Balancing the risks and benefits of environmental initiatives
Author: rogercaiazza
I am a meteorologist (BS and MS degrees), was certified as a consulting meteorologist and have worked in the air quality industry for over 40 years. I author two blogs. Environmental staff in any industry have to be pragmatic balancing risks and benefits and (https://pragmaticenvironmentalistofnewyork.blog/) reflects that outlook. The second blog addresses the New York State Reforming the Energy Vision initiative (https://reformingtheenergyvisioninconvenienttruths.wordpress.com). Any of my comments on the web or posts on my blogs are my opinion only. In no way do they reflect the position of any of my past employers or any company I was associated with.
I recently had a letter to the editor of the Albany Times Union published asking readers how much they would be willing to pay for the New York Cap-and-Invest (NYCI) Program. There is a word limit on submittals so this post provides supporting information for that letter.
I have followed the Climate Leadership & Community Protection Act (Climate Act) since it was first proposed, submitted comments on the Climate Act implementation plan, and have written over 380 articles about New York’s net-zero transition. The opinions expressed in this post do not reflect the position of any of my previous employers or any other organization I have been associated with, these comments are mine alone.
Overview
The Climate Act established a New York “Net Zero” target (85% reduction in GHG emissions and 15% offset of emissions) by 2050. It includes an interim 2030 reduction target of a 40% reduction by 2030 and a requirement that all electricity generated be “zero-emissions” by 2040. The Climate Action Council (CAC) is responsible for preparing the Scoping Plan that outlines how to “achieve the State’s bold clean energy and climate agenda.” In brief, that plan is to electrify everything possible using zero-emissions electricity. The Integration Analysis prepared by the New York State Energy Research and Development Authority (NYSERDA) and its consultants quantifies the impact of the electrification strategies. That material was used to develop the Draft Scoping Plan outline of strategies. After a year-long review, the Scoping Plan was finalized at the end of 2022. In 2023 the Scoping Plan recommendations were supposed to be implemented through regulation, PSC orders, and legislation. Not surprisingly, the aspirational schedule of the Climate Act has proven to be more difficult to implement than planned and many aspects of the transition are falling behind. When political fantasies meet reality, reality always wins.
Published Letter to the Editor
I could not find a link to the letter available to non-subscribers but did get this assortment of opinion pieces from a friend. The letter is in there somewhere. The following is the text:
The article “State’s Cap and Invest program unveiled,” Dec. 22, explained that it is intended to fund the transition to zero-emissions energy alternatives. The Hochul administration claims that the costs of inaction are more than the costs of action, but this is just a soundbite slogan. Most benefits are to society, so they do not directly offset the costs of electrification for consumers.
The question New Yorkers want to know is: How much will this cost me? Wind and solar costs increased sharply in 2023 due to changes in commercial conditions driven by inflation, interest rates and supply chain disruptions. Cap-and-invest will add even more costs. Last year, Washington state started a similar program. At the beginning of 2023, gasoline prices in Washington were 72 cents higher than the national average. By October, prices were $1.25 higher. The cost differential relative to the national average increased 88 percent because of the cost of their cap- and-invest program. A similar spike in gas prices will occur here. New York’s program covers all energy sectors, so all energy costs will necessarily increase.
New York greenhouse gas emissions are less than one-half of one percent of global emissions, and global emissions have been increasing by more than one-half of one percent per year since 1990. Therefore, anything New York does will be supplanted by emissions elsewhere in less than a year. That doesn’t mean we should not do something, but it does mean the state should document expected future costs to consumers.
Questions
Before the letter was published, I was asked to respond to questions. The first requested confirmation of the numbers included. The second asked about my claim that New York emissions are less than half a percent of global emissions. This section responds to those questions.
My first claim was that “The cost differential relative to the national average increased 88% because of the cost of their cap-and-invest program.” I responded:
The Gas Buddy website includes a historical gas price graph that I used to estimate the effect on gasoline prices there. In the following graph I plotted the average gas price in Washington in blue, USA average in red, and the Albany, NY average in green. The blue arrow points to January 2023 when the Washington cap-and-invest program started and gasoline prices in the state increased relative to the national average. At the beginning of 2023 gasoline prices in Washington were $0.76 higher than the national average. By October prices peaked $1.38 higher. The cost differential relative to the national average increased 83% because of the cost of their cap-and-invest program.
My second claim was that “New York greenhouse gas emissions are less than one half of one percent of global emissions, and global emissions have been increasing by more than one half of one percent per year since 1990.” I responded:
I used information from my post Climate Act Emission Reductions in Context dated January 20, 2022 that documented how New York GHG relate to global emission increases. In response to your questions I updated the analysis. I found CO2 and GHG emissions data for the world’s countries and consolidated the data in the attached spreadsheet. There is interannual variation, but the five-year annual average has always been greater than 0.79% until the COVID year of 2020. The Statewide GHG emissions inventory came out in December but the comparable GWP-100 data that I used from Open Data NY through 2021 are not available. The analysis relies on last year’s data. New York’s share of global GHG emissions is 0.42% in 2019 so this means that global annual increases in GHG emissions are greater than New York’s total contribution to global emissions.
Additional information was provided in my post Washington State Gasoline Prices Are a Precursor to New York’s Future. That post showed that there is an obvious link between Washington’s new cap and trade program and gasoline prices. I found that the cost of Washington gasoline has risen more relative to the price increases elsewhere so that now Washington has the highest prices in the nation. The first two auctions for the Washington cap-and-invest program sold 14,770,222 allowances and raised $780,829,117 averaging $52.87 per allowance. According to the US Energy Information Administration 17.86 lbs of CO2 are emitted per gallon of finished motor gasoline which means that 112 gallons burned equals one ton. That works out to $0.47 a gallon needed to cover the cost of allowances necessary to purchase the allowances and that is a unique Washington cost adder.
Discussion
The Energy Policy Institute at the University of Chicago did a poll in early 2023 poll with “the Associated Press–NORC Center for Public Affairs Research” explored Americans’ attitudes on climate change, their views on key climate and energy policies, and how they feel about electric vehicles and the policies to encourage them. The following chart from that report shows that 38% would be willing to pay an additional $1 a month for a fee to combat change and only 21% would be willing to pay $100 a month. Based on my analyses I think the total all-in cost for a household to comply with proposed carbon fee is going to be a lot closer to $100 than $1 a month.
Conclusion
My next post is going to describe a recent webinar, “Preliminary Scenario Analyses” (slides and recording) that is part of this year’s New York Cap-and-Invest (NYCI) Program stakeholder engagement process. The webinar offered the first glimpse of potential costs for NYCI and I will compare some of the expected costs with the poll results described above.
There is no question in my mind that most New Yorkers have no clue how much this will cost. I also believe that the Hochul Administration is keeping the costs hidden as much as possible because they know that support for the program would evaporate. I appreciate the Albany Times-Union publishing my letter as part of my quixotic quest to stop implementation before it is too late.
Paul Driessen recently wrote an article explaining that “Models, myths and misinformation on climate drive models, myths and misinformation on energy” at Cfact,org. It is such a good summary of the overarching issues associated with New York’s Climate Leadership & Community Protection Act (Climate Act) that I want to present it here with some commentary.
I have followed the Climate Act since it was first proposed, submitted comments on the Climate Act implementation plan, and have written over 380 articles about New York’s net-zero transition. The opinions expressed in this post do not reflect the position of any of my previous employers or any other organization I have been associated with, these comments are mine alone.
Overview
The Climate Act established a New York “Net Zero” target (85% reduction in GHG emissions and 15% offset of emissions) by 2050. It includes an interim 2030 reduction target of a 40% reduction by 2030 and a requirement that all electricity generated be “zero-emissions” by 2040. The Climate Action Council (CAC) is responsible for preparing the Scoping Plan that outlines how to “achieve the State’s bold clean energy and climate agenda.” In brief, that plan is to electrify everything possible using zero-emissions electricity. The Integration Analysis prepared by the New York State Energy Research and Development Authority (NYSERDA) and its consultants quantifies the impact of the electrification strategies. That material was used to develop the Draft Scoping Plan outline of strategies. After a year-long review, the Scoping Plan was finalized at the end of 2022. In 2023 the Scoping Plan recommendations were supposed to be implemented through regulation, PSC orders, and legislation. Not surprisingly, the aspirational schedule of the Climate Act has proven to be more difficult to implement than planned. Many aspects of the transition are falling behind and the magnitude of the necessary costs is coming into focus. When political fantasies meet reality, reality always wins.
Climate and energy fantasy and tyranny
Paul Driessen is senior policy analyst for the Committee For A Constructive Tomorrow (www.CFACT.org) and “author of books and articles on energy, environment, climate and human rights issues.” He covers “climate change, energy and environmental, human rights, corporate social responsibility, sustainable development, and renewable energy issues in articles and research papers, on radio programs and college campuses, and at professional and other conferences.”
In this article he writes that “It’s mystifying and terrifying that our lives, livelihoods and living standards are increasingly dictated by activist, political, bureaucratic, academic and media ruling elites, who disseminate theoretical nonsense, calculated myths and outright disinformation.” I have observed that they do this all the while claiming that they are “following the science”
Driessen describes the existential threat rationale and the disconnect between the narrative and historical climate change before human effects and the actual recent data since the alleged human effects started:
We’re constantly told the world will plunge into an existential climate cataclysm if average planetary temperatures rise another few tenths of a degree, due to using fossil fuels for reliable, affordable energy, raw materials for over 6,000 vital products, and lifting billions out of poverty, disease and early death.
Climate alarmism implicitly assumes Earth’s climate was stable until coal, oil and gas emissions knocked it off kilter … and would be stable again if people stopped using fossil fuels.
In the real world, climate has changed numerous times, often dramatically, sometimes catastrophically, and always naturally. Multiple ice ages and interglacial periods, Roman and Medieval warm periods, a Little Ice Age, major floods, droughts and dust bowls all actually happened – long before fossil fuels.
Data for tornados, hurricanes and other extreme weather events prove they are not getting more frequent or intense. You might argue that Harvey and Irma marked a sudden increase in major hurricanes in 2017 – but that’s only because after Wilma there’d been a record twelve years of zero Category 3-5 hurricanes.
He makes the point that if people would bother to look at the data and figure out that the headlines come from models that can be configured to get any answer desired that the reasons for the transition would evaporate:
We need to ignore the fear-mongering, look at actual historic records, and recognize that more dangerous, unprecedented calamities upward trends simply aren’t there. We need to insist that alarmists distinguish and quantify human influences versus natural forces for recent temperature, climate and weather events – and show when, where and how human activities replaced natural forces. They haven’t done so.
The only place manmade temperature and climate catastrophes exist is in Michael Mann and other GIGO computer models. These climate models are worthless for policymaking because they aren’t verified by actual measurements, don’t account for urban heat island effects, and cannot incorporate the vast scale and complexity of atmospheric, planetary and galactic forces that determine Earth’s climate.
Another over-looked point is the impacts of cold weather relative to warm weather:
In reality, people and planet are threatened far more by global cooling than warming. Even a couple degrees drop in average global temperatures would drastically reduce growing seasons, arable land, plant growth, wildlife habitats and agricultural output – especially if it’s accompanied by reductions in plant-fertilizing atmospheric carbon dioxide levels. Plants, animals and people would face starvation.
He goes on to point out that fear mongering about climate change is not the only flawed story. The idea that there is a solution that is simple and cost-effective is equally unsound:
We’re also told ruling elites could prevent this imagined crisis by switching us to wind, solar and battery power. (They also want to eliminate cows and modern agriculture, over misplaced concerns about methane and fertilizer, but that’s another discussion.)
Build a coal, gas or nuclear power plant – and unless governments shut it down or cut off fuel supplies, the plant provides plentiful, reliable, affordable electricity nearly 24/7/365 for decades. Build a massive sprawling wind or solar installation, and you have to back up every kilowatt with coal, gas or nuclear power – or with millions of huge batteries – for every windless, sunless period.
The economic and ecological effects would be ruinous.
Driessen does a good explaining the qualities that make fossil and nuclear generating the best choice for providing power to society:
Coal, gas and nuclear plants can be built close to electricity-intensive urban centers. Tens of thousands of wind turbines and billions of solar panels must go where there’s good wind and sunshine, far from urban areas, connected by high voltage transmission lines. In fact, for Net Zero, says the International Energy Agency (IEA), the world would need 50,000,000 miles of new and upgraded transmission lines by 2040!
All those “clean, green, renewable, sustainable, affordable” wind, solar and battery systems, backup generators, transmission lines and electric vehicles would require millions of tons of iron, copper, aluminum, manganese, cobalt, lithium, concrete, plastics and numerous other metals and minerals.
Onshore wind turbines require nine times more materials per megawatt – and offshore turbines need fourteen times more – than a combined-cycle natural gas power plant, the IEA calculates. Solar panels and EVs have the same problem.
To get these materials, billions of tons of overlying rock must be removed to reach billions of tons of ores – which then must be processed in huge industrial facilities that use mercury and toxic chemicals … emit vast quantities of greenhouse gases and toxic pollutants … and are powered by coal or natural gas. Many components for these “green” technologies are derived from oil and natural gas.
US and other Western facilities control and recycle these pollutants. Chinese and Russian facilities pay little attention to air and water pollution, workplace safety, or fossil fuel use, efficiency and emissions – yet they supply over 80% of “renewable” energy raw materials, because the West increasingly bans mining and processing and makes energy prohibitively expensive to operate mines and factories.
Pseudo-renewable energy worldwide would cost hundreds of trillions of dollars, would have to be subsidized by trillions of taxpayer dollars, and would dramatically increase electricity rates.
Ultimately, I think the public will balk at the transition when the costs become clear. Driessen explains:
Electric vehicle, appliance and heating mandates would double or triple all these infrastructure, materials, mining and land use requirements, ecological impacts and costs.
American residential electricity prices in 2023 ranged from 10.4¢ per kilowatt-hour (Idaho) to 28.4¢ per kWh (California). British families paid 47¢ per kWh! UK factories and businesses paid up to three times what their US counterparts did. German families, factories and businesses are in the same capsizing boat.
But EU industrial leaders say energy prices must continue rising, to cover the soaring costs of the “energy transition.” If they don’t, factories, jobs and emissions will move overseas. But if they do, families will freeze jobless in the dark.
In the face of these obvious problems I often wonder why the net-zero transition has so much momentum. I agree with Driessen’s suggestion:
What many call the Climate Industrial Complex has a monumental stake in perpetuating this situation. Collectively, its members have incredible power, control much of government and education, hold enormous financial stakes in green tech subsidies, and often censor contrarian viewpoints.
There is another troubling problem. The plans for the energy transition simply cannot work. When they don’t there are hints that life style changes will be mandated:
Just as ominous, if it becomes clear that the Brave New World of Net Zero Energy cannot provide sufficient affordable electricity and other necessities for modern industries, healthcare and living standards, two-thirds of America’s ruling elites favor food and energy rationing to combat climate change and retain their anti-capitalism, anti-growth agenda. It’s likely the same in Europe and Canada.
The Biden Administration and other governments are already dictating the kinds of vehicles we can drive and what appliances and heating systems we can use. They’re already exploring ways to limit the kind and size of homes we can live in, how warm and cool we can keep them, how often we can travel by air, the kinds and amounts of meat we can eat, and many other aspects of our lives.
New York State has never quantified the potential effect of their GHG emission reduction policies on the climate or admitted that New York emissions relative to other countries are insignificant:
Meanwhile, China, India, Indonesia and dozens of other countries are building hundreds of coal and gas generating units – further underscoring the insanity and futility of trying to control energy sources, quantities and emissions.
He concludes that the politicians currently in power have to be voted out to stop the transition:
This is what America’s 2024 state and national elections are about – and elections in Europe, Canada, Australia and elsewhere. The longer these elites remain in power, the more our liberties, lives and living standards will resemble life a century ago under authoritarian regimes. Vote accordingly.
Conclusion
New York’s net-zero transition is going to cause more harm than good. Current energy system levels of reliability, affordability, and effects on the environment will be impacted negatively. This has always been a political construct so the only way to change it is to change the politicians in charge.
On January 23, 2024 the New York State Department of Environmental Conservation (DEC) and the New York Energy Research & Development Authority (NYSERDA) hosted the first webinar of this year’s New York Cap-and-Invest (NYCI) Program stakeholder engagement process. This post presents my initial impressions of the first webinar in a series of three.
I have followed the Climate Act since it was first proposed, submitted comments on the Climate Act implementation plan, and have written over 380 articles about New York’s net-zero transition. The opinions expressed in this post do not reflect the position of any of my previous employers or any other organization I have been associated with, these comments are mine alone.
Overview
The Climate Act established a New York “Net Zero” target (85% reduction in GHG emissions and 15% offset of emissions) by 2050. It includes an interim 2030 reduction target of a 40% reduction by 2030 and a requirement that all electricity generated be “zero-emissions” by 2040. The Climate Action Council (CAC) is responsible for preparing the Scoping Plan that outlines how to “achieve the State’s bold clean energy and climate agenda.” In brief, that plan is to electrify everything possible using zero-emissions electricity. The Integration Analysis prepared by the New York State Energy Research and Development Authority (NYSERDA) and its consultants quantifies the impact of the electrification strategies. That material was used to develop the Draft Scoping Plan outline of strategies. After a year-long review, the Scoping Plan was finalized at the end of 2022. In 2023 the Scoping Plan recommendations were supposed to be implemented through regulation, PSC orders, and legislation. Not surprisingly, the aspirational schedule of the Climate Act has proven to be more difficult to implement than planned. Many aspects of the transition are falling behind and the magnitude of the necessary costs is coming into focus. When political fantasies meet reality, reality always wins.
Cap-and-Invest
The Climate Action Council’s Scoping Plan recommended a market-based economywide Cap-and-Invest Program. It is supposed to establish a declining cap on greenhouse gas emissions, limit potential costs to New Yorkers, invest proceeds in programs that drive emission reductions in an equitable manner, and maintain the competitiveness of New York businesses and industries. Cap-and-Invest will ensure the state meets the greenhouse gas emission reduction requirements set forth in the Climate Leadership & Community Protection Act (Climate Act).
The reality is different particularly because environmental activists want to remove certain components that have made similar programs work in the past. Further background information is available at my carbon pricing initiative page.
NYCI Implementation
The NYCI website describes the implementation plan:
This process will solicit crucial feedback from individuals and stakeholder groups to build out an equitable program that balances interests while ensuring the State meets its greenhouse gas emission reduction objectives. New York’s Cap-and-Invest Program will draw from the experience of similar and successful programs across the country and the world that have yielded sizeable emissions reductions while catalyzing the clean energy economy.
In the First Stage of Pre-Proposal Outreach DEC, and NYSERDA hosted a series of webinars in June 2023. DEC and NYSERDA have now entered into the Second Stage of Pre-Proposal Outreach and will continue to host workshops to gather feedback on the program as we develop regulations to implement the Cap-and-Invest Program. See the Events page for more information on upcoming webinars and recordings of past webinars.
In this stage of the pre-proposal outreach DEC and NYSERDA are seeking feedback on a outline of questions and descriptions for NYCI implementation. They want feedback by March 1 and plan to have the regulation in place by the end of 2024. The first webinar described the role of NYCI. Subsequent webinars will review the pre-proposal outline and describe an analysis of expectations for allowance prices and emissions trajectories. I will address those webinars here as well.
Webinar Overview
The entire webinar was scripted. Each presenter read their remarks and it even appeared that the responses to questions were vetted. For example, in the overview Doreen Harris, President of NYSERDA read the Guiding Principles for NYCI. The narrative is that under Governor Hochul’s direction, New York’s cap & invest program will incorporate these guiding principles:
Affordability. Craft a program to deliver money back to New Yorkers to ensure energy affordability
Climate Leadership: Catalyze other states to join New York, and allows linkage to other jurisdictions
Creating Jobs and Preserving Competitiveness: Protect existing jobs and support new and existing industries in New York
Investing in Disadvantaged Communities: Ensure 35%+ of investments benefit Disadvantaged Communities
Funding a Sustainable Future: Support ambitious clean energy investment
She mentioned that two thirds of the revenues collected will be used to support the transition but that they would be looking for suggestions for investments.
Jonathan Binder from DEC gave a high-level overview of NYCI. He explained that the “Climate Action Council’s final Scoping Plan recommends – and Governor Hochul’s 2023 State of the State Address and the FY 2024 State Budget advanced – an economywide Cap-and-lnvest Program.” He noted that DEC and NYSERDA have been developing the plan to implement NYCI.
The following slide describes the emission reduction requirements. Note that between 2021 and 2030 NYS GHG emissions will have to decrease from 368 million metric tonnes (MMT) to somewhere under 246 MMT. This represents a reduction of 33% but there was no mention of feasibility. It was mentioned that the plan is to get on the trajectory to meet the 2030 target.
Ona Papageorgiou continued the overview description. The following slide shows how NYCI is supposed to fit in with other programs, investments, and regulations. She also described the role of NYCI following the narrative script. First, there was the obligatory comment that “New Yorkers are feeling the effects of climate change.” In yet another misunderstanding between weather and climate the script said “In 2023 alone we experienced air choked with wildfire smoke, flooding in NYC and the Hudson Valley, extreme snowstorms in Buffalo, and more.” No mention was made how NYCI could possibly affect those weather events given that New York’s emissions are less than half a percent of global emissions.
The script made the point that “Cap-and-invest and similar programs are internationally accepted as a core component of a credible decarbonization strategy.” I agree that this approach is widely used. The script went on to state that the Climate Action Council’s Scoping Plan recommended cap-and-invest as the most cost-effective means of achieving decarbonization. For the record, that was taken as an article of faith and not proven.
The following two statements in the script hint at the ramifications of the plan. It claims that “Cap-and-invest ensures New York will minimize costs by reducing emissions first in sectors where it is cheapest to do so.” That is the theory so I will not disagree. The second statement includes my highlights:
NYCI pairs a disincentive for continued use of fossil fuels with robust funding to support the energy transition. It is an essential complement to existing investments and regulations intended to reduce emissions and drive a clean energy transition.
Therein lies the ramification for New Yorkers. The disincentive for continued use of fossil fuels is to make it expensive enough that users will switch to other technologies or use less. For anyone who does not have the option for another technology or who cannot meaningfully use less fossil fuel the NYCI result is a regressive tax on energy use.
The narrative script claimed that “cap-and-invest and similar pricing mechanisms are a well-tested mechanism for addressing climate change.” New York has been a big proponent of the Regional Greenhouse Gas Initiative (RGGI) and the script claims that RGGI achieved 50% reduction in CO2 emissions. That statement is simply wrong. I blog about the details of the RGGI program. I have found that although CO2 emissions in the RGGI region are down around 50% since the start of the program, RGGI funded control programs have only been responsible for 6.7% of the observed reductions. When the sum of the RGGI investments is divided by the sum of the annual emission reductions the CO2 emission reduction efficiency is $927 per ton of CO2 reduced. Both of these findings should be of concern, but they are not even acknowledged.
Vlad Gutman-Britten (NYSERDA) read the script for the “Cap-and-Invest Program: How it Works” section of the webinar. He explained:
Large-scale GHG emitters and distributors of heating and transportation fuels will be required to purchase allowances for the emissions associated with their activities.
NYCI will incentivize businesses and other entities to transition to lower- carbon alternatives.
Proceeds will support:
Consumer Climate Action Account that will deliver at least 30 percent in future Cap-and-Invest proceeds to New Yorkers every year to mitigate consumer costs.
Industrial Small Business Climate Action Account that will deliver up percent in proceeds to support energy affordability for small businesses.
Climate Investment Account that will direct two-thirds of future Cap-and-Invest proceeds to support the transition to a less carbon-intensive economy.
A series of slides were presented that described how cap-and-invest programs are supposed to work. The first slide showed example marginal abatement costs across a curve. In this slide it shows that there are choices that will result in lower emissions (green wedge). Those choices are made “based on upfront costs, costs over time to operate, and other factors.” Example: an LED lightbulb costs more up front but reduces electricity costs over time. Even though this an illustrative example there is no expectation that there are enough of these options to get to the Climate Act target limits.
A cap-and-invest program is supposed to modify the costs of control strategies. The following slide explains the general approach. Note that it explicitly says these programs include trading and banking. There is a vocal minority of ideologues who think that trading and banking is inappropriate. For example, Assemblywoman Kelles has introduced A08469 that “establishes an economy-wide cap and invest program to support greenhouse gas emissions reductions in the state “ that includes the requirement that it “must be implemented with input from impacted communities to avoid the harms we have seen from other pollution pricing mechanisms that have relied on ‘trading’ the right to pollute disadvantaged communities”. It is encouraging that the webinar confronted this mis-conception head on.
The next slide in this series explained that when a cap-and-invest program is implemented investment decisions change. The added cost of the allowances makes “Investment in pollution reductions become cost effective because it’s cheaper to cut those emissions than purchase allowances (yellow wedge)”. In my opinion, however, the incremental costs of the allowance price necessary to make those investments cost-effective is higher than what is politically acceptable. I guessed that that in order to make the emission reductions needed investments between $15.5 and $46.4 billion per year will be required. I don’t think that range is politically palatable. The slide also pointed out that proceed investments can be used to reduce emissions so that decision-makers will have “even more of an incentive to choose to invest in decarbonization (orange wedge).”
The next slide addressed flexibility mechanisms that are included to address unforeseen circumstances. They are proposing to include price stability features included in RGGI: a price floor, emissions containment reserve, and a cost containment reserve. They explain that they are:
“intended to make the system resilient to unexpected changes—sharp and unanticipated emission reductions (e.g., the transition away from coal) or energy shocks (e.g., as witnessed during COVID-19).” The slide emphasizes the price ceiling explaining that “If clean energy technology faces substantial barriers (supply chain issues, inadequate workforce, unavailable mitigation options, etc.)” that without some restrictions that costs could explode. The proposed solution is “a price ceiling where unlimited compliance instruments are issued at a predetermined price.” This limits emission reductions temporarily until the market catches up. These allowance are explicitly created just for this compliance requirement. That ensures that facilities will not shut down because they don’t have sufficient allowances. Among the many unresolved issues is what that means to the Climate Act targets. If they have exceed the limit but kept the lights on and did not induce an artificial energy shortage that is a good thing. But the climate activists will have a fit.
The next slide addresses a fundamental issue of a single jurisdiction GHG emissions reduction program intended to address a global problem. When New York acts alone its programs can cause “leakage” i.e., “shifting activity out of New York and to other locations with higher emissions.” New York industry is already among the most efficient in the country which makes further improvements more costly and reduces the potential total reductions. The NYCI pre-proposal recommends “providing no-cost allowances to industry at risk of leakage in amounts that decline every year”. This sounds fine in theory but in practice I suspect it will not be very effective.
Hillel Hammer (NYSERDA) read the script for the “Current Emissions” section of the webinar. This session set the stage for the Preliminary Analysis Overview webinar later in the week. That analysis is supposed to cover emissions and costs. Environmental Justice advocates have created a story that peaking power plants in New York City are “perhaps the most egregious energy-related example of what environmental injustice means today” and are demanding that they be shut down as soon as possible, The single-minded focus on the evils of these facilities extends to demands that NYCI not increase emissions within disadvantaged communities (DACs) near the power plants. According to the script inhalable particulate (PM2.5) emissions are primarily from other sources. The following slide shows that “Individually controlled (permitted) stationary sources, including electric generation units, large industrial sources, and large commercial and institutional sources represented approximately 4% of the total.”
The next slide describes the sources that create inhalable air pollution burdens in New York. It points out that:
Individually controlled (permitted) stationary sources yield a minority of the air pollution emissions in New York.
In 2020, electric generation units represented 8.5% of non-wood fuel combustion PM25 emissions in NY, and other permitted sources represented approximately 3.5%.
Area and mobile sources dominate, which means that individual stationary source-focused policy is important but doesn’t address the bulk of sources.
The message is that addressing permitted stationary sources does not address the bulk of the problem in DACs.
The next slide addressed electricity sector emissions. It states that:
Existing policies will go a long way to addressing sources of emissions in the electric sector.
RGGI, the Clean Energy Standard, and other programs will substantially reduce the use of fossil fuels for our electricity needs.
The Peaker Rule will ultimately retire the most polluting plants in New York. 35 peaking units representing 955 MW have already retired and an additional 265 MW are expected to retire in 2025.
NYCI cannot be designed to compel the closure of individual generators, and pricing may not reduce the use of peaking facilities.
The final item bluntly points out that NYCI is the wrong tool to use to try to shut down the peaking power plants. During the presentations and in the pre-proposal outline the DEC has suggested that their preferred approach is to limit emissions from sources in DACs using permit conditions in other programs. I agree with DEC on this line of reasoning. Trying to control a local air quality problem with a GHG emissions program designed to address global impacts is absurd. However, logic and reason are not the primary drivers of the environmental justice advocates. They rely on emotion. It will be interesting to see if they accept these arguments or demand something different.
The next slide addressed transportation emissions:
• Advanced Clean Cars II and Advanced Clean Trucks will drive substantial uptake of zero emission vehicles across all classes.
• Commitments to all-electric school buses will support change for those vehicles that directly burden children.
• Investments like the Clean Transportation Prizes target market transformation in the most impactful geographies.
• NYCI would provide essential revenue and price signal to ensure achievement of existing policies in addition to advancing greater ambition.
In this slide and the previous one, the transformation claims in the bar charts are based on the Integration Analysis. Based on my evaluation of the draft Scoping Plan analyses that used the Integration Analysis I am skeptical of the emission reductions expected.
The final slide associated with the emission reduction policies claims that “NYCI will accelerate New York’s emission reduction policies and programs that advance building decarbonization”. This is where the claims deserve more attention. It says that “NYCI will put electricity on a more level playing field with fossil fuels, helping support building efficiency and electrification”. That occurs when the cost of carbon added by NYCI makes fossil fuels more expensive and reduces the present cost advantage of fossil fuels relative to electricity. It claims that “In particular, NYCI will support adoption of heat pumps, especially replacing heating oil.” However, everything I have seen suggests that heat pumps are already cost competitive with heating oil furnaces but that they are nowhere close for natural gas furnaces. The final bullet point says that “NYCI will create a new investment mechanism for building transition.” Presumably that means that revenues from the auction will subsidize building electrification.
The other section of this slide states that “NYCI will also help deploy zero emission vehicles faster than with current policies alone”:
This is especially the case for medium and heavy-duty vehicles and non-road engines, where existing regulations are less stringent than for light duty. Diesel engines are also especially impactful in many Disadvantaged Communities.
NYCI will even the playing field for clean transportation, and the revenue will create financial support also for hard-to-electrify vehicles, supporting not only focused investment in electrifying these impactful sources, but also growth of hydrogen fuel cell vehicles used in long- haul heavy-duty and non-road applications.
While the theory suggests, and the results may show some benefits, I do not think there will be meaningful impacts. This is another situation where the demand is inelastic, and the alternatives have so many downsides that it would take an enormously expensive carbon cost to justify meaningful conversions.
There was a session on “Delivering Equitable Benefits” but I am not going to discuss them much here. One point made does deserve mention “The Climate Act requires that DEC’s NYCI regulation not result in net increases in co-pollutant emissions or disproportionately burden disadvantaged communities”. The DEC and NYSDERDA analysis need to prove that is the case.
Conclusion
I was worried because environmental activists want to remove certain components that have made similar trading programs work in the past. The DEC and NYSERDA proposal confronts that line of reasoning in order to preserve the expectations that NYCI will work the same as other programs.
There is an enormous effort necessary to get this program in place and operational by the end of the year. I don’t think it is possible and I suspect that there are insufficient resources at the state agencies to make it even close. Unfortunately, the likely outcome is a poorly designed and implemented program. Worse it could end up causing more problems and adding costs. Stay tuned.
One of my readers sent me some documents related to the implementation of New York’s Climate Leadership & Community Protection Act (Climate Act) from the Central Hudson rate case, CASE 23-E-0418. I asked if I could credit him for providing the material for this post but he prefers to be anonymous: “I don’t need the re-education task force tracking me down.” This post highlights some commonsense issues related to the effects of Climate Act implementation on a utility rate case.
I have followed the Climate Act since it was first proposed, submitted comments on the Climate Act implementation plan, and have written over 380 articles about New York’s net-zero transition. The opinions expressed in this post do not reflect the position of any of my previous employers or any other organization I have been associated with, these comments are mine alone.
Overview
The Climate Act established a New York “Net Zero” target (85% reduction in GHG emissions and 15% offset of emissions) by 2050. It includes an interim 2030 reduction target of a 40% reduction by 2030 and a requirement that all electricity generated be “zero-emissions” by 2040. The Climate Action Council (CAC) is responsible for preparing the Scoping Plan that outlines how to “achieve the State’s bold clean energy and climate agenda.” In brief, that plan is to electrify everything possible using zero-emissions electricity. The Integration Analysis prepared by the New York State Energy Research and Development Authority (NYSERDA) and its consultants quantifies the impact of the electrification strategies. That material was used to develop the Draft Scoping Plan outline of strategies. After a year-long review, the Scoping Plan was finalized at the end of 2022. In 2023 the Scoping Plan recommendations were supposed to be implemented through regulation, PSC orders, and legislation. Not surprisingly, the aspirational schedule of the Climate Act has proven to be more difficult to implement than planned and many aspects of the transition are falling behind, and the magnitude of the necessary costs is coming into focus. When political fantasies meet reality, reality always wins.
Central Hudson Rate Case
Central Hudson Gas & Electric Corporation (Central Hudson) is a “regulated transmission and distribution utility serving approximately 315,000 electric customers and 90,000 natural gas customers in a defined service territory of New York State’s Mid-Hudson River Valley”. On July 31, 2023 Central Hudson submitted revisions to its electric and gas rates (“Rate Case”). It includes double-digit gas and electric delivery rate increases and the public outcry has been intense. In this post I highlight some of the issues that affect costs that are imposed by the Climate Act.
There is a dynamic at work for all New York corporations relative to the Climate Act. All companies know it is going to cost a lot of money, threaten reliability and will not make much of a difference to global warming. However, not unlike the Star Trek line used by “the Borg in the series, who assimilate various cultures into their own and warn the encountered species, that ‘resistance is futile’”, companies have few options opposing the Climate Act. If they publicly oppose the Climate Act well organized environmental organizations will claim that they are against solving the existential threat of climate change. Recent administrations in New York have an outsized and weaponized influence on regulatory actions. As a result, criticizing a political policy will adversely affect doing business with state agencies and very likely impact the outcome of rate cases. There are no upsides to opposition in my opinion.
Central Hudson has done about as much as they could to educate their customers. Their Energy in Transition webpage addressed the question: “How quickly can we transition to an energy system that protects the environment without compromising highly consistent and reliable service at a reasonable cost?”. It describes the Climate Act, outlines Central Hudson’s position, and includes examples of what people are saying about the risks of the net-zero transition. Also included are videos on implementation of the Climate Act and New York Independent System Operator (NYISO) videos that help New Yorkers understand the important changes and challenges ahead. All this is accompanied by the following:
Residents and businesses should be aware of the changes that are coming and help shape the transition by contacting your state legislator or contacting the Governor’s office if you have thoughts about how these changes may affect you.
On the other hand, the balance between trying to appease politicians and providing customers with electric and gas service upon demand at a reasonable price is a challenge. The primary point in the comments described below is that Central Hudson went too far trying to appease the State at the expense of its customers.
Climate Leadership and Sustainability Panel
In the initial submittal Central Hudson included the Direct Testimony of its Climate Leadership and Sustainability Panel (CLSP) along with exhibits. The stated purpose of the Panel’s testimony in the Rate Case says:
Central Hudson has made substantial efforts and investments to facilitate and support New York State’s decarbonization and environmental justice objectives as established within New York State’s Climate Leadership and Community Protection Act (“CLCPA”). The Panel will first outline the requirements of the CLCPA itself, as well as the outcomes of the Company’s facilitation and support of the CLCPA goals. The Panel will explain the need for a deferral mechanism for costs that are incurred in support of CLCPA compliance. The Panel will also present the Company’s completed, ongoing, and planned activities that are consistent with the CLCPA, including the Company’s Sustainability Strategy and Efforts; Climate-Driven Planning, Studies, and Reporting; Gas Initiatives; Electric Vehicle (“EV”) Make Ready Programs (“MRP”), Supplemental EV programs; Electrification of Central Hudson’s fleet; and the Company’s Onsite Solar Proposal. The Panel will explicitly identify the Company’s proposed CLCPA-aligned initiatives and associated recovery mechanisms within this proceeding.
Rate Cases and the Climate Act
This post highlights the Direct Testimony of Allan R. Page on behalf of Dutchess County New York: “The primary purpose of his testimony is to “express the concerns of Dutchess County as the concerns relate to how climate is being addressed in these rate cases.” He founded A. Page & Associates after a 32-year career with Central Hudson. His testimony focused on Central Hudson’s proposed expenditures to meet the requirements of the Climate Act.
In the testimony, Dutchess County gave reasons why “Central Hudson should not pursue any emissions reduction initiatives beyond what is required by state regulation” as proposed by its Climate Leadership and Sustainability Panel. The testimony expressed “concern about the overall cost of achieving state clean energy policy objectives and the impact such costs will have on customers”, stated that “emissions reduction efforts within New York State will have little impact on the global climate and that New Yorkers, including those residing in disadvantaged communities (“DACs”), may not directly benefit. For these reasons”.
The Dutchess County Testimony describes Panel proposals that will increase costs with minimal benefits to customers. For example, it notes that Central Hudson’s is “taking ‘significant steps’ ‘to enhance corporate focus on sustainability and incorporate climate change considerations into its operations’ while building upon ‘understanding stakeholder interests” but points that the focus “does not
come free of change” nor does it provide tangible benefits to its customers.
The Rebuttal Testimony comment summarizes the Dutchess County concerns with clean energy investments:
The Panel acknowledges Dutchess County’s concerns regarding the overall cost of achieving the CLCPA emissions reduction and clean energy goals. The future costs, as well as responsibility for those costs, are not fully understood at this time. The Company supports a balance, one where safety, reliability, and just and reasonable rates are core elements of the Company’s utility planning and operations, while the incorporation of clean energy initiatives provides support for the achievement of New York’s CLCPA targets. As Dutchess County indicates in its testimony, “Through PSC regulation and orders, balance is defined.” The Company’s clean energy investments are consistent with those included in recent Public Service Commission (“PSC” or “Commission”) orders approving utility rate plans.
The statement that “future costs, as well as responsibility for those costs, are not fully understood at this time” is absolutely true. To the defense of Central Hudson, the Scoping Plan is no more than an outline of control strategies with incomplete cost documentation. There has never been a feasibility analysis to determine how the strategies might work and how the costs might be assigned. Dutchess County Testimony correctly points out that the ratepayers will be the losers as a result.
The Rebuttal Testimony responds to an estimate of total costs where they claim “Dutchess County’s testimony is inconsistent with a Company interrogatory response relating to the cost of carbon reduction”:
Dutchess County seems to have inadvertently mixed and matched parts of the Company’s response. First, the net present value of $300 billion was identified in the response as a modeling estimate in the January 2022 Climate Action Council Scoping Plan, noting that the predicted costs through 2050 that underlay that net present value calculation ranged from $594 billion to $627 billion, in 2020 dollars.
Second, our response also stated that these costs are relative to (i.e., net of) the Climate Action Council Scoping Plan Reference Case costs of $4.269 trillion, in 2020 dollars, through 2050 but we did not describe what the Reference Case includes. Absent clear definitions in the Scoping Plan documentation, we do know with certainty what comprises the Reference Case. As a result, Central Hudson neither stated nor implied that the costs in New York related to the reduction of carbon are around $4.6 trillion.
Both testimonies miss a complicating factor in the interpretation of the Reference Case results. Contrary to usual practice the Scoping Plan baseline was a case that included “already implemented” programs. In other words, there are some programs incorporated into the Reference Case that only exist to reduce GHG emissions. As a result, I agree it is impossible for anyone to determine the total Climate Act costs. Again Central Hudson ratepayers are the losers.
Supplemental Electric Vehicle Programs
Dutchess County recommended the removal of funding for the Company’s Supplemental Electric Vehicle (“EV”) Programs. The Dutchess County Testimonial stated:
Fifth on the list of Panel proposals, deals with electrifying the Central Hudson fleet of vehicles. Certainly, as vehicles are retired and a competitive EV market exists for the replacement of similar in-kind vehicles, EV’s should be purchased. However, to prematurely replace existing functional vehicles to advance climate goals in other market sectors unfairly burdens electric customers with addressing the emission needs of other sectors of the New York State economy. The transportation sector should be pulling its fair share to address climate change. The Panel’s position that it desires to lead by example is misplaced. The example that customers desire most from Central Hudson is a high quality, reliable energy product at the lowest reasonable price.
In a victory for commonsense Central Hudson agreed to remove these programs from this proceeding. The company and the PSC Staff agreed that sufficient funding was available within its authorized EV Make-Ready programs to conduct the additionally proposed activities.
Central Hudson Onsite Solar Proposal
The CLSP proposed the installation of solar arrays on Central Hudson offices in Catskill, Kingston. Eltings Corners, and Poughkeepsie. Dutchess County Testimony note that “Justification for the installations is that Central Hudson desires to be a “role model and leader in promoting local and carbon-free technologies.” Some quotes from the arguments:
Central Hudson customers have been exposed to significant amounts of leadership distribution in the State of New York. If there is one area in New York State where the State can claim a significant amount of leadership distribution it is in the area addressing climate change. Electric customers are or will be on the hook for contributing billions of dollars of personal fonds to meet the State’s leadership initiatives.
……
From the current day to 2050 the State measures success through partnerships, outreach and education. and workforce and economic development. implementing the Plan produces no measurements of electric or natural gas customer cost savings, or reducing climate change threats, or reducing carbon in the atmosphere in Dutchess County.
……
To reiterate. Central Hudson’s desire to “support the state’s ambitious solar generation goals” increasing customer costs to Dutchess County customers. in order to promote partnerships, education, and development, provides no tangible Dutchess County customer benefits.
The Rebuttal Testimony responds to the question whether Central Hudson agrees with Dutchess County’s characterization of the Company’s Onsite Solar proposal as increasing customer costs without providing tangible benefits?
No. The Onsite Solar proposal benefits customers in that it contributes to CLCPA emissions reductions targets and by setting an example, the project could encourage customers to participate in distributed generation projects, which lower their energy costs.
They did not respond to the reasons provided in the Dutchess County Testimony. Probably because there is no reasonable response. In my opinion, this Central Hudson program is transparent pandering to the State’s narrative.
It is also possible that the company has looked at the long-term and thinks an energy future where everything is electrified might be good business. That is disappointing because I believe there are plenty of technical people at the company that know that the Climate Act net-zero transition plan is impossible on the mandated schedule and very unlikely in any event. There are too many untested components necessary for reliability and too many upgrades to infrastructure to keep it affordable.
Conclusion
I believe that low cost and reliability are overarching concerns for electric and gas ratepayers. The Hochul Administration has been hiding the total costs of the transition throughout the process. The other missing piece is an energy plan feasibility study that would enable Central Hudson to determine what aspects of the transition they will be expected to implement. This uncertainty and the desire to placate the political aspirations of the Administration to improve the chances for a favorable rate case outcome ultimately impacts ratepayers negatively. The double-digit rate increases for this Central Hudson rate case will become the norm until New Yorke voters demand the politicians back off.
There are many good points in the Dutchess County Testimony relevant to the Climate Act net-zero transition. The following example sums up the problem:
The purpose of Dutchess County government is to serve the citizens of the County and to fulfill its fiduciary responsibilities to provide a safe clean environment promoting fulfilling life styles. In commenting on the Draft Scoping Plan, the County points out the economic pain being imposed on individuals and businesses and the extreme societal risk created by replacement of reliable, secure energy infrastructure with intermittent renewables. While affirming its support for solar and wind power the County notes that the feasibility of meeting arbitrary timing mandates is slim to none but in the process of attempting to meet those mandates the State will require that residents help fund trillions of dollars of unproven energy systems. CO2 emissions are a world-wide phenomenon and for all the pain, sacrifice, and cost the State’s contribution to the reduction in world wide emissions is miniscule. The transition required under the Plan for transportation, buildings, residences, is massive and to avoid catastrophic New York State economy collapse a modified plan is imperative.
Sometimes I just don’t have time to put together an article about specific posts I have read about the net-zero transition and climate change that I think are relevant. This is a summary of posts that I think would be of interest to my readers.
I have been following the. Climate Leadership & Community Protection Act (Climate Act) since it was first proposed and most of the articles described below are related to the net-zero transition. I have devoted a lot of time to the Climate Act because I believe the ambitions for a zero-emissions economy embodied in the Climate Act outstrip available renewable technology such that the net-zero transition will do more harm than good. The opinions expressed in this article 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.
Francis Menton uses the work of Nuclear New York to describe the status of the New York transition to net-zero. He concludes:
Out of 152.3 TWh of electricity produced or imported in 2023, fossil fuels continued to provide 63.3 TWh (41.5%). Most of the imports (14.5%) are undoubtedly from fossil fuels as well. Wind/solar/other provided just 12.1 TWh, or 7.9% of the total, barely up from about 6% in 2019. And that’s now suddenly going to go to 70% by 2030? Ridiculous. Meanwhile, the big story leaps off the page, as the Nuclear New York guys emphasize in the headline. The State forced the premature closure of two nuclear plants in 2020 and 2021, which caused the (carbon free) nuclear share of the total to drop from about 29% to only 18%; and almost all of that was taken up by two new natural gas plants, causing the fossil fuel share of the total to soar from only 34% to 41.5%. No person looking at this chart would ever conclude that New York has spent the past five years embarked on a crash program to replace fossil fuels with wind and solar. That process is going absolutely nowhere.
Ed Reid, Jr. discusses issues associated with consumers paying for the costs of the net-zero transition. Reid explains that the proposed electric system that depends upon wind and solar changes the cost allocation dynamics. It is evident in New York that the money needed to just upgrade the grid are leading to marked rate increases. I thought this was interesting:
Electric utilities earn a return on net physical plant in service (rate base). They are therefore faced with a Hobson’s Choice. Utilities could require that the intermittent renewable generation attached to their grids be dispatchable, in which case the investment in storage would be made by the renewable developers, increasing their delivered electricity costs, while the utilities” rate base and earnings potential declined as fossil generation was removed from service. Alternatively, the utilities could invest in the storage required to stabilize renewable generator output, increasing the utilities’ rate base investment and earnings potential, while accepting responsibility for increasing electricity costs.
In my opinion, renewable energy developments should be paid one rate for dispatchable power and a much lower rate if not dispatchable. This would reveal the true cost of their electricity and hasten the inevitable backlash of the transition because it is unaffordable.
John Robson at Climate Discussion Nexus argues that the arguments that climate alarmism is a fraud is wrong. In response to claims that the manipulated temperature data record is a scam he writes:
We take a very different view of al the deliberate and highly unscientific tampering with evidence. We think the zealots at NOAA, and a great many other places, are not trying to scam us with claims they secretly think are untrue. Instead, they are so utterly persuaded that their alarmist theory is right that when the data don’t fit it, as happens often, they conclude that the data must be wrong. For one thing, if they were cheating on purpose, they’d hide it better. And for another we think that after a while the perpetrators of a known fraud would tire of constantly lying. It’s easier to believe climate alarmists are wedded to a flawed theory and have constructed ingenious ways to rationalize its many failures without having to face the possibility that it might be untrue.
Ron Clutz at Science Matters describes an article by John Tamny that explains the root cause of fears about global warming/climate change in his Real Clear Markets article Warming and Left Wing Professors Worry You? You Must Be Rich. He argues that the worries about climate change come from individuals that do not have to worry about weather extremes because, in large part, fossil fuels have made their lives safer and better. The result is that they have time to worry about less important issues. This inability to balance risks and benefits is very frustrating to me and I agree with Tamny that it is a primary driver of the climate risk scare.
I do not believe that the Hochul Administration has adequately addressed the Climate Act impacts on reliability, affordability, and the cumulative environmental impact of all the wind and solar projects necessary for the net-zero transition. David Wojick describes the Bureau of Ocean Energy Management Programmatic Environmental Impact Statement for a combination of coming offshore wind projects and concludes that this analysis is a joke. If you share my concerns about the impacts, please submit comments by February 27. There is a link to submit comments here.
Pierre L. Gosselin writing at the No Tricks Zone has compiled a list of 160 papers that have found extremely low CO2 climate sensitivity. The correlation between rising global temperatures and increasing CO2 concentrations does not prove causation!
Professor Richard Lindzen explains that the notion that global average temperature anomaly constitutes ‘climate’ is attractive due to its simplicity. Unfortunately, that doesn’t mean that it is correct.
My previous post summarized the presentation given by Zachary Smith from the New York Independent System Operator (NYISO) describing Dispatchable Emissions-Free Resources (DEFR). All credible projections for the generating resources needed for the zero emissions target in New York’s Climate Leadership & Community Protection Act (Climate Act) include this new category of generating resources called Dispatchable Emissions-Free Resources (DEFR). It is necessary to keep the lights on during periods of extended low wind and solar resource availability. This post uses the cost projections for recently awarded United Kingdom contracts for commercial scale green hydrogen production projects to estimate how much Climate Act DEFR might cost.
I have followed the Climate Act since it was first proposed, submitted comments on the Climate Act implementation plan, and have written over 380 articles about New York’s net-zero transition. The opinions expressed in this post do not reflect the position of any of my previous employers or any other organization I have been associated with, these comments are mine alone.
Overview
The Climate Act established a New York “Net Zero” target (85% reduction in GHG emissions and 15% offset of emissions) by 2050. It includes an interim 2030 reduction target of a 40% reduction by 2030 and a requirement that all electricity generated be “zero-emissions” by 2040. The Climate Action Council (CAC) is responsible for preparing the Scoping Plan that outlines how to “achieve the State’s bold clean energy and climate agenda.” In brief, that plan is to electrify everything possible using zero-emissions electricity. The Integration Analysis prepared by the New York State Energy Research and Development Authority (NYSERDA) and its consultants quantifies the impact of the electrification strategies. That material was used to develop the Draft Scoping Plan outline of strategies. After a year-long review, the Scoping Plan was finalized at the end of 2022. In 2023 the Scoping Plan recommendations were supposed to be implemented through regulation, PSC orders, and legislation. Not surprisingly, the aspirational schedule of the Climate Act has proven to be more difficult to implement than planned and many aspects of the transition are falling behind. DEFR is a particularly challenging problem. When political fantasies meet reality, reality always wins.
New York Net-Zero Transition DEFR
The presentation given by Zachary Smith summarized in my recent post gave an overview of the DEFR issue. I am not going to repeat the descriptive information again. For the purposes of this article, the Integration Analysis identified the need for a generating resource that could be dispatched as needed and did not have any emissions. The placeholder technology listed in the Integration Analysis was green hydrogen. The following table lists the projected capacity for DEFR in the NYISO the 2021-2040 System & Resource Outlook and the Integration Analysis. Note that the Resource Outlook projecta that 44,750 MW of DEFR will be needed by 2040, that the Integration Analysis Strategic Use of Low-Carbon Fuels scenario projects 17,992 MW by 2040, and that in 2019 the fossil fuel generation in the state was 26,262 MW.
The energy production projected for DEFR from the NYISO Resource Outlook and the Integration Analysis are shown in the following table. The largest difference between the two projections is that NYISO projects that DEFR will generate ten times more energy. It turns out that NYISO has DEFR generating 14% of the total energy in 2040 but Integration Analysis projects only 1%. I am very disappointed that the Hochul Administration has not reconciled the two projections.
Green Hydrogen Production
Proponents of zero emissions energy sources tout the use of “green” hydrogen. This is hydrogen that is produced using renewable energy rather than other fossil fuels or other sources. It is recognized that over-building wind and solar is a necessary part of an electric system that relies on these intermittent sources of power. One of the purported benefits of green hydrogen is that when the wind and solar availability is higher than the system load instead of curtailing excess wind and solar power that it could be used to power electrolyzers to create hydrogen. That is the theory, but the reality is that no one is producing hydrogen at commercial-scale yet.
Paul Homewood writing at the Not a Lot of People Know That blog described the recent announcement that the United Kingdom’s Department of Energy Security & Net Zero awarded contracts for green hydrogen projects. The announcement states:
Following the launch of the first hydrogen allocation round (HAR1) in July 2022, we have selected the successful projects to be offered contracts. We are pleased to announce 11 successful projects, totaling 125MW capacity.
HAR1 puts the UK in a leading position internationally: this represents the largest number of commercial scale green hydrogen production projects announced at once anywhere in Europe. This round will provide over £2 billion of revenue support from the Hydrogen Production Business Model, which will start to be paid once projects become operational. Over £90 million from the Net Zero Hydrogen Fund has been allocated to support the construction of these projects.
We have conducted a robust allocation process to ensure only deliverable projects that represent value for money are awarded contracts. The 11 projects have been agreed at a weighted average [footnote 1] strike price of £241/MWh (£175/MWh in 2012 prices). This compares well to the strike prices of other nascent technologies such as floating offshore wind and tidal stream.
The thing that caught my eye in Homewood’s article was that there were cost numbers: “The 11 projects have been agreed at a weighted average strike price of £241/MWh”. In renewable energy contracts the government agrees to a “strike price” per megawatt-hour that the renewable energy developer will receive for its delivery of electric energy produced by the renewable energy source. In this case electric energy from the green hydrogen source. The previous table lists the DEFR electric energy expected so as a first cut estimate I simply multiplied the expected MWh by the strike price. The following table shows that green hydrogen production could cost between $10.4 billion and $1.1 billion per year by 2040. This is the annual cost and does not include any construction subsidies.
Discussion
This just represents the start of the costs for the green hydrogen DEFR support. Making it is just part of the process. It has to be stored, transported to where it will be used, and, if the zealots on the Climate Action Council have their way, used in fuel cells. Each of those components adds costs. Homewood points out two other issues:
What is interesting is that the strike prices will be tied to changes in the market price of gas: “The subsidy will vary relative to changes in the reference (natural gas) price”.
The schemes all appear to be electrolyzers, and they all claim that only renewable electricity will be used, an absurd assumption! None of them say what they will do when there is not enough wind and solar power to meet demand – will they idle their plants, or will they carry on as usual taking whatever power the grid can supply?
That is not all. One of the things I have wondered about is process efficiency. When making anything the most efficient thing to do is to get the process up and running efficiently and just let it go. Depending on variable wind and solar makes that a challenge. Is New York’s plan going to include its own energy storage to make the process work well? I see no realistic scenario where this will work.
Conclusion
The Climate Action Council did not fully acknowledge the necessity or the challenge of the DEFR technology. The Department of Public Service Proceeding 15-E-0302 is intended to “identify technologies that can close the gap between the capabilities of existing renewable energy technologies and future system reliability needs, and more broadly identify the actions needed to pursue attainment of the Zero Emission by 2040 Target” directly contradicts the Council’s position. This post suggests that the placeholder DEFR option of green hydrogen could adversely affect affordability even if viable DEFR technologies can be identified.
As part of the Department of Public Service Proceeding 15-E-0302 a technical conference was held on December 11 and 12, 2023 entitled Zero Emissions by 2040. A zero-emissions electric system is a key part of New York’s Climate Leadership & Community Protection Act (Climate Act) and all credible projections for the generating resources needed for the zero emissions Climate Act target have noted that a new category of generating resources called Dispatchable Emissions-Free Resources (DEFR) is necessary to keep the lights on during periods of extended low wind and solar resource availability. This post summarizes the presentation given by Zachary Smith from the New York Independent System Operator (NYISO) describing DEFR.
I have followed the Climate Act since it was first proposed, submitted comments on the Climate Act implementation plan, and have written over 380 articles about New York’s net-zero transition. The opinions expressed in this post do not reflect the position of any of my previous employers or any other organization I have been associated with, these comments are mine alone.
Overview
The Climate Act established a New York “Net Zero” target (85% reduction in GHG emissions and 15% offset of emissions) by 2050. It includes an interim 2030 reduction target of a 40% reduction by 2030 and a requirement that all electricity generated be “zero-emissions” by 2040. The Climate Action Council (CAC) is responsible for preparing the Scoping Plan that outlines how to “achieve the State’s bold clean energy and climate agenda.” In brief, that plan is to electrify everything possible using zero-emissions electricity. The Integration Analysis prepared by the New York State Energy Research and Development Authority (NYSERDA) and its consultants quantifies the impact of the electrification strategies. That material was used to develop the Draft Scoping Plan outline of strategies. After a year-long review, the Scoping Plan was finalized at the end of 2022. In 2023 the Scoping Plan recommendations were supposed to be implemented through regulation, PSC orders, and legislation. Not surprisingly, the aspirational schedule of the Climate Act has proven to be more difficult to implement than planned and many aspects of the transition are falling behind. DEFR is a particularly challenging problem. When political fantasies meet reality, reality always wins.
Presentation
The presentation given by Zachary Smith gave an overview of the DEFR issue. In his first slide (shown below) he gave an overview of the generating resource outlook to make the point that a large amount of new generating resources needs to be developed. I believe that the estimates are from the 2021-2040 System & Resource Outlook. For context I have included a table that lists the capacity for the different resources for one of the Resource Outlook scenarios and one of the scenarios from the Integration Analysis. Of particular note, both projections estimate that DEFR capacity (MW) will be similar to the amount of current fossil capacity.
The ultimate problem for reliability in an electric system that depends on wind and solar is illustrated in the following slide from Smith’s presentation. It highlights a 7-day wind lull when the average wind capacity is 25%. The sum of the grey area under the curve during that period is the amount of energy (MWh) that must be provided by DEFR sources based on an analysis of historical weather data. If there are insufficient resources during a wind lull, then load cannot be met. The consequences of that situation would be catastrophic.
In order to meet this need for dispatchable resources Smith explained that dispatchable emission-free resources (DEFRs) must be developed and deployed throughout New York:
As resources shift from fossil generators to zero emission resources, essential grid services, such as operating reserves, ramping, regulation, voltage support, and black start, must be available to provide New Yorkers with a reliable and predictable electric system that consumers require.
DEFRs will be required to provide both energy and capacity over long durations, as well as the reliability attributes of retiring synchronous generation. The attributes do not need to be encapsulated in a singular technology, but in aggregate the system needs a sufficient collection of these services to be reliable.
The NYISO must toe the political correctness line so Smith downplays the enormity of the challenge to bring DEFR on-line in the timeframe necessary to meet the arbitrary Climate Act schedule. Smith lists the attributes needed by DEFR in his presentation. In the following I offer my comments on his list of attributes.
Smith’s first attribute for DEFR is that it must have “dependable fuel sources that are carbon free and allow these resources to be brought online when required”. Clearly intermittent wind and solar do not meet this fundamental requirement.
The second DEFR attribute is that it must be “non-energy limited and capable of providing energy for multiple hours and days regardless of weather, storage, or fuel constraints”. This is a particular concern of mine. Wind and solar resources correlate in time and space. In other words, when the wind is light at one wind farm in New York it is very likely that all the wind turbines are experiencing light winds. The seven-day wind lull example in the dispatchable resources needed figure illustrates the problem. If there are insufficient resources during that wind lull, then load cannot be met. My concern is that I think we do not know what the worst case low renewable resource availability period is. Until there has been more analysis done then I believe that the New York electric grid is risking catastrophe.
The NYISO operators balance generation with load constantly. Smith describes several attributes necessary for this requirement. DEFR must be able to “to follow instructions to increase or decrease output on a minute-to-minute basis”. There has to be “flexibility to be dispatched through a wide operating range with a low minimum output”. Finally, DEFR must be “fast ramping to inject or reduce the energy based on changes to net load which may be driven by changes to load or intermittent generation output”.
In addition to the attributes needed when units are operating, there are startup attributes. DEFR must be “quick-start to come online within 15 minutes” and capable of “multiple starts so resources can be brought online or switched off multiple times through the day as required based on changes to the generation profile and load”. Smith explains that a range or DEFR generation will likely be required so not every DEFR has to be capable of every attribute for matching load but sufficient amounts for the system requirement will be needed.
In addition to the generating requirements that cannot be supplied by wind and solar there are ancillary support services for the transmission system. Smith describes three transmission support DEFR attributes:
Inertial Response and frequency control to maintain power system stability and arrest frequency decline post-fault;
Dynamic Reactive Control to support grid voltage; and
High Short Circuit Current contribution to ensure appropriate fault detection and clearance.
Smith’s presentation lists the attributes of twelve sample technologies in the following slide. When I started working for Niagara Mohawk in 1981 utilities were responsible for providing the generation for load in their service territories. They were proud of the diversity of their generation fleet that included coal-, gas- and oil-fired fossil, hydro, pumped storage, and nuclear. The generation all had a dependable fuel source and only the pumped hydro was energy limited but that was not an issue because it was used so shave diurnal peak loads. Only nuclear was not dispatchable but that did not matter because it was used for unvarying base load. There were resources in each system to provide all the other reliability attributes. Demand response was used sparingly but was included.
Attributes of Sample DEFR Technologies
In the future grid the insistence that all fossil fired units have to be shut down means that seven technologies that meet some of the necessary attributes will be required. The added complexity of these technologies does not increase resiliency because wind, solar, battery and demand response are all energy limited. Ancillary support services will be a major consideration because wind, solar and battery do not provide those services. Just from this overview, it is clear that affordability and reliability will be challenges.
Conclusion
Smith’s presentation is an excellent overview of need, attributes, and some potential resources that meet the need for dispatchable emissions-free generation. Any suggestion that some combination of these resources are not needed is simply wrong. Unsaid is the relative difficulty trying to develop these resources to meet the Climate Act net-zero transition schedule.
There are two fundamental drivers for New York’s Climate Leadership & Community Protection Act (Climate Act – the presumption that there is an existential threat from climate change and that the transition away from greenhouse gas (GHG) emitting energy sources requires no new technology and will be cheaper because the wind and sun energy is free. I disagree with both positions. This article addresses the cost fallacy based on a new analysis at the Cato Institute.
I have followed the Climate Act since it was first proposed, submitted comments on the Climate Act implementation plan, and have written over 380 articles about New York’s net-zero transition. The opinions expressed in this post do not reflect the position of any of my previous employers or any other organization I have been associated with, these comments are mine alone.
Overview
The Climate Act established a New York “Net Zero” target (85% reduction in GHG emissions and 15% offset of emissions) by 2050. It includes an interim 2030 reduction target of a 40% reduction by 2030 and a requirement that all electricity generated be “zero-emissions” by 2040. The Climate Action Council (CAC) is responsible for preparing the Scoping Plan that outlines how to “achieve the State’s bold clean energy and climate agenda.” In brief, that plan is to electrify everything possible using zero-emissions electricity. The Integration Analysis prepared by the New York State Energy Research and Development Authority (NYSERDA) and its consultants quantifies the impact of the electrification strategies. That material was used to develop the Draft Scoping Plan outline of strategies. After a year-long review, the Scoping Plan was finalized at the end of 2022. In 2023 the Scoping Plan recommendations were supposed to be implemented through regulation, PSC orders, and legislation. Not surprisingly, the aspirational schedule of the Climate Act has proven to be more difficult to implement than planned and many aspects of the transition are falling behind. When political fantasies meet reality, reality always wins.
Cato Report
Travis Fisher described the high cost of offshore wind policy. He argues that eventually political support for offshore wind will have to confront the costs: “Recent polling suggests that just 38 percent of Americans are willing to increase their energy costs by $1 per month to address climate change.” He goes on to show that offshore wind will cost much more.
He makes a compelling case that “offshore wind mandates are bad public policy because they simply cost too much and would not be economically viable without taxpayer support”. He also points out that there are significant environmental impacts. He explained that the political targets are coming to grips with these issues:
In contrast to the ease and simplicity of issuing aspirational offshore wind plans, policymakers are now confronting the reality that offshore wind faces many obstacles. The second half of 2023 brought story after story of canceled or renegotiated contracts for offshore wind. BP and Equinor canceled their contract with the state of New York; Ørsted canceled two large projects in New Jersey; and developers in Massachusetts canceled four projects totaling 2,400 MW of offshore wind.
Unfortunately, the politicians have not adjusted their policies:
With such high electricity prices, one might expect political leaders to attempt to reduce the burden of the energy costs their constituents pay. Instead, policymakers in these states have insisted on mandating offshore wind, which will invariably increase electricity rates and impose a higher federal spending and tax burden on the country. There are several ways of looking at the cost of electricity from specific resources, such as wind off the East Coast of the United States. Unfortunately, offshore wind is expensive by every measure.
The reason for this post is Fisher’s explanation of different ways of looking at the cost of electricity.
One way to subsidize offshore wind is through Power Purchase Agreements (PPAs) and Levelized Revenue of Energy (LROE). Fisher explains:
PPA prices are a generous way to examine the cost of offshore wind. They are the price paid by the offtakers of the energy from offshore wind projects—PPAs do not explicitly show the full cost paid by retail electricity consumers and taxpayers. These contract prices are usually expressed in wholesale units of dollars per megawatt‐hour ($/MWh).
As one example, the Vineyard Wind project off the coast of Massachusetts has a levelized PPA price of about $98/MWh (escalating from a lower base price to a higher final price at the end of a twenty‐year contract). As the National Renewable Energy Laboratory explained in 2019:
“This LROE estimate for the first commercial‐scale offshore wind project in the United States appears to be within the range of LROE estimated for offshore wind projects recently tendered in Northern Europe with a start of commercial operation by the early 2020s. This suggests that the expected cost and risk premium for the initial set of US offshore wind projects might be less pronounced than anticipated by many industry observers and analysts.”
Other operational projects, like the South Fork project in New York, don’t advertise the PPA price but have stated that “the power from South Fork Wind … will cost the average ratepayer between $1.39 and $1.54 per month when it starts operating.” (Recall that fewer than 40 percent of Americans are willing to spend $1 monthly to address climate change.)
In short, PPA prices tend to put the cost of offshore wind projects in the best light.
The State of New York has not admitted that even these best-case costs “do not compare well to clearing prices in wholesale markets”. Comparison to current prices shows that the PPA costs are much higher.
The second way to look at the cost of electricity is through the Levelized Cost of Energy (LCOE). Fisher describes the parameter:
LCOE is a common measure of the cost of electricity from a given class of resources. LCOE boils down construction and operating costs into a single cost estimate (in dollars), divided by the energy output of the plant over its lifetime (in watt‐hours). Hence the familiar unit of dollars per megawatt‐hour. LCOE is a straightforward way to get a sense of the levelized (or averaged‐out) cost of a standalone power plant.
According to recent LCOE estimates from EIA, the unsubsidized cost of offshore wind exceeds $120/MWh and is among the most expensive generation resources. The consulting firm Lazard also publishes LCOE estimates that have become common reference points. In the latest Lazard research, the LCOE for offshore wind ranged between $72/MWh and $140/MWh.
Fisher notes that if the LCOE parameter is used then “offshore wind compares favorably to the highest‐cost natural gas generators ($115–221/MWh) but not to the lowest‐cost renewables ($24–75/MWh for onshore wind and $24–96/MWh for utility‐scale solar photovoltaics [PV]).” However, this parameter only considers the cost of the generating capacity.
Fisher explains that the there is a third way to look at the cost of electricity: the Full Cost of Electricity (FCOE) and Levelized Full System Cost of Electricity (LFSCOE). He notes that:
Recently, scholars have expanded the LCOE model to include spillover costs that are borne by other generators on the system. To remedy the analytical shortcomings of LCOE, the FCOE approach zooms out and considers the all‐in cost of the entire electricity system. This is the appropriate measure to use when judging society‐wide costs because the full system costs are ultimately borne by retail ratepayers (and by taxpayers when subsidies are involved, as they are today).
The most important element of FCOE that is missing from LCOE is the cost to the rest of the system of intermittent output. Intermittent or “non‐dispatchable” generation always requires backup and balancing help from controllable or “dispatchable” resources to satisfy total electricity demand; however, the cost of making other resources fluctuate their output to accommodate intermittent generation—by backing down in times of high intermittent production and ramping up in times of low intermittent production—is not captured in LCOE estimates.
A group of authors who favor using the FCOE of solar PV and onshore wind said, “LCOE is inadequate to compare intermittent forms of energy generation with dispatchable ones and when making decisions at a country or society level.”
The LFSCOE are defined as the costs of providing electricity by a given generation technology, assuming that a particular market has to be supplied solely by this source of electricity plus storage. Methodologically, the LFSCOE for intermittent or baseload technologies are the opposite extreme of the LCOE. While the latter implicitly assume that a respective source has no obligation to balance the market and meet the demand (and thus demand patterns and intermittency can be ignored), LFSCOE assume that this source has maximal balancing and supply obligations.
For our purposes what does that mean for costs? Fisher explains
Under the LFSCOE assumptions, the cost of onshore wind in Texas is approximately seven times higher than its LCOE (an LFSCOE of $291/MWh compared to an LCOE of $40/MWh). The details of applying an LFSCOE to offshore wind would only be slightly different from applying it to onshore wind. Specifically, offshore wind has a slightly higher capacity factor than onshore wind (about 43 percent versus 34 percent in 2018, according to the International Renewable Energy Agency’s 2019 “Future of Wind” report). However, offshore wind is still an intermittent resource, meaning its LFSCOE is higher than its LCOE.
Conclusion
While the focus of this analysis was on offshore wind the differences between the three ways of looking at electricity costs is applicable to onshore wind and solar too. The FCOE and LFSCOE methods of calculating electricity costs are much better approaches for estimating the total costs. When using those parameters the costs of renewables are much more expensive than current electricity prices. In addition, those parameters do not incorporate the cost of the dispatchable emission-free resource that credible New York analyses project are necessary for an electric system that eliminates fossil-fired generation.
Proponents of the net-zero transition disparage fossil fuel subsidies but the explicit and implicit subsidies for wind and solar far exceed them. The Levelized Full System Costs of Electricity calculates the implicit subsidies necessary to integrate wind and solar into the electric system. Fisher concludes:
Policymakers need to understand the full costs of their actions and come back to the shore. The American people simply don’t want to pay more for energy—not in their electricity bills and not in their tax bills.
Sometimes I just don’t have time to put together an article about specific posts I have read about the net-zero transition and climate change that I think are relevant. This is a summary of posts that I think would be of interest to my readers.
I have been following the Climate Leadership & Community Protection Act (Climate Act) since it was first proposed and most of the articles described are related to it. I have devoted a lot of time to the Climate Act because I believe the ambitions for a zero-emissions economy embodied in the Climate Act outstrip available renewable technology such that the net-zero transition will do more harm than good. The opinions expressed in this article 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.
New Year’s Prediction
I predict the following definition of unexpectedly will be used to describe a spike in the cost of energy prices in New York. Unexpectedly: adv. Frequently used by people who don’t know what they are doing, to describe unpleasant events or situations they have created.
An article at the Institute for Energy Research titled “Spain Increases its Renewable Share but Soon May Need to Replace its Windmills” highlights the aggressive renewable energy transition for Spain. Their plan has aggressive plans to implement wind and solar, includes manufacturing for almost the entire supply chain for wind turbines, and has a “green” hydrogen goal. Some noteworthy takeaways:
“Spain’s new government goal to double wind capacity means it would need to almost triple wind installations from current annual rates.? At the same time, “over one third of the existing turbines must be replace within five years.” In my opinion, the goal is unlikely.
“The wind industry in Europe, including Spain, is facing billion-euro losses, mainly due to competition from China, which has been developing its clean energy resources for decades and offers lower prices due to cheap coal power and government subsidization.” New York renewable manufacturing cannot escape the same competition problem.
The draft climate strategy sets a 2030 target of 11 gigawatts for electrolyzers, which would be used to make green hydrogen, up from 4 gigawatts. I would like to find a place where I could bet that will never happen.
Francis Menton and I both have wondered which jurisdiction’s net-zero transition plan will implode first. Based on this article, I would say Spain is coming up fast to the leaders.
A company in Australia uses dogs to count the victims of wind turbines in southern Australia.
The numbers are troubling. Each turbine yields four to six bird carcasses per year, part of an overall death toll from wind turbines that likely tops 10,000 annually for the whole of Australia (not including carcasses carried away by scavengers). Such deaths are in the hundreds of thousands in North America. Far worse are the numbers of dead bats: The dogs find between six and 20 of these per turbine annually, with tens of thousands believed to die each year in Australia. In North America, the number is close to a million.
It is interesting that “Ecologists have noticed that small bat species in particular are most likely to get struck by the blades when wind speeds are relatively low, around 4.5 to 11 miles per hour.” This means that the impacts to bats could be reduced by reducing operations during light winds when bats are present. Because they hibernate the turbines would still be available during those periods in the winter and in the summer the days are shorter so most of the time the turbines could be operating. I have not heard anyone suggest this commonsense mitigation technique or any other one in New York.
Roger Pielke Jr. notes that NOAA’s “billion dollar disasters” report this week:
On Tuesday, the U.S. National Oceanic and Atmospheric Administration (NOAA) will release with great fanfare the year-end update of its “billion dollar disaster” tally. If past is prologue, NOAA will vigorously promote the dataset in collaboration with environmental NGOs, reporters on the climate beat will uncritically parrot and amplify NOAA’s claims, and before long, the dataset will find itself cited in the peer-reviewed literature, identified by the U.S. government as a key indicator of human-caused climate change, and perhaps even cited by the U.S. president in support of the claim that all U.S. disaster costs are attributable to climate change.
In his post he shares a new preprint of a paper that he submitted to the new Nature journal, npj Natural Hazards. My paper, which was invited by the journal’s editors, is titled, Scientific Integrity and U.S. “Billion Dollar Disasters.” Pielke is not impressed with the disasters data set:
The NOAA billion dollar disaster dataset comprehensively falls short of NOAA’s guidelines for scientific integrity. The shortfalls documented here are neither small nor subtle. They represent a significant departure from NOAA’s long-term history of scientific integrity and excellence, which has saved countless lives and facilitated the nation’s economy. A course correction is in order.
He concludes that despite all the problems, it will eventually get sorted out because “science and policy are both self-correcting”. I do not disagree that the absurdity of the “existential threat of climate change that we are seeing before our eyes” narrative will ultimately fall apart. The question is whether it will fall apart before we go so far down the road of a disastrous energy policy that people freeze to death in the dark.
Empire Wind is being developed through a 50-50 joint venture between Equinor and bp. Empire Wind 1 and 2, have a potential capacity of more than 2 GW (816 + 1,260 MW). However, the developers announced on January 3 that they were going to terminate the Offshore Wind Renewable Energy Certificate (OREC) Agreement for the Empire Wind 2 project.
This agreement reflects changed economic circumstances on an industry-wide scale and repositions an already mature project to continue development in anticipation of new offtake opportunities. The decision recognizes commercial conditions driven by inflation, interest rates and supply chain disruptions that prevented Empire Wind 2’s existing OREC agreement from being viable.
Equinor and bp believe offshore wind can be an important part of the energy mix and are committed to maintaining substantial contributions to the state and local economy.
“Commercial viability is fundamental for ambitious projects of this size and scale. The Empire Wind 2 decision provides the opportunity to reset and develop a stronger and more robust project going forward,” said Molly Morris, president of Equinor Renewables Americas. “We will continue to closely engage our many community partners across the state. As evidenced by the progress at the South Brooklyn Marine Terminal, our offshore wind activity is ready to generate union jobs and significant economic activity in New York.”
Long story short, they saw an opportunity to get more money from New Yorkers and leapt at the chance. Now the question is whether the Hochul Administration’s will reassess the cost impacts to New Yorkers. Sorry, I had a memory lapse – they have never provided consumer cost estimates so why would they start now.
Richard Ellenbogen recently sent an email to his distribution that highlighted an inevitable problem with New York State’s net-zero mandate of the Climate Leadership and Community Protection Act (Climate Act). The plan is to electrify everything possible using renewable energy. That brings up the problem that the local electric distribution system is not up to the task so it is likely that electric use could be limited at times in New York’s future.
Ellenbogen is the President [BIO] Allied Converters and frequently copies me on emails that address various issues associated with the Climate Act. I have published other articles by Ellenbogen and a description of his keynote address to the Business Council of New York 2023 Renewable Energy Conference Energy titled: “Energy on Demand as the Life Blood of Business and Entrepreneurship in the State -video here: Why NY State Must Rethink Its Energy Plan and Ten Suggestions to Help Fix the Problems.” I recently described his presentation on New York’s Energy Transition that is a detailed explanation why the State’s quest for zero emissions electricity generated by wind and solar is doomed to failure.
There are only a few people in New York that are trying to educate people about the risks of the Climate Act with as much passion as I am but Richard certainly fits that description. He comes at the problem as an engineer who truly cares about the environment and how best to improve the environment without unintended consequences. He has spent an enormous amount of time honing his presentation summarizing the problems he sees but most of all the environmental performance record of his business shows that he is walking the walk.
Climate Act Overview
The Climate Act established a New York “Net Zero” target (85% reduction and 15% offset of emissions) by 2050. It includes an interim 2030 reduction target of a 40% reduction by 2030 and a requirement that all electricity generated be “zero-emissions” by 2040. The Climate Action Council (CAC) is responsible for preparing the Scoping Plan that outlines how to “achieve the State’s bold clean energy and climate agenda.” In brief, that plan is to electrify everything possible using zero-emissions electricity. The Integration Analysis prepared by the New York State Energy Research and Development Authority (NYSERDA) and its consultants quantifies the impact of the electrification strategies. That material was used to develop the Draft Scoping Plan. After a year-long review, the Scoping Plan recommendations were finalized at the end of 2022. In 2023 the Scoping Plan recommendations were supposed to be implemented through regulation and legislation. Ellenbogen’s discussion describes one of the issues that was not addressed in 2023.
Record Christmas Lights
Ellenbogen described a home in Union Vale, NY where the residents set the world record for most lights in a residential Christmas display with 720,420 lights in the display. He provided links describing the the record lights from the New York Times:
I cannot get around the Times paywall so I could not see those articles but found a relevant story at Good Morning America that includes a video.
Ellenbogen writes:
Independent of any issues raised in the article, the following comment by a neighbor stands out.
Bernadette and William Burke, who love to watch the show from their hot tub, but for years could not use their washing machine or dishwasher while the lights were on. Mr. Gay said the problem was resolved when the electric company put the Gay house on its own transformer.
He estimated the power requirements:
Below is a table of power consumption of various Christmas bulbs. Using a back-of-the-napkin calculation, the display probably draws about 75 – 100 KVA. Most utility transformers in residential areas are sized between 70 KVA and 150 KVA. Below are photos from a NYSERDA report that I wrote in 2010 for the reactive power project I did for them. Note that a transformer used to support five buildings in a Garden Apartment complex had a capacity of 150 KVA and a transformer for two buildings had a capacity of 75 KVA. Both of these transformers operated near their capacity on a hot summer day and would far exceed that capacity with widespread installation of heat pumps.
Ellenbogen compared the power consumption of the display to heat pumps and car charging that are components of the Scoping Plan outline of control strategies to meet the Climate Act mandates:
The three heat pumps in my home will draw about 22 KW at peak load for 250,000 BTU of heat transfer in heating mode (1000 watts per ton COP=3.52 ). The power draw in cooling mode is about 60 % of that (600 watts per ton COP=5.86 ). We also have gas furnaces with an output of 400,000 BTU that will operate on extremely cold days or will operate if there is an issue with the heat pumps.
My car charges at a peak load of 14,000 watts. I have seen loads of 38,000 watts on the power monitor at my house when I am charging the car during the winter. When I built my house, I had a 400 amp 3phase service installed. It can deliver 144 KVA ( 144,000 watts) at peak load and the transformer across the street is 150 KVA. Most newer homes might have a 200 amp single phase service (40 KVA) and older homes will have a 100 amp or 150 amp service (20 – 30 KVA).
Discussion
Ellenbogen argues that the fact that a neighbor was impacted by a large load by a neighbor has ramifications when everyone has to increase their electrical requirements:
The point is that if the utility system can’t support a Christmas display, even a large one, and allow the neighbors to wash their clothes at the same time, how is it going to support the massive load of heat pumps and vehicle charging that is being mandated. That combination will far exceed the demand of a Christmas light display. As I have mentioned previously, every transformer in the state is going to have to be replaced or have their service upgraded as occurred at the home in the article. The problem is that there is an acute transformer shortage along with a shortage of electricians and utilities are worried about having a sufficient number of transformers to recover after a bad storm, let alone having enough to rebuild the entire system.
Also note that the GMA piece on the record light display mentioned that the owners claim that their electric bill is only $300. New York utilities are installing smart meters that will eventually enable them to charge customers different rates at different times of the day. The idea is that they will increase rates to incentivize customers to reduce use during peak load periods. In the all-electric future the peak load will be in the early evening when homeowners get home from work and turn on appliances. I would not be surprised at all if the costs for the massive display might increase so much that they would be unable to afford the costs even with LED lights.
Although the utilities claim that customers will not lose control of their electric use, I suspect that is also inevitable because of the scale of the problem. As a result, someday Scrooge will say no you cannot have a record light show.
Conclusion
Ellenbogen said he was going to send a magic wand to the Public Service Commission to help them with the Climate Act transition because they are going to need all the help that they can get. I agree with his conclusion: “Since math and science have been thrown out the window in New York State, we might as well turn to the occult.”
Pragmatic Environmentalist of New York 