendations for the future power generation sector three data sets are needed.  New York State agencies have to provide a future load projection for the year as a whole and for the worst case, the multi-day period of low wind and solar availability.  The 2030 goal (70% from renewable sources) is only a function of the source of energy produced but very soon the Climate Action Council has to determine the current level of GHG emissions using the CLCPA methodology.  The draft state-wide emission limits based on 1990 emissions have been proposed but not finalized.  The emissions inventory for the current levels of emissions has not been released.  Finally, the wind and solar resource availability needs to be determined for the worst case.  In order to develop a power generation plan for the transition all this information needs to be known.

I intend to follow this to see how it works out.  Stay tuned.

New York Independent System Operator Siena College Carbon Pricing Poll

In an example of polling to achieve a desired public relations outcome, on September 28, 2020 the New York Independent System Operator (NYISO) and the Siena College Research Institute released a new poll of New Yorkers which they say found a large majority of respondents are in favor of incorporating a social cost of carbon dioxide emissions into competitive wholesale energy markets.  I have been following and commenting on the NYISO carbon pricing proposal since the beginning and I want to bring up some points that I think would have changed the outcome of the poll.

I first became involved with pollution trading programs nearly 30 years ago and have been involved in the Regional Greenhouse Gas Initiative (RGGI) carbon pricing program since it was being developed in 2003.  During that time, I analyzed effects of these programs on operations and was responsible for compliance planning and reporting.  I write about the issues related to the energy and environmental interface from the viewpoint of staff people who have to deal with implementing these programs.  This represents my opinion and not the opinion of any of my previous employers or any other company I have been associated with.

The basic problem with the Siena poll is that polling on carbon pricing to someone who probably has never heard about carbon pricing or the social cost of carbon (SCC) means that the description of those concepts can bias the results.  In this post I will provide background on carbon pricing and the SCC then discuss the poll itself to show that the description provided biases the poll answers.

Background

I recommend Bjorn Lomborg’s latest book titled “False Alarm: How Climate Change Panic Costs Us Trillions, Hurts the Poor, and Fails to Fix the Planet” and agree with most of his arguments.  His first recommendation for fixing climate change is to “effectively implement a tax on CO2 emissions.  He notes that “Most economists agree that the most effective way to reduce the worst damage of climate change is to levy a tax on CO2 emissions.”  The basic theory is that the true costs of CO2 emissions are not reflected in the cost to the consumer so the solution is to incorporate those costs with a carbon price.  Someday I will explain my issues with the theory of the approach and his reasoning but in this instance the only thing I want to discuss is his description of the carbon tax.  He states that the optimal climate policy requires a globally coordinated carbon tax.  In other words, he advocates a tax on all sectors that emit CO2 across the world.

I have been following the concept of carbon pricing for quite some time.  While I agree that the theory that setting a carbon price could lead to the least-cost decarbonization, I also believe that there are a whole host of practical problems that mean it won’t work as suggested by the theory.  That is especially true if the carbon price is not implemented globally across all sectors.  Those concerns include the following: leakage, revenues over time, theory vs. reality, market signal inefficiency, control options, total costs of alternatives, and implementation logistics.  I will discuss the most pertinent of these concerns to the NYISO carbon pricing proposal: leakage and market signal inefficiency.

Pollution leakage refers to the situation where a pollution reduction policy simply moves the pollution around geographically rather than actually reducing it.  Ideally you want the carbon price to apply to all sectors across the globe so that cannot occur.  Lomborg notes “that is possible only in a fairy-tale world” and that it won’t happen in real life.  As a result, a carbon price in one jurisdiction and not others will very likely cause leakage.  The NYISO carbon price proposal is proposed for just for the New York control area in a highly connected regional electric transmission grid that is designed to operate the lowest cost generation.  Any significant carbon price just in New York will incentivize generation outside New York simply moving the CO2 pollution elsewhere.  Note that it is even worse because the carbon price is only on the electric generating sector. Even worse, if the price gets too high then sources that stay in New York could generate their own electricity outside of the NYISO carbon price market.

Setting the market price is a controversial topic.  Lomborg explains how economists calculate the costs of carbon emissions today on the future.  The theory is that when you have calculated all the climate change costs then you can back-calculate the appropriate carbon price for today to prevent those future losses.  Lomborg strays from the carbon price orthodoxy by arguing that it is appropriate to balance the costs of the program against the climate change costs.  He calculates his carbon price estimates based on “creating the best possible world for the generations that succeed us; that is to create the maximum possible welfare for subsequent generations”.   He advocates a realistic, moderate, and increasing carbon tax policy that starts with a price of around $20 per ton and ends up at $270 per ton by the end of the century.  The NYISO carbon pricing proposes to use a carbon price value determined by New York State.

The Climate Leadership and Community Protection Act includes a provision that mandates the Department of Environmental Conservation develop a value on carbon.  I prepared a non-technical summary on the value of carbon or Social Cost of Carbon (SCC) earlier this year.  The law states that “The social cost of carbon shall serve as a monetary estimate of the value of not emitting a ton of greenhouse gas emissions”. The Social Cost of Carbon (SCC) is the present-day value of projected future net damages from emitting a ton of CO2 today.  The value chosen depends on a lot of assumptions and value judgements.  The Obama Administration Interagency Working Group (IWG) on the Social Cost of Carbon developed a 2020 value of about $50 per ton but the Trump Administration disbanded the IWG and stated that the estimates generated by the Interagency Working Group were not representative of government policy.  Currently, Federal projects use SCC estimates based on the same approach as the IWG that differ in two aspects: the only damages that were considered were those in the United States and different values were used to convert to present costs.  That value is only $7 per ton.

The NYISO claims benefits for their carbon pricing proposal based on the presumption that the funds received will be spent effectively or that the addition of the carbon price will change the viability of CO2 emitting plants relative to carbon-free plants.   I have evaluated the results of the investments made by regulatory agencies to date in New York’s existing carbon pricing program, the Regional Greenhouse Gas Initiative (RGGI).  The RGGI states have been investing investments of RGGI proceeds since 2008 but their investments to date are only directly responsible for less than 6% of the total observed reductions.  Furthermore, from the start of the program in 2009 through 2018, RGGI has invested $2,775,635,415 and reduced annual CO2 emissions by 3,091,992 tons.  The resulting cost efficiency, $898 per ton reduced, far exceeds the $50 per ton IWG SCC that represents the value of reducing CO2 today to prevent damages in the future.  It is also unlikely that the carbon price adder suggested will affect the economic viability of existing plants.

An even more controversial topic is what should be done with the proceeds.  In theory, the costs of the carbon price will be returned to the consumers so that this does not become a regressive tax.  However, I generally have doubts that the State of New York will return a revenue stream of any kind without taking some kind of cut or taking the all the money.  I am particularly worried that the Climate Leadership and Community Protection Act (CLCPA) advisory panels all seem to think that this revenue stream will be available to fund the projects they want developed to meet their sector targets.

The Poll Results

According to the NYISO press release, these were the key findings from the Siena College poll:

When respondents were first asked about the NYISO proposal, a plurality were in favor: 47% support, 36% oppose, and 17% don’t know/no opinion.

After learning more about the proposal and its benefits: 71% of respondents were more likely to support the proposal if they knew the proposal would replace the oldest, most polluting plants with cleaner, less polluting generators; 68% of respondents were more likely to support the proposal when told the growth in clean technology would benefit the state’s economy; 62% of respondents were more likely to support when told the proposal would reduce emissions in urban communities most impacted by power plant emissions; and 54% of respondents were more likely to support the proposal when told investments in new carbon-free energy would increase.

Respondents were then asked again how they felt about the proposal and support increased significantly: 62% support (+15 pts); 27% oppose (-9 pts); and 11% don’t know/no opinion (-6)

The poll, conducted by the Siena College Research Institute, also found that 79% of respondents support the 2030 and 2040 goals laid out in the Climate Leadership and Community Protection Act (CLCPA). Notably, that support extended across all ideological, race, sex, age, geographic, income and religious crosstabs.

The Poll Questions

I am skeptical of polling results because I believe that the poll questions can bias the responses to get the outcome desired.  The Siena Poll Questions provided by the NYISO clearly justify my skepticism.  I will list the questions used in the poll and provide my italicized comments for each.

Q33: Currently, NYS gets about 25% of its electricity from renewable sources.  Do you support or oppose the goal of NYS getting 70% of its electricity from renewable sources by 2030, increasing to 100% from zero-emitting sources by 2040?

I have not been able to get to the Siena College Research Institute web page because it took too long to respond.  The label suggests that there were questions before this one.  If those questions discussed renewable energy it could certainly color the response to this question. 

 More importantly, there is an error in this question. The CLCPA includes nuclear as renewable and that was not included in the question “NYS gets about 25% of its electricity from renewable sources”.  According to the NYISO Annual Net Energy Generation by Zone and Type – 2019 renewable sources including nuclear 61.4% of the total.  That anyone would support a goal that requires increasing energy from renewable resources from 25% to 70% in less than ten years clearly does not understand the electric energy system.

Q34.  One proposal is to add the social cost of carbon to the price of electricity.  The social cost of carbon is an estimate, in dollars, of the economic and public health damages that could result from emitting GHG into the atmosphere.  One estimate is that this proposal could increase customer costs in the short run but return larger cost savings to consumers in the long run.  Do you support or oppose adding the social cost of carbon to the price of electricity?

The definition is adequate but providing only a single defining statement that suggests that costs today will provide savings in the long run is inadequate and biases the responses.  My non-technical summary explains that the increase to customer costs are real but the social cost of carbon “benefit” value depends on the judgement of those developing the numbers. The benefits change if global impacts, nation-wide impacts, or for the sake of argument, just the benefits that would accrue to New Yorkers if NY emissions are reduced because of the carbon price.  This short description does not explain that the IWG costs and benefits are calculated out three hundred years.  Because the biggest climate change impacts occur near the end of that period “returning cost savings to consumers” means consumers many generations in the future.  There is another aspect to paying now for potential damages far in the future.  The money spent today is not available to spend on projects that could alleviate future damages.

Q35.  Industry experts say that adding the SCC to the price of electricity will lead to a number of outcomes.  For each prediction that experts have made, tell me if that outcome makes you more likely to support adding the social cost of carbon to electricity, less likely or that it has no effect on your position.

The NYISO has a vested interest in promoting its carbon pricing proposal.  Naturally the following questions tout the benefits claimed for the proposal.  As shown above there are issues with the NYISO’s benefit claims.

Q35A.  They predict the oldest, most polluting power plants in NY will be replaced with cleaner, less polluting generators.

The NYISO carbon pricing proposal alleges that the added cost from the addition of the SCC price to the sources emitting CO2 will cause the replacement of the old, dirty power plants.  In order for that to happen, then the additional cost has to make the old plants less competitive than other operating plants.  I think there is evidence that is not the case and that means the only effect of the carbon price will be to increase consumer prices to cover the carbon price cost for plants that need to run to maintain reliability.

Q35B.  They predict emissions will be reduced in urban communities most impacted by power plant emissions.

The only NY urban community directly impacted by power plant emissions is New York City.  Because the City is mostly on islands which results in transmission constraints, power plants need to operate in the City.  The old “peaker” units that fulfill this need have been recently targeted as having disproportionate impacts to environmental justice communities.

 The NYISO was put in place to operate the electricity system in a de-regulated market.  The press release says “Carbon pricing uses market-based price signals to achieve reductions in emissions from fossil fuel-based generators”.  The de-regulated market relies on market signals for all its future planning strategies. 

 The NYISO claims “competitive wholesale electricity markets have provided, and continue to provide, significant benefits to electricity consumers, including fuel cost savings, improved generation efficiency, reduced reserve requirements, and reduced emissions.”  However, in the case of the oldest, most polluting power plants in New York City, it has been a failure with respect to the most likely outcome for regulated electric utilities.  There has been a need to replace the old peaking turbines in the City for years and there have been multiple attempts by the merchant owners to develop new and much cleaner replacement units since 2000.  However, none of the units have been built apparently because the market signal was insufficient for the investment.  Because of the clear need I have no doubt that the DEC would have explained the need, a regulated utility would have applied to build replacements, and the Department of Public Service would have approved the construction of clean new power plants to reduce local impacts in the City.  To claim that the carbon price will change the current dynamic in and of itself is wishful thinking.

Q35C.  They predict investments in new carbon free energy technology will increase.

This is true if the carbon price proceeds are directed to investments in new carbon free energy technology.  If that is the case then there will be less and possibly no money available to offset the higher electricity prices for those least able to pay.

35D.  They predict growth in clean technology will benefit New York’s economy.

This is the mantra of the CLCPA.  Who am I to argue that a clean technology economy that depends on subsidies to survive can only grow as long as the subsidies continue?

Q36.  Some experts now predict that adding the social cost of carbon to electricity could result in a savings to consumers within a year.  Regardless of whether or not you accept that prediction, after thinking about this proposal for a moment, do you support or oppose NYS moving towards adding the SCC to the electricity or not.

If I had time, I would like to track down the basis for the statement “Some experts now predict that adding the social cost of carbon to electricity could result in a savings to consumers within a year”.  As noted previously the climate change impact benefits will not be evident for years so that won’t result in any savings in a year.  I cannot imagine a realistic scenario where adding to the cost of electricity to consumers will result in savings to consumers.  The only thing I can think of is that the economic modeling used to support the carbon pricing scenario produced that result.  If so, that is an example of hiring a consultant, hoping for a particular answer, getting the answer, and ignoring the absurdity of the result.

Conclusion

The take home message from the poll was that a “large majority of respondents are in favor of incorporating a social cost of carbon dioxide emissions into competitive wholesale energy markets”.   The announcement came out just before the NYISO goes to the Federal Energy Regulatory Commission’s Carbon Pricing in Organized Wholesale Electricity Markets technical conference and argues for their carbon pricing proposal.  It is the culmination of a public relations campaign that includes a web site, datasheet, and videos extolling the virtues of their plan.  The poll clearly was written to get the desired answer.

Unfortunately, while the theory of carbon pricing is admirable, there are practical reasons why it won’t work in practice.  At the top of the list for the NYISO carbon pricing proposal is the fact that it covers one sector in one area in a highly interconnected system.  If the market signal is strong enough to effectuate change then the most likely change is to leak generation outside New York without actually reducing CO2 emissions.  I believe the most likely outcome for New Yorkers is that the NYISO carbon pricing proposal will simply increase the cost of electricity with few if any offsetting benefits.  This poll made no attempt to explain these concerns.

The poll claims that a “large majority of respondents are in favor of incorporating a social cost of carbon dioxide emissions into competitive wholesale energy markets”.   In the first place they did not discuss competitive wholesale electric markets in the questions that were provided.  They asked the public about other concepts that they very likely were hearing about for the first time.  The description of the social cost of carbon and carbon pricing simplified the concepts so much that the possibility of any negative consequences was not mentioned.  The explanations that caused respondents to increase their support for the carbon pricing were based on benefits that are controversial.  As a result, the claim that there is support for this carbon price proposal is based on a biased poll.  I am sure that rewording the poll to reflect an unbiased explanation of carbon pricing and social cost of carbon would have changed the results.