Climate Act – Page 21 – Pragmatic Environmentalist of New York

Navigating the physical realities of the energy transition

This post was also published at Watts Up With That

A recent McKinsey Global Institute report The hard stuff: Navigating the physical realities of the energy transition (McKinsey Report) describes the challenges of the energy transition transformation for those who want a decarbonized society. This post describes my review of the description of the power sector with respect to my primary concerns for the New York Climate Leadership & Community Leadership Act transition of the electric grid to zero-emissions by 2040. Those concerns are the need for a dispatchable emissions-free resource (DEFR) and the enormous risk associated with determining how much DEFR must be deployed to prevent blackouts in electric grids that depend on variable renewable energy resources, .i.e., wind and solar.

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 450 articles about New York’s net-zero transition. The opinions expressed in this article 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.

The McKinsey Report describes the realities of the global clean energy transition that proponents claim is necessary to address the existential threat of climate change. I think the authors did a good job explaining many of the complicated issues associated with the energy transition. The scope of the report is enormous because they are trying to cover the entire global energy system:

The energy system consists of the production, conversion, delivery, and consumption of energy resources across sectors as both fuels and feedstocks (that is, inputs for the production of different materials). The system is a massive, interlocking physical entity that has been optimized over centuries. It has served billions of people—if not yet all of humanity—well. But in an era in which countries and companies around the world are aspiring to address climate change, the high emissions resulting from the current energy system are now firmly in focus. The world has duly embarked on a huge transformation, centered on switching from the high-emissions assets and processes on which the system is largely based to new low-emissions solutions.

The summary describes the key points in the report:

The energy transition is in its early stages, with about 10 percent of required deployment of low-emissions technologies by 2050 achieved in most areas. Optimized over centuries, today’s energy system has many advantages, but the production and consumption of energy account for more than 85 percent of global carbon dioxide (CO2) emissions. Creating a low-emissions system, even while expanding energy access globally, would require deploying millions of new assets. Progress has occurred in some areas, but thus far has largely been in less difficult use cases.

Twenty-five interlinked physical challenges would need to be tackled to advance the transition. They involve developing and deploying new low-emissions technologies, and entirely new supply chains and infrastructure to support them.

About half of energy-related CO2 emissions reduction depends on addressing the most demanding physical challenges. Examples are managing power systems with a large share of variable renewables, addressing range and payload challenges in electric trucks, finding alternative heat sources and feedstocks for producing industrial materials, and deploying hydrogen and carbon capture in these and other use cases.

The most demanding challenges share three features. First, some use cases lack established low-emissions technologies that can deliver the same performance as high-emissions ones. Second, the most demanding challenges depend on addressing other difficult ones, calling for a systemic approach. Finally, the sheer scale of the deployment required is tough given constraints and the lack of a track record.

Understanding these physical challenges can enable CEOs and policy makers to navigate a successful transition. They can determine where to play offense to capture viable opportunities today, where to anticipate and address bottlenecks, and how best to tackle the most demanding challenges through a blend of innovation and system reconfiguration.

I am only going to consider the power sector and not the other six end-use sectors discussed. Twenty-five physical challenges are described for these sectors. Each of the challenges is described relative to the difficulty of the challenge. This review focuses on the power sector energy transition physical challenges that are shown in the following figure.

Exhibit E1: McKinsey Global Institute The hard stuff: Navigating the physical realities of the energy transition

The description of the power sector physical challenges explains:

Addressing physical challenges in power is fundamental to the entire transition because abating emissions in the huge energy-consuming sectors—mobility, industry, and buildings—requires sweeping electrification under typical decarbonization scenarios. Two difficult challenges arise: managing the variability of renewables such as solar and wind, as they grow their share of total generation; and doing so specifically for emerging power systems that need to grow, often more rapidly and by more than advanced power systems. These two are classified as Level 3 because addressing variability challenges would require the use of novel technologies that have not yet been deployed commercially and face other substantial barriers. Four other challenges, classified as Level 2, relate to constraints on scaling more established technologies, inputs, and infrastructure, where accelerated progress would be needed for the transition.

Quality Review Concerns

The two review concerns for a power sector depend upon weather-dependent resources that I think must be addressed in any assessment of the quality of the report are the need for a new resource to address long-term wind and solar deficits and the challenge of specifying how much of those resources is needed.

In my opinion, all credible analyses of future electric energy systems depending upon wind and solar must acknowledge the need for a new resource to backup up weather dependent resources that New York has named DEFR. Francis Menton explains that this creates a likely impossible challenge:

The reason is that the intermittency of wind and solar generators means that they require full back-up from some other source. But the back-up source will by hypothesis be woefully underused and idle most of the time so long as most of the electricity comes from wind and sun. No back-up source can possibly be economical under these conditions, and therefore nobody will develop and deploy such a source.

There is another aspect of DEFRs that needs to be considered. Menton also did a post on September 28, 2023 that covered a Report then just out from Britain’s Royal Society dealing with issues of long-term energy storage to back up wind and solar generators that concisely describes my other quality concern. He explains that the Royal Society had collected weather data for Britain for some 37 years and documented that “there are worst-case wind and sun “droughts,” comparable to rain droughts, that may occur only once every 20 years or more.”

The Royal Society: Large-scale electricity storage, Issued: September 2023 DES6851_1, ISBN: 978-1-78252-666-7

To be a credible analysis of future power sector projected needs, ten both of these concerns need to be considered. If they are not included, then the complexity will be underestimated and the magnitude of resources required overlooked.

McKinsey Report Analysis of Concerns

For the power sector the McKinsey report addressed six challenges. I will describe the relevant challenges and mention the challenges that affect the global system but not the New York power sector.

Challenge 1: Managing renewables variability (Level 3):

With the energy transition, Variable Renewable Energy (VRE) sources, such as solar and wind, would be required to grow and reach a relatively high share of total generation. As this happens, the output of power systems would become progressively more variable, exceeding demand on some days but falling substantially short on others. Consider Germany. VRE could potentially account for 90 percent of all power generation by 2050, in the McKinsey 2023 Achieved Commitments scenario. Nonetheless, there could still be about 75 days a year when VRE generation would be insufficient to meet a large share of demand (meaning that at least one-quarter of demand would have to be met by other sources) (Exhibit 6). VRE-heavy power systems would therefore require much more supply-side flexibility. This could come from storage (both power and heat), backup generation capacity (including thermal generation like gas power and beyond), and interconnections. Such flexibility solutions may need to scale by as much as two to seven times faster than overall power demand globally in the next three decades. However, these forms of flexibility in turn face significant barriers relating, for example, to critical inputs (for some forms of energy storage) and other factors such as market design mechanisms (for backup generation). Most critically, some of the technologies that would be crucial for providing flexibility to the power system over the course of seasons, including novel long-duration energy storage (LDES) and hydrogen-based generation, would need to scale hundreds of times by 2050 from a negligible base today.

The Challenge 1 description emphasizes the need for supply-side flexibility. Exhibit 6 notes that at least one quarter of the days will require backup resources to resolve VRE intermittency explaining that “novel long-duration energy storage (LDES) and hydrogen-based generation” is needed “over the course of seasons”. The example resources can be used for DEFR but it does not address my second concern, the worst-case wind and sun drought. This study appears to only consider average conditions, which is a common flaw in academic assessments. For electric system resource planners, the emphasis on reliability for all periods mandates that the analysis addresses extreme conditions. As a result, the magnitude of DEFR support necessary to keep the lights on at all times is underestimated in this analysis.

The second challenge, “scaling emerging power systems”, is also rated as Level 3. The description notes that “Many countries, especially those that are lower-income, need faster and more significant growth in their power systems to increase access to electricity.” This is not an issue for New York.

The description of Challenge 3: Flexing power demand (Level 2) notes that “Alongside supply-side flexibility, there may be more opportunity for demand-side flexibility in power as the world electrifies” and does not address either concern. The McKinsey Report claims that this kind of flexibility could provide as much as 25 percent of the total amount needed to accommodate VRE in 2050, in the IEA’s Net Zero scenario. However, it exposes a weakness in studies that use averages. Industry planners do not rely on demand-side flexibility because in the worst-case scenarios the capability of those resources is much lower and can be essentially worthless. This means that studies that only look at averages miss the point that to keep the lights on demand-side resources may not displace as many supply-side resources during the worst-case scenario as they project. In my opinion, the value of any resource that does not provide firm energy during the worst-case scenario should be downrated.

Challenge 4, “securing land for renewables” is rated as Level 2. This is a problem for any jurisdiction that tries to rely on VRE because wind and solar resources are diffuse. This challenge does not address either of my concerns.

Challenge 5: Connecting through grid expansion (Level 2):

With the growth of the power system and the addition of more geographically dispersed energy sources such as VRE, grids would need to become larger and more distributed, interconnected, and resilient. They may need to more than double in size by 2050, growing 40 to 50 percent faster than they are currently. However, lead times for the permitting and construction of transmission lines are long, especially in mature markets such as the EU and the United States, where they have tended to be between five and 15 years. Among other initiatives, accelerating permitting with new streamlined processes could facilitate the expansion of grids.

This challenge does not address either of my concerns.

Challenge 6: Navigating nuclear and other clean firm energy (Level 2):

Increased deployment of clean firm power, such as nuclear, geothermal, and low-emissions thermal plants (for example, hydrogen, biogas, and natural gas with CCUS), could reduce the challenges of variability, land use, and grid expansion. Nuclear is an example of a clean firm technology that is mature and gaining momentum. At COP28, for example, a group of economies announced commitments to triple nuclear capacity by 2050. Nonetheless, increasing the deployment of nuclear requires managing complex engineering, supply chain, skills, and siting issues as well as safety considerations. In combination, these issues could result in long lead times, frequent delays, and cost overruns. Addressing these would require, for instance, standardizing the design of nuclear plants and building multiple plants using the same designs to leverage shared learning, training workforces in the skills they need, and developing necessary supply chains.

These issues affect the deployment of DEFR but do not address my concerns directly.

Discussion

Although there is useful information in this report, it fails to address my concerns about the need for a new resource to address the specific problem of worst-case wind and solar “droughts” and the related problem of defining just how much of the new resources will be needed to prevent blackouts for the worst of the worst-case periods.

I think the main problem can be traced to the use of averages rather than worst-case conditions for evaluation of resource requirements. I searched the document for the terms “worst” and “extreme”. The term “worst” did not appear. The term “extreme” did show up relative to battery electric vehicle use and heat pumps. The McKinsey Report noted that special considerations were needed for the worst-case extremes for those applications. Unfortunately, the authors did not extend that consideration to the power sector.

There is one other consideration unmentioned in the power sector challenges. Wind and solar resources do not provide the ancillary services necessary to support the transmission system. The McKinsey Report did note that transmission requirements would be a challenge but overlooked this aspect.

Conclusion

The report concludes that:

The path of the energy transition will not be straightforward, and stark trade-offs and consequences lie ahead. Taking time for the transition to play out, as in many physical transformations of the past, could allow for the physical realities of the transformation to be confronted more gradually with time to innovate and scale new low-emissions technologies, address bottlenecks, and reconfigure the system. While this may make navigating the physical challenges easier, such a path would almost certainly involve compromising on the climate goals that countries and companies across the world have agreed to, with consequences for rising physical risks. However, driving the transition forward without confronting physical realities would most likely compromise the performance of the energy system—and as a result challenge energy access, growth, prosperity, and support for the transition itself.

Alternatively, stakeholders could confront difficult physical challenges head-on—in fact, they could use an understanding of physical realities to guide the way forward to an affordable, reliable, competitive path to net zero. While many open questions remain on what precise path would enable the physical challenges to be addressed, this analysis sheds light on some crucial ingredients that would have to be present in a successful energy transition.

The power sector analysis appears to use averages to project future needs. As a result, it fails to address my concerns about the need for DEFR and the related risk that improper assessment of the amount of DEFR needed threatens the reliability of the electric system. The ultimate concern is that the conditions associated with extreme wind and solar droughts are also associated with extreme hot and cold weather when the electrified society will be most vulnerable if there is a blackout. The report sheds some light on crucial ingredients but overlooks a potential fatal flaw.

Clearly there is no question in the minds of the authors that the transformation to net-zero is necessary. The conclusion talks about trade-offs and consequences but does not acknowledge that there may not be an “affordable, reliable, competitive path to net zero” using VRE. Given the vulnerability risk, I remain convinced that the VRE transition will do more harm than good in New York and elsewhere. I think the nuclear option is the only path forward for those who want to decarbonize.

Draft NY Documents Requiring Public Comment

Keith Schue sent me an email with the following information that I believe would be of interest to readers here. New York State agencies have recently announced several draft documents that are out for public comment. It is confusing. When Keith sent this clarifying information, I asked for permission to send it out as a post and he graciously gave me permission.

Keith Schue is an electrical engineer and technical adviser on energy policy. Keith advocates for nuclear power. He recently co-authored a commentary in the Albany Times Union with climate scientist James Hansen, making a persuasive case for using nuclear in the future.

Overview

The Climate Leadership & Community Protection Act (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 GHG reduction target of 40%. Two targets address the electric sector: 70% of the electricity must come from renewable energy by 2030 and a requirement that all electricity generated be “zero-emissions” resources by 2040. The Climate Action Council (CAC) was responsible for preparing the Scoping Plan that outlined how to “achieve the State’s bold clean energy and climate agenda.” 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. Since then, the State has been trying to implement the Scoping Plan recommendations through regulations, proceedings, and legislation.

Keith describes three related documents and opportunities for public comments in the following sections. I have made some minor edits and added a few links. He describes each document and includes a suggestion for a possible comment.

Draft Blueprint for Consideration of Advanced Nuclear Technology

A number of states throughout the country are encouraging the development of advanced next generation nuclear reactors to meet our growing energy needs, remain economically competitive, significantly reduce greenhouse gas emissions, conserve farmland, and protect nature. During last month’s Future Energy Summit in Syracuse, Governor Hochul announced that New York ought to consider advanced nuclear power, too. However, several misguided “environmental” groups who either don’t understand energy or don’t care about those things have launched a misinformation campaign involving form-letters to the governor and NYSERDA intended to create the appearance that New Yorkers oppose nuclear power. They would rather see the state pursue an unproven, inefficient, ecologically-destructive energy strategy dominated by massive amounts of solar, wind, and batteries.

The due date for comments is Nov 8^th. A useful comment would be to say that if New York is serious about addressing climate change, providing ample reliable electricity essential for a growing economy, and protecting the integrity of rural land and nature, then it needs to join the 21st century by investing in dependable, compact carbon-free nuclear power.

Click here to read the draft Blueprint: Read Draft Blueprint

Click here to comment on the draft Blueprint: Comment on Draft Blueprint

Draft Scope of NYS Energy Plan

Although related, this should not be confused with the Climate Action Council’s Scoping Plan for implementation of the CLCPA that was adopted in Dec 2022. Every several years the New York Energy Planning Board is required to update its overall energy plan for the state. The process begins with an initial document that identifies a “scope” of work–meaning the set of things to be evaluated in the plan. That draft “scope” was released last month for public comment with a defined planning horizon of 2040. This makes the CLCPA’s 2040 goal of carbon-free electricity particularly relevant. Unlike the CLCPA’s 70% renewable goal which only applies in 2030, the 2040 goal does not mandate an arbitrary quota of “renewables”. Instead, it simply mandates carbon-free electricity, which can include nuclear power.

The due date for comments is Nov 25^th. An important comment would be to say that if New York is serious about achieving carbon-free electricity as electricity demand doubles, it needs to invest in reliable and resilient nuclear power that is made in America, instead of focusing predominantly on wasteful, fragile, intermittent, and ecologically-harmful sources of energy made mostly in China.

Click here to read the draft Scope: Read Draft Scope

Click here to comment on the draft Scope: Comment on Draft Scope

Draft NYPA Renewables Strategic Plan

Historically, the New York Power Authority (NYPA) has been a well-run public entity that has provided NY residents and business with reliable, affordable electricity by building and operating large hydropower plants and various electric infrastructure projects. In the past, NYPA even helped to develop nuclear power. However, the Build Public Renewables Act adopted last year now forces NYPA to try installing solar, wind, and batteries even faster than the private sector is already doing with subsidies. NYPA’s draft plan appears to leverage its good credit to help rescue or expedite about 31 private-sector large-scale solar/wind/battery projects. It would also build about 9 such projects itself.

The due date for comments is around Dec 8^th. A useful comment would be to say that achieving carbon-free electricity requires firm reliable power. Therefore, throwing more public money and resources at intermittent generation not only jeopardizes reliability and affordability, but also ensures that NY will remain dependent on fossil fuels. Instead of focusing on solar panels and wind turbines that the private sector can install on its own, NYPA should do what it has historically done best by working on reliable public projects for the common good, like nuclear energy, hydropower, and utility infrastructure.

Click here to read the draft NYPA Renewables Plan: Read Draft NYPA Renewables Plan
Click here to comment on the draft NYPA Renewables Plan and see the schedule of Public Hearings: https://www.nypa.gov/renewables

Conclusion

Keith’s overview is apropos and I agree with him. I am on vacation so publishing someone else’s work is an easy way to keep the hits to the blog coming. All of these documents and issues are of interest to me, and I intend to comment. The bottom line is that if New York really wants to decarbonize, then nuclear must be part of the future energy mix or it will be impossible to achieve the aspirational targets.

Draft NYISO Reliability Needs Assessment Regulatory Policies Affecting Reliability

It has been a while since I have written about New York Independent System Operator (NYISO) reliability planning process documents. This post summarizes the section describing regulatory policies affecting reliability in the draft October 2024 draft Reliability Needs Assessment (RNA).

Overview

The rationale for the Climate Act is the existential threat of climate change and the Hochul Administration never misses an opportunity to describe every weather extreme as a more proof. 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. Two targets address the electric sector: 70% of the electricity must come from renewable energy by 2030 and a requirement that all electricity generated be “zero-emissions” resources by 2040. The Climate Action Council (CAC) was responsible for preparing the Scoping Plan that outlined how to “achieve the State’s bold clean energy and climate agenda.” 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. Since then, the State has been trying to implement the Scoping Plan recommendations through regulations, proceedings, and legislation.

NYISO Reliability Planning

The NYISO reliability planning process consists of two analyses: the Reliability Needs Assessment (RNA) and Comprehensive Reliability Plan (CRP). The RNA evaluates the adequacy and security of the bulk power transmission facilities over a ten-year planning period, the resources in megawatts (MW), and the locations where required to meet projected needs. If necessary, the NYISO will request solutions for identified needs. The CRP determines if the proposed solutions are viable and sufficient then documents the solutions meet the identified reliability needs.

As part of this continuous process the NYISO has released a “draft for discussion purposes only” of the 2024 RNA on October 4, 2024. The Regulatory Policies Affecting Reliability section caught my attention, so I wrote this article.

Regulatory Policies Affecting Reliability

A common theme in this blog is the risks to reliable electricity posed by political machinations. Although the NYISO is technically an independent organization there is tremendous political pressure for the organization to comport with the politically driven narrative of the Hochul Administration. The section discussing regulatory policies is carefully written so as not to offend the politicians:

Increasingly ambitious environmental and energy policies, evolving market rules, technological advancements, and economic factors impact the decisions by market participants and are accelerating the transition in the state’s resource supply mix. During this transition, the pace of both the addition of new resource additions and the retirement of older, higher-emitting resources are projected to exceed historical levels. Changes to demand patterns and the generation fleet driven by federal, state, and local government regulatory programs may impact the operation and reliability of New York’s bulk power system.

“May impact” operation and reliability is a massive understatement. Consider the following:

Compliance with federal and state regulatory initiatives and environmental and permitting requirements may require investment by the owners of New York’s existing thermal power plants in order to continue operation. If the owners of those plants must make significant investments to comply, the increased cost to continue operating could lead to the retirement of these resources needed to maintain the reliability of New York’s bulk power system and, therefore, could necessitate replacement.

The document lists eight public policy initiatives that could require investment. One of the initiatives is the “Peaker Rule:” that targets Nitrogen Oxide (NOx) emission limits for simple cycle and regenerative combustion turbines that provides an example of the challenges. This initiative should be a model for New York energy policy. The rule was needed for the state to comply with EPA requirements to reduce NOx to help reduce ozone concentrations. On the other hand, the simple cycle “peaker” turbines fulfill a critical reliability function. Recognizing this tradeoff the NY Department of Environmental Conservation (DEC), the generating companies, and NYISO worked out a plan to ensure that the facilities would eventually retire or install control equipment to reduce emissions on a proscribed schedule. The non-regulated owners of the facilities all determined that the market would not support control equipment investment and submitted plans to retire. The NYISO determined that temporarily retaining the peaker generators on the Gowanus 2 & 3 and Narrows 1 & 2 barges is necessary to address a reliability requirement, but the others have retired.

Another of the initiatives, “New York Power Authority (NYPA) Small Gas Power Plant Phase Out” is an example of an inappropriate energy planning initiative. The document describes it as impacting 517 MW nameplate capacity in New York City and Long Island. It requires a plan to phase out production of electricity from fossil fuels, considering clean replacement resources and impacts on emissions and system reliability. In particular,

NYPA is required to publish a plan by May 2025 to phase out the production of electricity from its seven small natural gas plants (simple-cycle combustion turbines) in New York City and Long Island by December 31, 2030, unless those plants are determined to be necessary for electric system reliability or emergency power service or energy from other sources that may replace energy from NYPA’s small plants would result in more than a de minimis net increase in emissions within a disadvantaged community.

The peaking power plant issue has become a major point of focus of the environmental justice community and proponents managed to convince politicians to include this legislation in the 2023-2024 enacted state budget. I described many issues with this bogus problem last February. In short, while there is no question that power plants do affect adjacent neighborhoods, their impacts are all less than the National Ambient Air Quality Standards and the contributions from buildings and transportation sectors are more impactful. In my opinion, that means that they are not as evil as portrayed, Furthermore, a DEC Cap and Invest program presentation noted that the power plants had negligible emissions relative to total state-wide emissions. On the other hand, they fulfill a critical reliability need.

The draft RNA explains that there are challenges for the replacing these resources:

Balancing the grid throughout this transition not only requires maintaining sufficient capacity to meet demand but also requires that new resources entering service comparably replace the capabilities and attributes of the resources leaving the system (e.g., fast starting/ramping and dispatchable both up and down, available when and for as long as needed, providing essential reliability services such as voltage and frequency control, support system’s stability during disturbances). Continued dialogue and engagement among Market Participants, policymakers, and the NYISO will be essential to support the planning processes in order to identify the needs and services required to maintain a reliable system during and after this transition period.

The NYPA Small Gas Power Plant Phase Out regulation affects modern units that have emission rates far lower than the old units affected by the Peaker Rule. The environmental justice advocates have the mistaken impression that they can be replaced by battery energy storage powered by wind and solar resources. This description lays down a marker. The bottom line is that the only resource that can provide the necessary attributes at this time is a fossil-fired generating unit. Wind, solar, and battery energy storage cannot replace the capabilities and attributes described.

However, given that there have been multiple attempts to permit new replacement fossil-fired generating units to replace the existing peaker units do not underestimate political attempts to deny reality.. The DEC has, under considerable political pressure in my opinion, refused to permit any of these proposed resources citing nothing more than the project being inconsistent with the Climate Act. Consequently, nothing to replace the old resources has been built.

Conclusion

The “Peaker Rule” promulgation and implementation predated the Climate Act. It was a common sense approach that provided environmental benefits and protected electric system reliability, Since then reliability concerns have been given short shrift and practical reliability solutions have not been permitted. The NYPA Small Gas Power Plant Phase Out regulation codifies the irrational New York energy policy approach whereby politicians claim to know better than the electric planner professionals responsible for maintaining a reliable electric system. Now the NYISO must deal with this legislation that is supposed to shut down existing power plants in favor of a magical resource that does everything needed without any environmental impacts in response to a mostly non-existent problem. At some point the Hochul Administration is going to have to step up and support the resources necessary to keep the lights on.

Catastrophic Costs of Green Energy

The New York State Comptroller Office released an audit of the NYSERDA and PSC implementation efforts for the Climate Leadership & Community Protection Act (Climate Act) titled Climate Act Goals – Planning, Procurements, and Progress Tracking. The audit found that: “The costs of transitioning to renewable energy are not known, nor have they been reasonably estimated”. This post describes a couple of articles that suggest that when the costs of the Climate Act transition are finally revealed they will be extraordinarily high.

I have followed the Climate Act since it was first proposed, submitted comments on the Climate Act implementation plan, and have written over 450 articles about New York’s net-zero transition. The opinions expressed in this article 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 and Background

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. Two targets address the electric sector: 70% of the electricity must come from renewable energy by 2030 and all electricity must be generated by “zero-emissions” resources by 2040. The Climate Action Council (CAC) was responsible for preparing the Scoping Plan that outlined how to “achieve the State’s bold clean energy and climate agenda.” 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. Since then, the State has been trying to implement the Scoping Plan recommendations through regulations, proceedings, and legislation.

To date, however, the costs of the transition have not been revealed. The Comptroller Report audit found that: “While PSC and NYSERDA have taken considerable steps to plan for the transition to renewable energy in accordance with the Climate Act and CES, their plans did not comprise all essential components, including assessing risks to meeting goals and projecting costs.” It noted that the “PSC is using outdated data, and, at times, incorrect calculations, for planning purposes and has not started to address all current and emerging issues that could significantly increase electricity demand and lower projected generation”. Regarding costs the audit notes that “The costs of transitioning to renewable energy are not known, nor have they been reasonably estimated” and goes on to point out that the sources of funding have not been identified.

Crippling Costs of Electrification and Net-Zero Energy Policies in the Pacific Northwest

Jonathan Lesser and Mitchell Rolling have released a new research report from Discovery Institute’s Reasonable Energy program that will “produce staggering costs to individuals and businesses without providing any meaningful environmental benefits”. The Discovery Institute announcement of the report summarizes the report as follows.

Authors Jonathan Lesser and Mitchell Rolling conclude that policies in Oregon and Washington State that require their state electrical utilities to eliminate fossil-fuel energy sources to produce 100% of electricity from zero-emissions sources by 2040 (Oregon) and 2045 (Washington) will double existing electricity demand.

Both states have adopted California’s Advanced Clean Car rules, which require 100% of all new cars and light trucks sold to be electric by 2035.

Both states intend to reach zero energy-related greenhouse gas emissions by 2050, including replacing all fossil-fuel space- and water-heating systems with electric heat pumps.

Both states envision replacing existing fossil fuel generation and meeting the projected increase in electricity demand with thousands of megawatts (MW) of wind turbines and solar photovoltaics.

The Climate Act mandates are similar to those in Oregon and Washington.

The inherent intermittency of wind and solar power, together with peak electric demands taking place in the early evening hours when there is no solar generation available (and often no wind), means the two states will require large amounts of storage capacity, in addition to the existing hydroelectric storage dams that have been built on the Columbia River and its tributaries.

New York electric system projections highlight the same problem with intermittency as described here.

Because no new hydroelectric dams will be built, the additional storage capacity required will need to come from large-scale battery storage facilities and perhaps a few new pumped hydroelectric storage facilities, whose siting remains controversial.

New York also has no ability to build more hydro so will have to rely on battery energy storage.

Their research considered the costs by 2050 associated with three scenarios: 1) the renewables-only strategy; 2) a lower-cost renewable strategy (a more optimistic low-cost renewables scenario in which wind, solar, and storage capital costs decrease by 50% in real (inflation-adjusted) terms by 2050); and 3) an alternative scenario in which the electricity goal is achieved with new nuclear plants and additional natural gas generators. The assessed total costs (in inflation-adjusted dollars) are as follows:

Renewables Only: $549.9 Billion

Lower-cost Renewables: $418.5 Billion

Natural Gas and Nuclear: $85.9 Billion

The Climate Act precludes the pragmatic option to consider natural gas and nuclear so our costs will be closer to the high end.

Their research indicates that the effects on electricity bills will be devastating.

A typical residential customer’s bill will increase by 450%, from about $110 per month today to over $700 per month in 2050 (assuming a modest inflation rate of just 2.0% annually).

Commercial customers will see their monthly bills increase from an average of about $600 per month today to approximately $3,800 per month in 2050.

The Hochul Administration has not provided any ratepayer impacts, but I expect the costs will be similar in New York.

The negative economic impacts will not be limited to soaring electricity bills.

Prices for virtually all goods and services will dramatically increase.

Jobs will be lost as businesses relocate to other states with lower-cost energy.

Energy poverty rates will soar.

Negative economic impacts are a feature not a bug of net-zero transition efforts.

The enormous costs to consumers and businesses will be accompanied by negligible environmental benefits.

The reduction in greenhouse gases (GHGs) from the policies would total about 1.8 billion metric tons between 2024 and 2050, which is a small fraction of estimated 35 billion metric tons world carbon emissions in just one year.

If both states eliminated all energy-related GHG emissions by 2040, the resulting decrease in world temperatures would be only 0.003 ⁰C. By comparison, the best outside thermometers have an accuracy of about +/- 0.5 ⁰C, about 170 times larger.

I estimate that New York reduction in GHG emissions is about the same (1.5 billion metric ton reduction) as the reduction projected from Oregon and Washington so the estimates of environmental benefits are similar.

The report concludes that the two states would be best served by abandoning these goals, focusing instead on providing reliable and far less costly electricity from new natural gas and nuclear plants.

I believe this conclusion would be appropriate for New York.

Catastrophic Costs of Green Energy

Alex Epstein described his testimony in front of the House Budget Committee on the topic “The Cost of the Biden-Harris Energy Crisis.” You can watch his testimony and the Q&A at the link.

The transcript of his testimony states:

The basic idea of government-dictated green energy is that the government should force us to rapidly reduce our use of fossil fuel energy and replace it with so-called “green energy,” mostly solar and wind, such that we reach net zero greenhouse gas emissions by 2050 at the latest.

There are three basic truths you need to know about the costs of government-dictated green energy. And I think these are really under-appreciated even by critics.

One is they have been enormous so far.

Two is they would have been catastrophic had it not been for the resistance of their opponents. This is very important when you hear the Biden administration has record production. That’s in spite of them, not because of them.

And three, they will be apocalyptic if not stopped in the future.

He goes on to summarize the reason for the cost increases:

So let’s talk about the cost so far of government-dictated green energy. All the energy related problems we have experienced in recent years, which have been a lot: high gasoline prices, higher heating bills, higher electricity bills, and unreliable electricity, which is a huge problem we need to talk much more about, are the result of government-dictated green energy.

And its very simple. When you shackle the most cost effective and scalable source of energy, fossil fuels, and you subsidize unreliable solar and wind, that wouldn’t otherwise be competitive, energy necessarily becomes more expensive, less reliable and less secure. So again, it’s very simple.

This is exactly what will happen in New York because of the Climate Act net-zero transition. He goes on to explain why inflation and increased energy costs are inextricably linked:

Prices are determined by supply and demand. If oil and gas companies could control energy prices in their favor, why didn’t they do this from 2015 to 2020 when they were losing money? The truth is that government-dictated green energy policies are fundamentally responsible for all the energy related costs we experience today compared to a decade ago.

And in fact, it’s worse than that. There’s an opportunity cost. Because were it not for these policies, energy would have gotten considerably cheaper and more reliable, especially with lower natural gas prices, which should have lowered electricity prices. Instead, they’ve gone up because we’ve added a bunch of wasteful energy and unreliable stuff. And it gets worse, since energy is the industry that powers every other industry. By making energy more expensive and less reliable, we make everything more expensive and less reliable, which means government-dictated green energy drives price inflation. Very important point.

His testimony notes that at least on the Federal level that the attempts to rapidly eliminate fossil fuel use have failed. Consequently, the nation has been spared energy ruin and a third-world grid. Of course, reality has not stopped the Climate Act. His testimony is a grim warning of our future if this madness continues.

Conclusion

In the absence of a clear accounting of costs for the Climate Act we can only guess what will happen here. I believe that the crippling and catastrophic adjectives used by these authors will surely describe our energy costs.

Hurricane Helene Hype Nonsense

The basis of the emotion driven narrative that there is an existential threat of climate change is fueled by endless articles and opinion pieces in the mass media that conflate every extreme weather event with climate change. Remember climate is what you expect, and weather is what you get. This article describes how the hucksters incorrectly make the extreme weather devastation caused when a rare weather pattern caused the storm to stall into an example of climate change impacts when a hurricane in hurricane alley during the hurricane season occurred.

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 450 articles about New York’s net-zero transition. The difference between weather and climate has been a theme in many articles. The opinions expressed in this article 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

Good Energy Hype

I was prompted to write this post when I came across an opinion piece in the LA Times: Helene destroyed my hometown. I don’t want climate change stories of false hope by Anna Jane Joyner. She is the founder and chief executive of the “story support nonprofit” Good Energy. Last March I did an article about Irina Slaw’s article “Burn, Hollywood, burn” where she called out the blatant indoctrination and propaganda associated Good Energy – “Story support for the age of climate change”.

After noting that she had been checking on the weather and evacuation plans while preparing to board a plane on her way to NYC Climate Week Joyner writes:

The hurricane didn’t come for my partner and me this time, but it destroyed my hometown in the mountains of North Carolina. I’ve spent 20 years working on climate and I live between Los Angeles and the Gulf Coast of Alabama, where I’ve reckoned with the likelihood of one day losing our home. I’ve also accepted that worsening fires, droughts and heat waves could make Southern California unlivable. But Asheville was considered a climate haven. I’ve always told family members we can never sell our homes there. It is utterly unfathomable that it would be devastated first by one of the worst climate disasters in U.S. history. Helene showed us nowhere is safe.

Joyner went on to provide descriptions of the destruction caused by storm. This was followed by her attempt to link the storm to climate change and her climate change false hope argument:

Scientists estimate that climate change increased Hurricane Helene’s rainfall by up to 50% in parts of the Carolinas and Georgia, dumping more than 40 trillion gallons of water. At NYC Climate Week, the annual awareness event held alongside the U.N. General Assembly, the disconnect from this shattering reality was surreal. There were fancy parties, cheerful sun imagery and giant signs reading “HOPE.” The dominant theme was: We can solve this! We need to tell hopeful climate stories! But there’s no “solving” a hurricane wiping out western North Carolina, hundreds of miles from the sea. Only focusing on optimism is like telling a cancer patient that everything will be OK if they just stay positive. At best, it comes across as out of touch; at worst, it feels callous. Yes, we can still prevent the worst impacts and must demand our governments scale solutions and act urgently, but we cannot minimize the horrors unfolding now, or that it will get worse in the coming years.

It gets worse:

Fossil fuel executives have known since the 1970s that burning oil, coal and gas would cause escalating climate catastrophes and worldwide suffering. Yet they lied, sacrificed our safety for their greed and just unleashed an apocalypse on my hometown. Their actions will condemn children today to a planet that’s more hell than Earth by the end of the century if we don’t stop them. It isn’t just a tragedy; it’s a crime against humanity.

Not to worry Joyner will be available to solve this problem by providing stories:

What’s happening in North Carolina doesn’t feel real. I have no emotional framework for this, no story to help me. Right now, what I desperately need are authentic stories that help us figure out how to be human in this changing world, to face this overwhelming crisis with bravery. Stories that help us navigate our very understandable fear, anxiety, grief, despair, uncertainty and anger in a way that allows us to feel seen. Stories that make us laugh — not in ignoring our reality, but in the midst of it — and stories that remind us there’s still so much beauty here to fight for. That capture how, in the living nightmare of climate disasters, people demonstrate extraordinary kindness and creativity, as they’re doing in Asheville and Black Mountain at this very moment. And we need stories that expose the guilt of the fossil fuel industry.

Reality

A quick review of recent articles at Watts Up With That demonstrates that the devastation of the remnants of Helene in the Asheville region was an extreme weather event and not evidence of climate change.

Paul Homewood did a nice summary of the data for Hurricane Helene. His description of the Asheville rain notes:

In Asheville, North Carolina, a total of 13.98 inches (35.52 centimeters) of rain fell from September 25 to 27, according to National Weather Service records. The storm swamped neighborhoods, damaged roads, caused landslides, knocked out electricity and cell service, and forced many residents to evacuate to temporary shelters. Record flood crests were observed on multiple rivers in the state. Flooding was widespread across the southern Appalachians; preliminary rainfall totals neared or exceeded 10 inches (25 centimeters) in parts of Georgia, North Carolina, South Carolina, Tennessee, and Virginia.

Note that the 14 inches of rain occurred over three days. Joyner referenced a statement that climate change increased Hurricane Helene’s rainfall by up to 50% in parts of the Carolinas and Georgia. I found that the reference stated that “In one provisional rapid attribution statement, a trio of scientists at the Lawrence Berkeley National Laboratory said the rainfall over the 24 hours Helene moved through was made up to 20 times more likely in these areas because of global warming.” Comparing the 24 hours in this reference to the three-day storm total makes it clear that storm motion was not considered in rapid attribution statement.

Charles Rotter’s article on the observations of Steve McIntyre and Andy Revkin about the real lessons to be learned from the storm completes the destruction of the arguments in Joyner’s op-ed. McIntyre explains that flood control dams were planned for some of the rivers that had devastating floods but were not built. Clearly there are negative consequences of building dams and positive benefits associated with keeping the rivers open. But if you want to prevent flood damage when you keep the rivers free of dams then you should take prudent actions. Revkin points out that was not the case:

Finally, Revkin described a 1960 report “Floods on French Broad and Swannanoa Rivers around Asheville” explaining what was likely to happen:

Andy reported that the report stated that developments around Asheville “would cause these great floods of the past to be higher if they occurred again. Land fills and buildings in the flood plain and the many bridges across the streams have seriously reduced flood flow capacity.” “On the French Broad River, a flood of the same discharge as the 1916 flood would today be 3 to 4 feet higher between Pearson Bridge and West Asheville Viaduct than the actual flood elevation. On the Swannanoa River, a repetition of the 1916 flood would be up to 2. 5 feet higher today at Biltmore and up to 15 feet higher upstream from the Recreation Park dam.”

Anthony Watts described a couple of articles from Climate Realism that debunked the media claims about climate change effects on the storm. He shows that the claims of climate change worsening storms such as Helene just don’t hold up. Of particular note, is the reference to a massive flood in Asheville in 1916. Matthew Wielicki provides a good comparison of this storm and the 1916 storm. He found that the 1916 flood peaked at 23 feet. In this storm the peak was 24.7 feet.

Note that the 1960 report projected that if there was another 1916 storm that the flood would be between 3 to 4 higher because of development. Hurricane Helene flood waters peaked at less than two feet higher than the 1916 storm. It was development and not climate change.

Conclusion

Joyner concluded her article:

I need help making meaning of all this, and stories have always been how humans make sense of our world. But as I grieve an unimaginable loss, the last thing I want are optimistic stories about hope. As climate scientist Kate Marvel says: “We need courage, not hope, to face climate change.”

I find it difficult to sympathize with the grief of someone who provides Hollywood “story support for the age of climate change” because reality paints a different picture of the world. The data show that Helene was a rather typical hurricane in hurricane alley that occurred in the hurricane season. Devastating floods in Asheville have occurred before and evidence suggests that the greater observed flood peak was probably due to development. There is nothing to suggest that this is anything but an extreme weather event and it certainly is no evidence of any kind of worsening climate change impacts.

In my opinion, the worst part of this is that the usual suspects are using this tragedy to call for US reductions in fossil fuel to prevent this from happening again. Putting aside the lack of a causal link between GHG emissions and specific weather events, the relative magnitude of US and global emissions, and the rate of change of those emissions, the indisputable fact is that storms causing this kind of devastation have happened before and will happen again whatever is done to mitigate emissions. If nothing is done to adapt to this observed extreme weather, then the tragedy will inevitably occur again. Obviously we need to reassess where we are making our investments.

Vermont Clean Heat Standard Lessons for New York

The Climate Leadership & Community Protection Act (Climate Act) could learn quite a bit from the experiences of Vermont and their Clean Heat Standard as documented by Robert Roper at his Behind the Lines Substack. Roper did an overview of the Clean Heat Standard and a summary of the Public Utility Commission’s (PUC) long awaited Draft Clean Heat Standard Rule Companion Status Report that provide evidence that New York’s similar initiatives will run into the same problems he identifies.

I have followed the Climate Act since it was first proposed, submitted comments on the Climate Act implementation plan, and have written over 450 articles about New York’s net-zero transition. The opinions expressed in this article 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

There are two relevant initiatives. The CAC recommended an economywide cap-and-invest program. Plan that led to the New York Cap-and-Invest (NYCI) program that will “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.” In the Legislature the New York Home Energy Affordable Transition Act, or NY HEAT that passed the last session but has not been signed is supposed to secure “affordable, clean energy for New York households.”

Vermont Clean Heat Standard

Roper’s overview of the Clean Heat Standard put together a “pocket guide” that describes what this law is supposed to do, how it’s supposed to work, and what it looks like it will cost to fully implement. I recommend that you read the article for full details because Rober is a good writer that explains things well in an engaging manner. I will quote from his article and compare to New York’s situation below.

Roper explains the origin of the Clean Heat Standard:

The Clean Heat Standard is an outgrowth of the Global Warming Solutions Act (GWSA), passed over the veto of Governor Scott in 2020. The GWSA mandated that Vermonters lower our greenhouse gas emissions to 26% below 2005 levels by 2025, 40% below 1990 levels by 2030 and 80% below 1990 levels by 2050. How we were going to do this, what it would cost, or if it were even possible the lawmakers who passed the GWSA did not know, but if we failed to meet these deadlines, they inserted a provision in the GWSA that gave literally anyone standing to sue the state at taxpayer expense.

As noted in the Overview the GHG emission reduction targets for the New York Climate Act are similar. Like New York, the Vermont politicians assumed that the transition was only a matter of political will and that the details of how to get there would be a minor, easily resolved detail. The Climate Act does not include the provision for lawsuits if the deadlines were not met. Not to worry the Environmental Rights Amendment to the New York constitution will provide a similar basis for litigation.

Similar to New York’s Climate Action Council, the GWSA created a Vermont Climate Council that released their Climate Action Plan in December 2021.

This plan, released in December 2021, recommended that for the thermal sector of our economy (how we heat our homes and businesses, make hot water, and cook our food), which accounts for over 40 percent of our overall greenhouse gas emissions, that the legislature pass another law establishing a Clean Heat Standard. The legislature did this in 2023 over Governor Scott’s veto with Act 18 — again not knowing what it would cost, how it would work, or if it were possible.

Roper describes the Clean Heat Standard:

In a nutshell, the Clean Heat Standard is a system requiring importers/sellers of heating oil, kerosene, propane, natural gas, and coal, to obtain (in most cases, especially for smaller dealers, this means buy) “credits” based on the amount of carbon released into the atmosphere when the fuels they sell are ultimately burned. According to the law, a carbon credit is defined as “a tradeable, nontangible commodity that represents the amount of greenhouse gas reduction attributable to a clean heat measure.” A “clean heat measure” is one of a dozen legally approved actions taken — by anyone — to reduce greenhouse gas emissions such as weatherizing a building or installing a heat pump.

Practically speaking, a carbon “credit” it is a financial instrument, much like a cryptocurrency, that a fuel importer/seller must obtain in order to legally sell their product(s) either by “mining” the credits themselves (performing clean heat measures) or buying them from a “Default Delivery Agent” (likely Efficiency Vermont) appointed by the state.

There are similarities to NYCI but significant differences too. Both programs require compliance entities to obtain authorizations to emit amounts of carbon. Affected Vermonters must earn those authorizations either themselves or buying them for someone else who performed the clean heat measures. Affected New Yorkers buy the authorizations from the auction marketplace which is supposed to use the proceeds to fund clean heat measures. New York’s proposed NY HEAT includes mandates to force electrification of home heating away from fossil fuels. Both state approaches are intended to reduce emissions on a mandated trajectory consistent with their GHG targets.

In both States the nasty little detail of how many homes must be modified to achieve those goals is only now being addressed. In Vermont “According to a taxpayer funded analysis done by The Cadmus Group for the Climate Council, in order to meet just the 2030 targets Vermonters will have to weatherize 120,000 homes, install 177,107 heat pumps, 136,558 heat pump water heaters, 14,992 advanced wood heating systems, and switch 21,086 homes to using biofuels before the end of the decade.” New York’s documentation for these numbers is buried in documents but in much less detail. In both cases the costs and where the money necessary to pay for them is unresolved.

There is a huge implementation issue for both states. In Vermont:

How is the state even supposed to ensure and verify that all of these clean heat measures take place, calculate exactly how much greenhouse gas reduction will result from each unique measure so that each measure can be monetized into a tradable carbon credit value, assign ownership of the credits, and then establish a financial exchange where the creators of credits and the parties obligated to obtain them can buy and sell them while at the same time regulators track ownership and ensure compliance? When the legislature passed Act 18, they had no idea so handed off the task of figuring all that out to the Public Utilities Commission (PUC).

In New York, the unique Climate Act emissions accounting requirements means that the State must develop reporting and tracking mechanisms for emissions, develop an allowance system for ownership, and establish a financial exchange like Vermont. In New York the assignment for this task was given to the Department of Environmental Conservation and the New York State Energy Research & Development Authority on a time frame years less than it took California to establish a similar program.

In my opinion based on years of experience with emissions accounting and reporting New York’s challenge is impossible on the mandated schedule but the Vermont approach is much worse. Roper writes and I agree:

If that task sounds impossibly complicated, it is. In fact, Efficiency Vermont released a memo to the PUC on September 19, stating, “The complexity of these arrangements also give rise to concerns over the veracity of projects claiming credits and the rigor of their completion… Efficiency Vermont is unsure of the efficiency or efficacy of monetizing credits…. [and] that while compliance may ultimately be achieved after several years, the buying and selling of credits itself becomes grossly inefficient, asymmetrical, and potentially more costly for all parties.” Not an expression of confidence that this is going to work at all, let alone be cheap.

Costs

Roper writes:

Supporters of the Clean Heat Standard say we don’t know what it will cost, shouldn’t speculate, and that all indications so far are that the cost to implement the program will be minimal for consumers. This first position is misleading, and the second is demonstrably false.

As for not knowing what the Clean Heat Standard will cost, that’s only true if you’re looking for an exact price tag, which, of course, can’t be determined until the program’s rules are fully designed and approved. However, it is not difficult to get a ballpark figure with all of the data that has been collected and testimony taken over the three-plus years that this policy has been under consideration.

The excuse for not providing costs in New York’s Scoping Plan was we cannot give an exact price because of all the uncertainties. The failure to provide a ballpark figure in New York is indicative of the likelihood that the costs are politically unacceptable. There is no reason to believe that the New York cost experience will be markedly different than Vermont.

Roper documents how much money has been spent on implementation and concludes that “Given this level of financial and human resources engaged over this extended period of time the claim that we still don’t have enough information to know basically what the Clean Heat Standard will cost – not even a ballpark understanding – defies credulity.” Inevitably the costs must come out, but in the meantime, here is a ballpark estimate:

According the newly released potential study done by NV5 through the Department of Public Service, the estimated incentive spending required to fund the number of clean heat measures necessary to meet the GWSA reduction mandates will cost about $3.3 billion over the first four years leading up to the 2030 target (and about $10 billion total to meet the 2050 target). To raise that much money off the sale of 200 million gallons of fossil heating fuel sold annually comes out to a just over $4 per gallon.

Roper goes on to flesh out more details of the implications of the Vermont initiative. He describes who pays and who benefits. Most importantly, who loses: “The biggest losers in this scheme are those who can’t transition away from heating with fossil fuels even if they want to because, for example, they can’t afford the upfront costs of doing so, can’t find the labor to do the work in a timely fashion, or their homes are logistically difficult or impossible to retrofit such as those living in mobile homes, older housing stock lacking open floor plans, or multi-unit apartment buildings.” He closes this post to explain how this is supposed to be implemented.

PUC Clean Heat Status Report

Roper’s second post is a summary of the Public Utility Commission’s (PUC) long awaited Draft Clean Heat Standard Rule Companion Status Report. I particularly like his description of the conclusion that the Clean Heat Standard is a dead end and recommend reading it.

As he has been writing for years the PUC concludes:

The Clean Heat Standard as currently conceived requires substantial additional costs and regulatory complexity above the funding needed to accomplish Vermont’s greenhouse gas emission reduction goals. For example, the Clean Heat Standard would require establishing a credit marketplace managed by what is likely to be a costly credit platform, the potential for fraud and market manipulation, the appointment of new or varied default delivery agents with administrative costs of their own, and the participation and regulatory engagement of hundreds of fuel dealers and other actors — e.g., companies and individuals that install clean heat measures — not currently or historically regulated by the Commission.

Our work over the past year and a half on the Clean Heat Standard demonstrates that it does not make sense for Vermont, as a lone small state, to develop a clean heat credit market and the associated clean heat credit trading system to register, sell, transfer, and trade credits. Because the Clean Heat Standard introduces these additional regulatory hurdles and costs, the Commission is considering other options to achieve Vermont’s greenhouse gas emission reduction goals for the thermal sector.

Given that the Clean Heat Standard won’t work what alternative was proposed?

[A] new thermal energy benefit charge on the sale of fuel oil, propane, and kerosene. Similar to the long-standing electric efficiency charge, the Commission would set the thermal energy benefit charge based on statutory criteria, including the need to provide sufficient funding to meet the Global Warming Solutions Act requirements.

Roper describes this as:

A straightforward carbon tax on home heating fuels. Strip away the Rube Goldberg Carbon Credit contraption, and that’s what you’re left with: a direct charge on your oil, propane, and kerosene home heating bill. And to “sufficiently fund” the number of clean heat measures necessary to meet the Global Warming Solutions Act mandates, that carbon tax will necessarily be massive. In the billions massive. Of course, per the report, “The Commission is not providing a cost estimate at this time.” Uh huh. I guess give them another eighteen months.

The NYCI approach is similar, it is nothing other than a disguised carbon tax. In fact, given the uncertainties associated with devising a “declining cap” that appropriately accounts for all the uncertainties associated with renewable resource deployment, the necessity for new technologies to account for weather-dependent resource limitations, and the regulatory infrastructure necessary to implement the cap-and-invest auction and tracking system I believe a New York carbon tax is a better option. However, in both Vermont and New York the political optics of another tax and one that will have to be this large, makes admitting this is simply a tax untenable.

I love Roper’s closing comment on the fact that this has always just been a tax:

Now if lawmakers take the PUC’s recommendation to implement this direct tax/fee/surcharge, that plausible deniability (implausible really, but hey, they’ve been sticking to it, bless their hearts!) is gone. Do they have the guts — or a truly principled commitment to saving the planet — to face the voters with that proposition? It’s time to separate the true believers in catastrophic, anthropogenic climate change from the virtue signaling panderers!

Conclusion

It is not surprising how many similarities there are between the Vermont approach and that of New York even though the programs are packaged differently. At the end of the day both states will face enormous costs, and their funding approaches are no more than disguised carbon taxes. The only question left is which state will reach the inevitable reality wall when the citizens finally understand that politicians should not make energy policy. The current approach in both states assures that affordability and reliability will suffer. Roper’s work describes why this is happening in Vermont and New York will fare no differently unless changes are made soon.

Personal Comments on the Allocation of New York Cap-and-Invest Proceeds

The Scoping Plan outline of implementation options for the Climate Leadership & Community Protection Act (Climate Act) suggested a market-based program as an economy-wide strategy. This effort is known as the New York Cap-and-Invest (NYCI) program. Last month I published an article describing the New York State Department of Environmental Conservation (DEC) and the New York Energy Research & Development Authority (NYSERDA) “proposed framework for guiding the allocation of these funds and identification of potential areas that could receive investments.” DEC and NYSERDA also posed a series of questions seeking public feedback. This article describes the comments I submitted in response.

I have followed the Climate Act since it was first proposed, submitted comments on the Climate Act implementation plan, and have written over 450 articles about New York’s net-zero transition. I worked on every market-based program from the start that affected electric generating facilities in New York including the Acid Rain Program, Regional Greenhouse Gas Initiative (RGGI), and several Nitrogen Oxide programs. I follow and write about the RGGI and New York carbon pricing initiatives so my background is particularly suited for tNYCI. The opinions expressed in this article 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

Cap-and-Invest

The CAC’s Scoping Plan recommended a market-based economywide cap-and-invest program. The program works by setting an annual cap on the amount of greenhouse gas pollution that is permitted to be emitted in New York: “The declining cap ensures annual emissions are reduced, setting the state on a trajectory to meet our greenhouse gas emission reduction requirements of 40% by 2030, and at least 85% from 1990 levels by 2050, as mandated by the Climate Act.” In addition to the declining cap, it is supposed to 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. That is the theory, but I have doubts whether it will work and others do too.

Late last year DEC and NYSERDA released the pre-proposal outline of issues that included a long list of topics. The Agencies said that they were “seeking and appreciate any feedback provided on these pre-proposal program leanings to inform final decisions in the State’s stakeholder-driven process to develop these programs.” In a post describing my comments I provided additional background information and my concerns. In late June I described my letter to the editor of the Syracuse Post Standard that argued that the delays were primarily due to staffing issues. There has not been any substantive response to any comments submitted to date.

Comments

The request for comments asked for thoughts about how the auction proceeds should be invested. I think that they are putting the cart before the horse because no vetted path to zero emissions has been identified. In my comments I described the following tradeoff challenges that must be resolved if NYCI is to succeed.

Fundamentally, there are political thresholds that limit how much money can be raised by NYCI before the electorate rebels, but investments must be sufficient to fund emission reduction projects to achieve the aspirational Climate Act schedule. This has not been acknowledged in the NYCI implementation process. Danny Cullenward and David Victor’s book Making Climate Policy Work describe this problem. They note that the level of expenditures needed to implement the net-zero transition vastly exceeds the “funds that can be readily appropriated from market mechanisms”. That observation and the conclusion that New York is going to have to fund alternative technologies means that emission reduction investments should be a priority for NYCI revenues. However, there are competing priorities for funds including investments to advance equity and climate justice, funding for programs to reduce costs for those least able to afford higher energy prices, and funding to develop the new technology necessary for the zero-emissions electric grid.

These tradeoffs can only be resolved if there is a plan in place that is based on feasibility studies. Unfortunately, there is nothing in place that will provide that information in a timely manner. The sources that are responsible for compliance with NYCI have very few options for on-site control so must rely on somebody else to make the investments for zero-carbon emitting resources to displace their operations for emission reductions. The costs for those investments and market mechanisms for the required investments are unknown. In addition, it is acknowledged that to reach zero-emissions new technology must be developed and deployed. All these issues should be addressed before NYCI implementation continues.

Proponents of the cap-and-invest approach admire the NYCI feature that “ensures annual emissions are reduced”. However, the technological challenges of the transition must be resolved and adequate investments for the transition must be provided to achieve emission reductions. Furthermore, the NYCI allowance cap trajectory means that resolution of those issues is further constrained. If the displacement technologies are not deployed in a timely fashion, then the only compliance option left for the affected sources is to reduce or stop operations or cease sales of fossil fuels. That could result in an artificial energy shortage.

Conclusion

The Climate Act and the implementation programs thus far proposed are risky. I identified problems and tradeoffs that must be resolved before NYCI implementation continues. While there are some hints that the ramifications of an unreasonable and unachievable energy transition are becoming so evident that they cannot be ignored, those issues should be resolved before NYCI implementation continues. The NYCI program has a long way to go before New Yorkers can be assured that implementation will not do more harm than good.

Ultimately, any market-based program intended to reduce GHG emissions is a tax on CO2 emissions. Ron Clutz found a relevant political cartoon for a similar program in Canada that applies to NYCI.

Future Energy Summit Wrap Up

On September 4-5, 2024, the Hochul Administration hosted a Future Energy Summit. I described my initial thoughts on the Summit, followed up with a second pre-meeting post, and did a first impressions post-meeting article. I also described the pushback by anti-nuclear activists against the Summit focus on the potential for nuclear power. This post wraps up my thoughts on this meeting.

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 450 articles about New York’s net-zero transition. The opinions expressed in this article 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

State Summit Summary

On September 11, 2024, NYSERDA Events sent an email to attendees of the Summit. I think it gives a good summary of the Hochul Administration’s expectations. I quote the letter below with my annotated comments.

The first two paragraphs provide overview information:

Thank you for attending the Future Energy Economy Summit. We hope you found the convening to be informative in exploring how advanced emissions-free technologies can play a key role in supporting renewable energy and economic development while accelerating progress toward a zero-emission electricity system.

A recording of the Summit has been posted to the Summit website. While the Summit discussions were robust and the opportunities are exciting, there is considerable work ahead.

In my opinion, the suggestion that there was a discussion is misleading. No speakers who have openly questioned the narrative were invited to participate, no utility or the NYISO participated, and the only way to submit questions was via a networked chat feature that ensured that no controversial questions were raised.

The important part of the email listed the following key next steps:

Complete the ongoing Public Service Commission review of the Clean Energy Standard (CES) by early 2025 and advance key actions to accelerate and expand New York’s large-scale renewable energy industry, focusing on deployment goals, interconnection reforms and the timely implementation of the RAPID Act for expedited environmental reviews and permitting of major renewable energy and electric transmission facilities.

This description of the PSC review of the Clean Energy Standard could be problematic. The CES is just one component of the programs needed to achieve the Climate Act mandates. The Hochul Administration Scoping Plan excluded costs of the CES in its cost-benefit analysis. As a result, they have never admitted what the total costs of Climate Act implementation could be. This statement could be a similar gambit to hide costs and other problems. I think I speak for just about everyone outside the Administration when I say we want to know the total costs to meet the Climate Act mandates and not a subset of costs from different regulations and laws. If the PSC review only addresses the CES costs, then the citizens of New York will be shortchanged again.

Advancing key actions to “accelerate and expand New York’s large-scale renewable energy industry” ignores the fact that there hasn’t been a feasibility study to show it is possible. The Climate Act is a political construct based on the premise that implementation is only a matter of political will. Avowed Climate Act author Robert Howarth continues to misinform the public by saying that “We can meet all of the energy needs of New York with solar, with hydro and wind and appropriate (energy) storage.’’ The Scoping Plan flatly contradicts that statement, the New York Independent System Operator is calling for a not yet commercially available dispatchable emissions-free resource (DEFR) in its future resource projections, and the Public Service Commission ‘Zero Emissions by 2040’ proceeding acknowledges this need.

Maximize leverage of federal programs by applying for relevant funding opportunities for economic development and next generation emissions-free energy technology planning and deployment.

Given the availability of federal funding for advanced nuclear projects the Summit discussed the possibility those funds could be used In New York.

Advance Public Service Commission action on the pending ‘Zero Emissions by 2040’ proceeding that is investigating technologies that support the 2040 zero-emissions electricity system target established through New York’s Climate Act.

As noted previously, this proceeding directly contradicts the suggestion that solar, hydro, and wind with energy storage are sufficient for the future electrical energy system. The Summit is another acknowledgement that DEFR is needed. Advanced nuclear designs are a leading contender for future DEFR which explains why it was featured at the Summit and why there is activist pushback on the need for DEFR itself.

Solicit industry feedback on the draft Advanced Nuclear Technologies Blueprint, and finalize the draft Blueprint by the end of this year. To review the draft Blueprint click here, and to submit comments, please click here;

I have a couple of thoughts about this Blueprint. They are asking for “industry” feedback which suggests that they want technical commentary on their ideas. I have always thought that the Summit was mostly a referendum on the deployment of nuclear. I predict that there will be massive letter writing campaigns organized in response to the blueprint comment period to try to influence this decision despite the request for industry feedback. Already the anti-nuclear letters to the editor have started showing up. My other observation is that the comments are due in November so any decisions made will be after the current election cycle.

Ensure that the forthcoming State Energy Plan appropriately considers the role advanced emissions-free technologies can play in the State’s move to a deeply renewable electric grid and capitalization of programs that will expand the State’s economy.

The State Energy Plan is very important for the future economy of New York. If done properly it will include a feasibility study. If a feasibility study correctly addresses costs, technological considerations, and the risks of relying on weather-dependent resources, then it will show that a major reassessment of the Climate Act mandates, and schedule are necessary.

We look forward to continuing this discussion and appreciate your participation at the Future Energy Economy Summit.

My Impressions

Before the summit I thought that the overarching rationale was to address concerns that have been raised about the lagging schedule and lack of cost information. Two of the five panels addressed nuclear power, so it appeared that the Hochul Administration was attempting to gauge public opinion on that option. The organizers went to great lengths to control who attended and did not announce who was on the panels until just before the meeting. I also thought that a primary reason to hold the meeting in Syracuse was because of the presence of three nearby nuclear generating plants that would provide a visible demonstration in favor of nuclear power.

I did a quick summary after the summit. Governor Hochul showed up to kick off the summit and the point was frequently made that it was her idea. There was no substantive response to the schedule and cost issues. Nuclear was an emphasis point and I remain convinced that the Hochul Administration is attempting to gauge public opinion on that option. A draft Advanced Nuclear Technologies Blueprint was announced that they plan to finalize by the end of this year. I have never seen so much security around an energy meeting but there were no incidents even though there was a demonstration in favor of nuclear power and another against nuclear power outside the hotel. Surprisingly there was not any kind of demonstration from the local nuclear unions. I believe the reason for having the meeting in Syracuse was to emphasize the importance of reliable electric power for the Micron chip fabrication plant and other industries.

Conclusion

Only time will tell whether the Summit was an honest attempt to address the unmistakable implementation issues being observed or it was timed and motivated for political gain. At some point reality must be addressed. Energy policy dictated by politicians and ideologues is not in the best interests of society. The Climate Act is a vivid example of a well intentioned course of action that will do more harm than good. It is time for an honest and open assessment of the plans and schedule proposed.

NYISO Resource Outlook Dispatchable Emissions-Free Resource

A recent article of mine summarized analyses describing a new category of generating resources called Dispatchable Emissions-Free Resources (DEFR) necessary for a future grid that depends upon wind, solar, and energy storage resources. Most analysts of the future New York electric system agree that new technologies are necessary to keep the lights on during periods of extended low wind and solar resource availability. This article describes Appendix F – Dispatchable Emission-Free Resources in the New York Independent System Operator 2023-2042 System & Resource Outlook (“Outlook”).

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. Two targets address the electric sector: 70% of the electricity must come from renewable energy by 2030 and a requirement that all electricity generated be “zero-emissions” resources by 2040. The Climate Action Council (CAC) was responsible for preparing the Scoping Plan that outlined how to “achieve the State’s bold clean energy and climate agenda.” 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. Since then, the State has been trying to implement the Scoping Plan recommendations through regulations, proceedings, and legislation.

Dispatchable Emissions-Free Resources

In my Compendium of DEFR Analyses I summarized published posts describing DEFR that is highlighted as a concern in the NYISO Outlook. I described six analyses describing the need for DEFR: the Integration Analysis, New York Department of Public Service (DPS) Proceeding 15-E-0302 Technical Conference, NYISO Resource Outlook, Richard Ellenbogen, Cornell Biology and Environmental Engineering, and Nuclear New York.

The Overview in Appendix F – Dispatchable Emission-Free Resources describes the reason DEFR is needed:

Numerous studies have shown that a system comprised of intermittent renewable energy resources and short-duration storage (i.e. 4 and 8-hour capacity duration) that cycle daily can economically meet demand in most hours across a year.

Importantly NYISO is responsible for meeting demand at all times. Most of the time it is easy but there are times when it is not:

However, due to the seasonal mismatch in electricity demand and weather dependent production from wind and solar resources, there remains a significant amount of energy that must be shifted from the low net load intervals of the spring and fall seasons to the peak load times during the summer and winter months, as discussed in Appendix E: Renewable Profiles and Variability.

I described Appendix E previously. The data presented in Appendix E show that there are frequent periods when all the wind and solar resources are expected to provide much lower output than their rated capacity. It appears that planners must, at a minimum, account for a 36-hour period when all the land-based wind, offshore wind, and solar combined provide less than 10% of their rated capacity. The Overview goes on:

Advances in technological, economic, and modeling approaches are needed to better quantify and characterize the seasonal energy gap that remains to be served after the coordinated economic dispatch of renewables and storage resources. The NYISO seeks to improve the representation of this fleet segment in each of its successive study, while understanding that characterization of emerging technology implementation pathways can introduce its own uncertainty into the model. The NYISO continues to recognize that there is a need for supply beyond renewables and storage resources that can provide dependability supply during the summer and winter peak periods and when the output of renewable resources is low.

In the remainder of this article I will summarize the different sections of Appendix F – Dispatchable Emission-Free Resources.

Technologies

Appendix F in the Outlook evaluates three DEFR options that they believe represent the most likely viable approach but concede that there still are concerns even with these:

While DEFRs represent a broad range of potential options for future supply resources, two technology pathways being discussed as potential options for commercialization are: 1) utilization of low- or zero-carbon intensity hydrogen (typically generated by electrolysis derived from renewable generation) in new or retrofit combustion turbine or fuel cell applications or 2) advanced small modular nuclear reactors, which are currently seeking approval from the relevant regulatory bodies to design and operate these resources. Currently, both technologies have shown limited commercial viability on the proof of concept. Even assuming that they are commercially viable, there remains significant work in the implementation and logistics that must be overcome to economically justify transitioning the dispatchable fleet to some combination of new technologies in the next 15 years. Long-duration energy storage could potentially serve in the role of the modeled DEFRs in the Outlook. In many respects, long-duration energy storage closely mimics various hydrogen production and conversion pathways. Long-duration energy storage adds to load in many hours, similar to electrolysis production of hydrogen. However, a notable difference is that electrolysis production of hydrogen has a lower round-trip efficiency when injecting energy into the system compared to other long duration energy storage technologies under development.

I have a concern about these pathways. Hydrogen and advanced nuclear both “have shown limited commercial viability on the proof of concept”. Commercial viability is particularly important in New York’s deregulated environment because the State must entice some developers to risk an enormous amount of money to provide the necessary resources. Consider that “there remains significant work in the implementation and logistics that must be overcome to economically justify transitioning the dispatchable fleet to some combination of new technologies in the next 15 years”. As a result, I think the State is going to find it very difficult to convince anyone to take on the risk of either technology.

In its description of DEFR option Appendix F also notes “Understanding that many aspects of these technologies are currently unknown, and their capabilities and characteristics could change as more experience is gained, there is no standout leader among the options”. It goes on to conclude that “that a combination of resources and approaches will be needed to serve the role of the DEFR fleet”.

The Resource Outlook provides projections for future generating resources, so it needs to include some technology options. To fulfil this need and consider the uncertainties, the Outlook “modeled several generic DEFRs to represent the range of potential capital and operating costs. In particular, the Low Capital/High Operating cost (LcHo) and High Capital/Low Operating cost (HcLo) DEFRs modeled in this Outlook are informed primarily by hydrogen and nuclear technologies, respectively.”

Capital and Operating Costs

The models that NYISO uses to project future generating resource requirements necessarily incorporate costs. The capital and operating cost DEFR labels refer to high and low values but those are relative costs. This section of Appendix F provides some indications of costs but does not include expected costs to the consumers in the report. I think this information is very important, so I plan to return to this topic in a future post.

Because DEFR technologies are still in development the NYISO cannot use historical cost data. Instead, they used information from six different sources to estimate costs. The results are presented in the two following figures.

Figure F-1: Generator Capital Cost vs. Variable Operating & Maintenance, Fuel, and Emissions Costs

Figure F-2: Generator Capital Cost vs Fixed Operating & Maintenance Costs

I have also included a graph of Dispatchable Emission-Free Resources: 2040 Capacity and Generation from the NYISO Public Information Session presentation on 8/8/24

For what it is worth the following table provides values for the DEFR costs from these three figures. As noted, I will try to use these numbers to provide cost estimates in the future. Regrettably the NYISO report does not provide specific numbers.

DEFR Cost Considerations

This section in Appendix F presented some of the factors that must be addressed when considering costs. It explains that “since DEFRs are a developing technology, the first units built will likely be more expensive compared to similar DEFRs built thereafter”. The Outlook used capital costs representing a mature deployment and “first-of-a-kind costs are not explicitly included as assumed cost components in this study”. As the Outlook points out this means that “the costs for DEFRs in this Outlook are likely to be below the actual costs of the first DEFRs built on the system.”

The Outlook points out that nuclear small modular reactors (SMRs) are a “developing technology and therefore, have varying approaches to their design”. The theory is that “SMRs have the potential of reducing cost through the development and use of uniform designs”. Although this will lower capital costs capital costs will still be higher than other technologies. The expectation for DEFRs is that they will have low operating times and will ramp up and down. The Outlook notes:

Like large-scale nuclear power plants, SMRs can mitigate the risk of high capital costs with lower operating costs and operating with high utilization rates. In other words, it is optimal for an SMR to consistently operate at 100% power to take advantage of its low operating cost. This has the potential to conflict with the notion of DEFRs being used for their ability to dispatch up and down based on variability in the load. The disconnect between a DEFR’s purpose and an SMR can be bridged by pairing the reactor with a behind-the-meter, dispatchable load. The SMR can remain at 100% power, while the behind-the-meter load dispatches up or down to effectively fluctuate the injection onto the grid, as needed.

Unsaid is the obvious alternative that if SMT nuclear is viable then it could be used to replace renewables rather than just provide backup support. Nuclear energy generates zero-emissions electricity, provides firm power that does not require supplemental ancillary transmission support, has low land-use requirements, and requires less transmission development than wind and solar. Going all in for nuclear would not eliminate the need for a peaking power source but it may be possible to use hydro for that purpose. In a rational world keeping existing dual-fueled peaking plants available for this purpose would be an option too.

The Outlook also addresses hydrogen:

Hydrogen-burning combustion turbines or combined cycle units have effective cost mitigation strategies as well. To minimize hydrogen transport costs, the electrolyzer can be sited at the same facility as the resource. This eliminates the need for using an expensive hydrogen pipeline to import the hydrogen from elsewhere in state or even out of state. Additionally, as fossil fuel burning combustion turbines and combined cycle units retire, their assets can be repurposed and retrofit to burn hydrogen as a fuel instead. This has the potential to be less expensive than building a brand-new resource since many elements of the combustion turbine or combined cycle power plants can be reused with limited modification.

One of the more difficult electric system reliability problems is specifical considerations for New York City (NYC). Specifically, there is a reliability requirement for in-city generation. The 1977 NYC blackout was caused by transmission shutdowns and the inability of generating stations within the city to supply necessary load. The reliability load specifies how much in-city generation must be available to replace the loss of transmission power. I bring this up because this issue has not been discussed regarding DEFR. There will have to be DEFR resources in NYC and if hydrogen is the chosen technology, then hydrogen will have to be stored within the city. Hydrogen is a colorless, odorless, explosive gas that is hard to store. What could go wrong.

Operating Parameters

This section describes how some technical parameters are defined and used. The heat rate parameter is a measure of production efficiency, the lower the heat rate the less energy used to produce electricity. Lower heat rate units operate more often. The text lists the values used in the analysis.

There also is a discussion on the need for DEFRs to meet specific requirements such as the ability to be dispatched to follow load. Existing nuclear power technologies in the US have not been used to provide this service. The discussion describes how this service could be provided in future nuclear power designs. It also notes that there is a possibility that future reactors could be re-fueled while online which is much different than today’s reactors that require significant outages to re-fuel.

Conclusion

The NYISO Resource Outlook chapter on DEFR provides further proof that new technology is in fact necessary for the future zero-emissions New York electric system mandated by the Climate Act. The Hochul Administration has not provided cost estimates for the overall transition. I believe that DEFR costs will be a particular problem because this resource is used as rare backup. This report provides some cost information but not enough to estimate expected costs.

Personal Comments on Clean Energy Standard Biennial Review

The Climate Leadership & Community Protection Act (Climate Act) requires that the Public Service Commission (PSC) issue a review for notice and comment that considers “(a) progress in

meeting the overall targets for deployment of renewable energy systems and zero emission sources, including factors that will or are likely to frustrate progress toward the targets; (b) distribution of systems by size and load zone; and (c) annual funding commitments and expenditures.” In July Clean Energy Standard Biennial Review Report (Biennial Review) was released in response to this requirement and this post describes my comments to the PSC.

I have followed the Climate Act since it was first proposed, submitted comments on the Climate Act implementation plan, and have written over 450 articles about New York’s net-zero transition. The opinions expressed in this article 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 and Background

Biennial Review Summary

The Introduction to the Biennial Review is a good summary of the report.

The Climate Leadership and Community Protection Act of 2019 requires that the Public Service Commission (Commission) issue a review for notice and comment that considers “(a) progress in meeting the overall targets for deployment of renewable energy systems and zero emission sources, including factors that will or are likely to frustrate progress toward the targets; (b) distribution of systems by size and load zone; and (c) annual funding commitments and expenditures.” This Report serves to inform the Commission’s review. It summarizes the progress made toward the renewable energy and zero emission goals set by the CLCPA since the establishment of New York State’s Clean Energy Standard (CES), assesses what remains to be done to achieve those goals, presents policy options and proposals, and invites comments from stakeholders and the public on these or any other matters raised in this Report. The Report focuses in particular on New York’s goal to obtain 70% of New York’s electricity from renewable sources by 2030 (the 70% goal) and the related goal of 9 gigawatts (GW) of offshore wind by 2035.

My Comments

A comprehensive review of the Biennial Report would have been an enormous effort, so I confined my review to a limited number of issues. The Biennial Review concedes that the 2030 goal to achieve 70% of New York’s electricity from renewable sources is unlikely to be achieved. However, it does not acknowledge that the issues that are causing delays may not be resolved anytime soon. Public Service Law §66-p(4) provides an exemption that enables a delay of the Climate Act targets but no one has defined the safety valve criteria.

There are a couple of broad concerns. An overarching issue with Climate Act implementation is the lack of a comprehensive a feasibility study. The recent announcement of the long-delayed State Energy Plan offers hope that there will be feasibility analyses from that effort, but that will not be available until late next year. In the meantime, the Biennial Review should address whether building as much wind and solar as possible as fast as possible is appropriate. There is another enormous risk that should be addressed. I maintain that the differences between resource planning for the existing system and the proposed weather-dependent electric energy system introduce reliability risks that need to be addressed now.

There has never been a clear and transparent accounting of costs. It is long past time for the impacts on rates to be provided. I recommended that this report should address consumer costs

Finally, I commented on a couple of potentially disingenuous approaches used in the Biennial Review. The emphasis on the Clean Energy Standard underestimates the challenge of meeting all the Climate Act mandates. In the Scoping Plan the unique use of the Reference Case gave misleading cost impact results.

Implications of Progress Issues

The Biennial Review concedes that the 2030 goal to achieve 70% of New York’s electricity from renewable sources is unlikely to be achieved. However, it does not acknowledge that the issues that are causing delays may not be resolved anytime soon. Section 5 provides a speculative path to the 2030 70% goal. Table 8 summarizes the outlook. There is a projected gap of 42,145 GWh or 37% of the 70% goal.

The remainder of Section 5 proposes new development estimates and CES reform options that can accelerate progress. However, while there is an assessment of major factors that have affected and will likely continue to affect progress towards the goals, there is no acknowledgment that those factors are likely to continue to be issues. It concludes that there is a potential path so the 70% goal could be met by 2033 but does not address how building as much wind and solar as possible as fast as possible will ensure a reliable system. It is time to consider a reassessment of the schedule and goals to develop a realistic revised schedule.

The introduction to the Biennial Review mentions New York Public Service Law § 66-p (4) “Establishment of a renewable energy program” that includes safety valve conditions for affordability and reliability that are directly related to the zero emissions resource. § 66-p (4) states: “The commission may temporarily suspend or modify the obligations under such program provided that the commission, after conducting a hearing as provided in section twenty of this chapter, makes a finding that the program impedes the provision of safe and adequate electric service; the program is likely to impair existing obligations and agreements; and/or that there is a significant increase in arrears or service disconnections that the commission determines is related to the program”.

The criteria used to define “safe and adequate electric service” and “significant increase in arrears or service disconnections” should be defined in the Biennial Review. This is necessary so that there is a clearly defined standard for determining the need to conduct the hearing included in § 66-p (4) that would form the basis for a schedule revision.

Feasibility

The Biennial Review is supposed to assess what remains to be done to achieve transition goals and present policy options and proposals, However, the Review does not confront the biggest problem – feasibility. At this time, the State has not presented any credible plan demonstrating that in the early to mid-2030s there will be sufficient reliable electricity generation to meet the demands anticipated from both current uses, from the expected addition of new large sources of load like chip fabrication plants and data centers, and from the load added as part of electrification decarbonization strategies. Indeed, the State has admitted that, in lieu of a definitive plan, it relies instead on a speculative hope for new technologies not yet invented or deployed at scale to bridge the large difference in electricity supply that will inevitably arise from the conflicting mandates. The State can point to no Demonstration Project showing how its hope for a de-carbonized electrical grid can succeed. Clearly this should be addressed in the Biennial Review.

I am particularly concerned about the unacknowledged inherent risks of relying on weather dependent resources to provide a substantial portion of future electric power in New York. Wind and solar are inherently intermittent – the sun does not shine at night and the wind does not always blow. Renewable resource intermittency is correlated. All the solar in New York is unavailable at night. It turns out that wind resources across New York also are usually high or low at the same time. There are exceptions but there is a high incidence of similar behavior. All the solutions proposed to deal with solar and wind intermittency have failed to acknowledge that weather dependency makes the reliance on correlated resources very risky. The draft Biennial Review unacknowledged risk is that whatever criteria are used to determine how many resources are necessary to provide an affordable and practical system to meet the worst-case weather induced wind and solar resource lull there will be a high probability that eventually there will be a more extreme case that exceeds the criteria. When that happens, rolling blackouts are inevitable and there is risk of a larger and more severe blackout.

Consumer Costs

On July 16, 2024 the New York State Comptroller Office released an audit of the New York State Energy Research and Development Authority (NYSERDA) and Public Service Commission (PSC) implementation efforts for the Climate Act titled Climate Act Goals – Planning, Procurements, and Progress Tracking (“Comptroller Report”). The Comptroller Report included the following key recommendation:

Conduct a detailed analysis of cost estimates to transition to renewable energy sources and meet Climate Act goals. Periodically update and report the results of the analysis to the public.

The Biennial Review should directly respond to this recommendation. In an interview with Susan Arbetter NYSERDA’s Doreen Harris said the “The proceeding that is before the PSC is intended to ‘specifically they look at all this in the context of consumer cost”. If the Biennial Review is part of the Proceeding, then costs should be included. However, consumer costs are not included in the report.

Disingenuous Approaches

The Introduction to the Biennial Review includes the following description in the contents of each section: “Policy options and proposals under consideration in this Report are limited to the Clean Energy Standard (CES) itself.” The problem is that the CES includes a 9-gigawatt (GW) goal for offshore wind by 2035, a 6 GW by 2025 goal for distributed solar, and a 3 GW energy storage resources goal by 2030. Those only cover a portion of the resources needed to achieve Climate Act goals. I think I represent most New Yorkers when I state that the Biennial Review should include all aspects of the transition not a subset of programs. Choosing subsets of related programs is inappropriate because we want to know the total costs to achieve all mandates and all challenges that must be addressed to meet the targets.

There is a related CES issue. In Section 5.1 on page 53 of the Biennial Review the document states: “In all other respects, this Report’s base case reflects the Reference Case presented in NYSERDA’s Integration Analysis”. There is a cost related problem relative to the Scoping Plan “Reference Case” that I have described in a blog post and in my comments on the Draft Scoping Plan. I noted that the Integration Analysis modeling scenarios used an unusual approach. In this type of analysis policy scenarios are typically compared to a “business-as-usual” future without any policy components. However, the Integration Analysis uses a Reference Case that is different than a typical business-as-usual future scenario because it includes already implemented policies. In the Scoping Plan this unique approach was used to suggest the costs of inaction are more than the costs of action, but that claim did not include all the costs to achieve the Climate Act mandates because it excluded the CES components. Everyone outside the Hochul Administration wants to know the costs to achieve the Climate Act, not some subset of component programs.

Discussion

The draft Biennial Review does not address fundamental issues. It does acknowledge that the schedule is in danger but does not concede there are fundamental problems that may not be resolvable. The presumption that a law written by ideologues with a schedule determined for political ends must be met no matter what needs to be laid to rest. A feasibility analysis that addresses the fundamental technology and implementation schedule issues is the only rational way forward.

As it stands the draft Biennial Review is another political document that fulfills a tortured interpretation of the Climate Act requirements. It apparently parses out different components of the implementation efforts. All the transition components must be considered, and the citizens of New York deserve to know the costs for the entire implementation effort.

It is time to confront overarching issues. There are technological issues related to the Integration Analysis strategies for a zero emissions electric grid by 2040. Until the challenges associated with dispatchable emissions-free resources are resolved then it is inappropriate to shut down any existing fossil-fired generators. Relying on weather-dependent resources introduces significant reliability risks that have not been acknowledged. Until this risk is understood better, it is inappropriate to continue to just build as much wind and solar as possible and hope it works out.

The recently announced draft Advanced Nuclear Technologies Blueprint is important for two reasons. It is an appropriate outline for a feasibility study for one of the transition components that should be expanded to all technologies. Secondly, it is recognition that nuclear is the only existing technology that has a proven record of significant carbon reductions. The implications of this blueprint should be incorporated into the Biennial Review.

Conclusion

Only time will tell if the Biennial Review is only a check the box response. While there are some hints that the ramifications of an unreasonable and unachievable energy transition are become so evident that they cannot be ignored, the draft Biennial Review does not confront the problems sufficiently. Public Service Law §66-p (4) provides for a potential delay of the Climate Act schedule and it was mentioned in the draft. In my opinion, if the Hochul Administration is truly committed to addressing the problems identified in the draft, then this requirement must get more attention in the final Biennial Review.