ISO-New England Expert Speaks Out About Net-Zero Transition Risks

New York’s Climate Leadership and Community Protection Act (Climate Act) has a legal mandate for the state’s greenhouse gas emissions to meet the ambitious net-zero goal by 2050.  I have written a couple of recent posts (here and here) that described issues that have been raised by New York’s electrical grid experts but, as far as I can tell, are not being considered by the Climate Action Council.  I think part of the reason for this inaction is that the New York Independent System Operator (NYISO) has not come out in public explaining the issues that could affect reliability.  Gordon van Welie, the president and CEO of Independent System Operator of New England (ISO-NE), recently gave an interview that succinctly describes those issues.

I have written extensively on implementation of New York’s Climate Act because I believe the ambitions for a zero-emissions economy embodied in the Climate Act outstrip available renewable technology such that it will adversely affect reliability, impact affordability, risk safety, affect lifestyles, and will have worse impacts on the environment than the purported effects of climate change in New York.  New York’s Greenhouse Gas (GHG) emissions are less than one half one percent of global emissions and since 1990 global GHG emissions have increased by more than one half a percent per year.  Moreover, the reductions cannot measurably affect global warming when implemented.   The opinions expressed in this post do not reflect the position of any of my previous employers or any other company I have been associated with, these comments are mine alone.

Climate Act Background

As shown in the following overview summary. the Climate Act establishes a “Net Zero” target by 2050, various renewable energy mandates, a social equity component, and, of particular concern to me, a requirement for zero-carbon electricity by 2040. The Climate Action Council is responsible for preparing the Scoping Plan that will “achieve the State’s bold clean energy and climate agenda”.  They were assisted by Advisory Panels who developed and presented strategies to meet the goals to the Council.  Those strategies were used to develop the integration analysis prepared by the New York State Energy Research and Development Authority (NYSERDA) and its consultants that quantified the impact of the strategies.  That analysis was used to develop the Draft Scoping Plan that describes the strategies to achieve the mandates.  It was released for public comment on December 30, 2021, and comments on the draft can be submitted until June 10, 2022.

The Problem

In my opinion, the most pressing problem is the 100% zero-carbon electricity by 2040 mandate.  As described in my aforementioned posts, NYISO staff experts have generated analyses that are very concerning.  They have determined that on the order of three times the current total generating capacity will have to be built in the next 19 years.  Of that total, Dispatchable Emissions-Free Resources (DEFR) will be needed equal to around the total current capacity.  That is problematic because there is no resource available that generate power with the required characteristics.  During working meetings, those findings have been described as “stunning” and the question whether anyone is listening was asked. 

Reliability and affordability must not be compromised by the Climate Act.  I think the NYISO has to step up and publicly confront the Climate Action Council about their lack of apparent concern about these reliability issues.  Furthermore, it is laughable that the Draft Scoping Plan claims that the benefits out-weigh the costs when their implementation plan relies on some unknown and untested technology that cannot possibly be budgeted.

The Air Traffic Controller of Electricity

Commonwealth magazine published an article about the ISO-NE role operating the electric grid entitled “The Air Traffic Controller of Electricity”.  It describes an interview with Gordon van Welie, the president and CEO of ISO-NE that addresses the issues associated with the transition to an electric grid that relies on wind and solar generating resources. 

Gordon van Welie, the president and CEO of ISO-NE), says there are four pillars that support the regional power grid his organization oversees, and all four are showing signs of stress.

Pillar number one is renewable energy. With clean electricity the key to decarbonizing the transportation and heating sectors, van Welie says New England needs to produce or procure a lot more renewable energy. “It’s clear we’re not going fast enough,” he said on The Codcast.

Clearly if you want to decarbonize the energy, sector then wind and solar resources are needed.  Note that he makes the point that New England needs to both procure and produce more renewable energy.  It is a little-known fact and something that has not been incorporated into the New York Climate Act numbers that there are wind farms in New York that have contracts with New England generators for their “zero-emissions” credits.  If those generators are used to also provide credits for the Climate Act, then there is double-counting.  As noted before, the Draft Scoping Plan calls for enormous quantities of wind and solar must be developed.

Pillar number two is transmission, the ability to move electricity from where it is produced to where it is needed. Van Welie said transmission is adequate at the moment. But with power generation needing to double or triple over the next few decades to electrify the economy and deal with climate change, transmission is looming as a major hurdle. The decision by Maine voters to scrap a transmission line carrying hydro-electricity from Quebec into New England is a sign of the emerging problem

The same issues will undoubtedly arise in New York.  There is another transmission issue associated with an electric grid that relies on wind and solar.  Generating sources that produce electricity by spinning turbines provide ancillary services needed to maintain synchronous transmission grid stability.  Wind and solar generators are asynchronous so another resource has to be included to provide those services.

Pillar number three is the need for balancing resources, electricity that can be called on as backup when the sun isn’t shining or the wind isn’t blowing. “The problem in New England is we don’t have a very predictable input source into the electric grid, particularly in the winter time when the gas pipelines are constrained,” he said. “I really see [natural] gas the only option for balancing the system at the moment.”

Van Welie says other options for balancing fuels could be pursued, including clean hydrogen. But he sees little effort to seek out alternatives. “I don’t see any focus on that problem in the region,” he said. “We’re just relying on essentially season by season spot purchases of imported fuels and eventually we’re going to come up short with that strategy. “ 

The NYISO requirement for DEFR addresses this need for balancing resources. The Climate Act does not allow natural gas to be used for balancing the system.  The Draft Scoping Plan placeholder resource for DEFR is hydrogen.  I agree that there is no regional focus, including New York,  on that problem.    

The final pillar is energy adequacy. When it gets cold, and the gas pipelines coming into the region reach their limit, New England can run short of the key fuel needed to run the region’s power plants. Even when it’s not that cold, the high price of natural gas can affect the regional market.

This winter, for example, the war in Ukraine sent fossil fuel prices soaring on world markets. The higher prices for natural gas prompted New England’s electricity generators to shift to relatively lower-priced oil and even coal for fuel, both of which drove up greenhouse gas emissions. All that happened even as the winter was relatively mild. 

“It’s the second most expensive winter in our history of the wholesale markets, surpassed only by the winter of 2013-14, when we had a polar vortex,” van Welie said.

Energy adequacy in New York will be an issue when the state relies on wind and solar resources for the majority of its needs.  Until such time that an analysis of wind and solar resource availability over at least 70 years is completed New York won’t even know the worst case resource availability .  If that is not known then it will be impossible to adequately plan for energy adequacy.

Van Welie likens ISO-New England to the air traffic controllers who keep planes flying safely. Like air traffic controllers, ISO-New England doesn’t own what it oversees — the region’s electricity generating plants or transmission lines. Yet through management of the grid and oversight of various wholesale markets the grid operator is charged with getting power to where it needs to go and keeping the lights on.

This is also a good description of  NYISO responsibilities in New York.

Van Welie said it’s his responsibility to draw attention to problems as they arise, even if his warnings are not welcomed by environmental advocates who want to dispense with the use of fossil fuels immediately.

“I certainly do feel like I’m under fire and the organization as a whole is under fire,” he said.  His big fear is that demand for electricity will one day outstrip supply and force the grid operator to bring demand and supply back into balance by shutting off power to customers on a rolling basis.  

“We want people to know that’s a real risk,” van Welie said. “When we do that, it’s not going to feel like reliability. It’s going to feel like someone is turning your lights off.” 

In New York the Climate Act is a state law to dispense with the use of fossil fuels as soon as possible.   Note, however, that the law did not include a feasibility analysis.  The Climate Action Council does not want to hear there are issues.  Nonetheless, the NYISO has an obligation to keep the lights on and eliminating fossil fuels on the mandated schedule may not be compatible with current standards of reliability.  Thomas Sowell said “It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong” and that is exactly what we will be doing if the Council does not listen to the experts. 

Conclusion

The reliability oblivious Draft Scoping Plan is not addressing the four pillars described by van Welie.  I have previously described this approach as similar to wanting to jump out of a perfectly good airplane without a parachute assuming that the concept of a parachute will be developed, proven technically and economically feasible, and then delivered in time to provide a soft landing.  The president and CEO of ISO-NE has described four parachutes that should packed before jumping out of an airplane.  He sees the future clearly and is willing to speak the truth about the missing parachutes. 

I wonder if the NYISO will forcefully comment on these issues on the Draft Scoping Plan document.   I have just about given up hope that they will make these comments in a public forum.  My only hope is that these issues are being discussed in private with the Climate Action Council.  Unfortunately, there are no hints that is happening.

Empire Center Lights Out Event

On May 3, 2022 at 8:00 AM the Empire Center is hosting a meeting entitled “Lights Out? The Climate Leadership and Community Protection Act and New York’s Energy Future” in Albany, NY.  The meeting is free and open to the public.  James Hanley from the Empire Center asked if I would be willing to spread the word about the event so I am sending this to my distribution list and will make a short post.

Background

New York’s Climate Leadership and Community Protection Act (CLCPA) was passed in 2019 and became effective on 1/1/2020. The Climate Action Council has been working since then to develop plans to implement the Act.  Over the summer of 2021 the New York State Energy Research & Development Authority (NYSERDA) and its consultant Energy + Environmental Economics (E3) prepared an Integration Analysis to “estimate the economy-wide benefits, costs, and GHG emissions reductions associated with pathways that achieve the Climate Act GHG emission limits and carbon neutrality goal”.  Integration Analysis implementation strategies were incorporated into the Draft Scoping Plan when it was released at the end of 2021. 

Lights Out Event Description

The CLCPA lays out an ambitious slate of policy goals to promote clean energy and fight climate change. But can the state meet its energy needs under the new law and what will be the cost to New Yorkers?

Please join the Empire Center—and a panel of climate and energy experts from across the state—as we explore the economic and energy impacts of the CLCPA.

Event Details:
Tuesday, May 3, 2022
8:00 am to 11:00 am

Albany Capital Center
55 Eagle Street Albany, NY 12207

Agenda:
8:00 – Registration, Coffee & Networking

8:30 – The CLCPA and New York; Opening Remarks

  • James Hanley, Senior Policy Analyst, Empire Center for Public Policy

9:00 – Meeting New York’s Energy Needs Under CLCPA

  • Gavin Donohue, President of the Independent Power Producers of New York
  • Commissioner John Howard, New York State Public Service Commission
  • Ken Pokalsky, Vice President of the Business Council of New York

10:00 – Consumer Effects Of CLCPA; Costs, Benefits and Impact?

  • Richard Berkley, Executive Director of the Public Utilities Legal Project
  • Michael Butler, Mid-Atlantic Regional Director of the Consumer Energy Alliance
  • Donald Chahbazpour, Director of Policy and Regulator Strategy, National Grid
  • Hon. Kevin Parker, Chairman of the Committee on Energy and Telecommunications

Conclusion

It looks like a great group of speakers and I am planning to attend.  Actually it sounds like it would be a good topic for a future post.

Pragmatic Approach to Climate Change Policy

The Climate Leadership and Community Protection Act (Climate Act) has a legal mandate for New York State greenhouse gas emissions to meet the ambitious net-zero goal by 2050 but is anything but a pragmatic approach.  Everyone wants to do right by the environment to the extent that they can afford and not be unduly burdened by the effects of environmental policies.  Similarly, there certainly is a risk associated with climate change that popular opinion wants to address.  This post highlights a couple of recent articles that I believe should be incorporated into a pragmatic alternative to the Climate Act. 

I have written extensively on implementation of New York’s response to that risk because I believe the ambitions for a zero-emissions economy embodied in the Climate Act outstrip available renewable technology such that it will adversely affect reliability, impact affordability, risk safety, affect lifestyles, and will have worse impacts on the environment than the purported effects of climate change in New York.  New York’s Greenhouse Gas (GHG) emissions are less than one half one percent of global emissions and since 1990 global GHG emissions have increased by more than one half a percent per year.  Moreover, the reductions cannot measurably affect global warming when implemented.   The opinions expressed in this post do not reflect the position of any of my previous employers or any other company I have been associated with, these comments are mine alone.

Climate Act Background

As shown in the following overview summary. the Climate Act establishes a “Net Zero” target by 2050, various renewable energy mandates, a social equity component, and, of particular concern to me, a requirement for zero-carbon electricity by 2040. The Climate Action Council is responsible for preparing the Scoping Plan that will “achieve the State’s bold clean energy and climate agenda”.  They were assisted by Advisory Panels who developed and presented strategies to meet the goals to the Council.  Those strategies were used to develop the integration analysis prepared by the New York State Energy Research and Development Authority (NYSERDA) and its consultants that quantified the impact of the strategies.  That analysis was used to develop the Draft Scoping Plan that describes the strategies to achieve the mandates.  It was released for public comment on December 30, 2021, and comments on the draft can be submitted until June 10, 2022.

Alternate Climate Change Policies

My Citizens Guide to the Climate Act is intended to be a layman summary of the difficulties of a net-zero transition.  I have posted articles recommending books that do a much better job than I have done to explain the problems here and here.  Unfortunately reading a book is a big commitment and recently I described an article, Inconvenient Truths About Energy, that describes most of the issues that worry me.  In brief, the consensus of all the authors of these recommendations argue that New York’s plans will cost a lot, hurt the world’s poor, and fail to fix the issues.

This post highlights two articles that are consistent with what I think would constitute a pragmatic approach to climate change.  In “A ‘Plan B’ for addressing climate change and the energy transition” Judith Curry describes problems with all net-zero energy transition programs.  On March 10, 2022 Doomberg published “A Serious Proposal on US Energy” that described four energy priorities.

Plan B

Judith Curry’s article describes the popular narrative that there is a climate change crisis and sums up the problem with the Climate Act and all net-zero energy transition programs:

“In a nutshell, we’ve vastly oversimplified both the problem of climate change and its solutions.  The complexity, uncertainty, and ambiguity of the existing knowledge about climate change is being kept away from the policy and public debates.  The dangers of manmade climate change have been confounded with natural weather and climate variability. The solutions that have been proposed for rapidly eliminating fossil fuels are technologically and politically infeasible on a global scale.” 

She continues the discussion of the current state of the science and makes another important point that argues for a more pragmatic approach to potential climate change impacts.  The Intergovernmental Panel on Climate Change (IPCC) modeling “projections neglect plausible scenarios of natural climate variability, which are acknowledged to dominate regional climate variability on interannual to multidecadal time scales”.  Natural climate variability accounts for most of impacts of the extreme weather events that “prove” the need for immediate action.  Ultimately “emissions reductions will do little to improve the climate of the 21st century – if you believe the climate models, most of the impacts of emissions reductions will be felt in the 22nd century and beyond”.  The emotional plea that we have to do something immediately for our children and grandchildren is not supportable.

The article goes on to address the urgency for the energy transition.  She defines Plan A as the attempt to reach net-zero in carbon emissions by 2050.  It is based on the precautionary principle that “rapidly reducing CO2 emissions is critical for preventing future dangerous warming of the climate”.  The Climate Act rationale is that there is a crisis.   However, Curry points out:

Note that the IPCC itself does not use the words ‘crisis’, ‘catastrophe’, or even ‘dangerous’; rather it uses the term ‘reasons for concern.’ Apart from the scientific uncertainties, the weakest part of the UN’s argument about manmade global warming is that it is dangerous. The highest profile link to danger relies on linking warming to worsening extreme weather events, which is a tenuous link at best.

Curry raises another important point:

All other things being equal, everyone would prefer clean over dirty energy.  However, all other things are not equal. We need secure, reliable, and economic energy systems for all countries in the world. This includes Africa, which is currently lacking grid electricity in many countries. We need a 21st century infrastructure for our electricity and transportation systems, to support continued and growing prosperity. The urgency of rushing to implement 20th century renewable technologies risks wasting resources on an inadequate energy infrastructure, increasing our vulnerability to weather and climate extremes and harming our environment in new ways.

The article goes on to discuss a Plan B:

The problem is with the urgency of transitioning away from fossil fuels, driven by fears about global warming.  By rapidly transitioning to this so-called clean energy economy driven by renewables, we’re taking a big step backwards in human development and prosperity. Nations are coming to grips with their growing over dependence on wind and solar energy.  Concerns about not meeting electricity needs this winter are resulting in a near term reliance on coal in Europe and Asia. And we ignore the environmental impacts of mining and toxic waste from solar panels and batteries, and the destruction of raptors by wind turbines and habitats by large-scale solar farms.

She goes on to argue:

Here’s a framework for how we can get to a Plan B.  A more pragmatic approach to dealing with climate change drops the timelines and emissions targets, in favor of accelerating energy innovation. Whether or not we manage to drastically curtail our carbon dioxide emissions in the coming decades, we need to reduce our vulnerability to extreme weather and climate events.

So what does a Plan B actually look like?  Rather than top-down solutions mandated by the UN, Plan B focuses on local solutions that secure the common interest, thus avoiding political gridlock. In addition to reimagining 21st century electricity and transportation systems, progress can be made on a number of fronts related to land use, forest management, agriculture, water resource management, waste management, among many others.  Human wellbeing will be improved as a result of these efforts, whether or not climate change turns out to be a huge problem and whether or not we manage to drastically reduce our emissions.  Individual countries and states can serve as laboratories for solutions to their local environmental problems and climate-related risks.

A Serious Proposal on US Energy

As good as Dr. Curry’s article is, it is short on specifics for an alternate implementation plan.  The Doomberg article provides some specifics.  The article proposes four priorities to address the direct connection between energy and economic power. My proposed plan incorporates three of the priorities.

Not so long ago the idea that natural gas could be used a bridge fuel until aspirational technology that had zero emissions but could maintain current reliability standards was generally accepted as a rational approach. Doomberg quotes EQT CEO Toby Rice with what has happened to the natural gas industry: “You’re in a situation today where I think it’s very hard pressed for companies to be incentivized to go out and develop this large-scale infrastructure that this country needs, this world needs because of the regulatory uncertainty and just the pressure we get from anti-fossil fuel, keep-it-in-the-ground groups that are out there.Doomberg argues that “It is time to put an end to nuisance lawsuits, regulatory inertia, and environmental radicalism” because expanding the use of natural gas provides immediate benefits.  “It borders on criminal negligence that much of the Northeast burns oil to heat their homes” New England relies on foreign sources of not only oil but natural gas because of a lack of infrastructure.  New York State decisions blocking pipelines have materially contributed to this negligence.

Doomberg’s second priority would expand the production of a crucial component of solar cells:

With the natural gas industry unleashed, the President should make co-located production of polysilicon another national priority. The US blundered into allowing China to secure a dominant position in this critical market, and it is time to reverse that error. Making solar cells is incredibly energy-intensive, and cheap natural gas is the ideal feedstock. There’s going to be huge demand for solar in the decades ahead, and the only thing stopping the US from being the preferred global supplier is a lack of polysilicon production capacity.

The single stupidest New York decision related to zero-emissions energy is the closure of two nuclear stations.  The Shoreham plant was completed but closed in 1989 before it operated.  Indian Point was closed before its operating license expired removing 2,000 MW of the only zero-emissions capacity that can be expanded at the scale needed for New York’s electric system. The third Doomberg priority proposes a commitment to nuclear power.  In particular, “accelerate the development and deployment of small modular reactors (SMRs), which are safer, cheaper, and quicker to bring online than traditional nuclear power plants”.

Finally, Doomberg argues that the automotive industry should pivot from “a focus on full battery electric vehicles (BEVs) to plugin hybrid electric vehicles (PHEVs) instead”.   The reason: “there simply aren’t enough battery materials available to support the conversion of a substantial portion of our automotive fleet to full electric.”  It is ludicrous to not recognize that battery materials are a constraint, and that we must manage to that constraint.

Pragmatic Environmentalist Alternate Plan

The basis of my recommendations is my belief that the ambitions for a zero-emissions economy embodied in the Climate Act outstrip available renewable technology, that there is little additional risk for a policy that emphasizes innovation over implementation at this time, and that doing “good enough” will address many of the problems that the Climate Act purports to address. In short, my alternate plan would incorporate the natural gas, nuclear, and pivot away from BEV Doomberg priorities.   A recent article summarizes my fears that the Climate Act “solutions” are worse than the problem and his alternative priorities are more appropriate.

The ultimate problem with a transition of the electric grid that depends upon intermittent wind and solar generation is that there are extended periods when those resources are low.  Electric resource capacity planners have identified the need for a dispatchable emissions-free resource (DEFR) for those periods.  Unfortunately, there is nothing available at this time that meets the characteristics needed for that resource. 

I recently published an article describing my pragmatic principles as they relate to the Climate Act and I will mention several here.  Gresham’s Law of Green Energy shows that reliance on subsidized renewable resources will drive out competitive generators, lead to higher electric prices, and reduce economic growth.  I recommend a deployment plan that makes wind and solar implementation conditional upon the development of viable DEFR before any further deployment.  There is no sense going down that path until the required technology is unavailable.  In the meantime, inherent subsidies should be discarded.  New York’s electric markets should pay very little for any generating resource that is not dispatchable and discount “semi-dispatchable” resources that cannot guarantee availability during periods of high expected demand. In this approach solar net metering would be eliminated and the subsidies for the Champlain Hudson Express project would be much reduced because power is not guaranteed during the winter.

The Pareto principle or 80-20 rule states that 20% of efforts or inputs can yield 80% of the results or outputs and exemplifies “good enough”.  The Doomberg priority that the automotive industry should pivot from “a focus on full battery electric vehicles (BEVs) to plugin hybrid electric vehicles (PHEVs) instead” is a great example of the value of that principle.  I also believe that going all in for natural gas as suggested by Doomberg should be a priority.  New York’s irrational jihad against natural gas is not in the best interests of the state.

One of the problems highlighted in the Draft Scoping Plan is the effects of diesel exhaust on environmental justice communities.  The aspirational goal to convert tractor trailer trucks to zero-emissions BEVs is such a great leap forward in technology that it could be years, if ever, before it could be viable.  Conversion to PHEV trucks could resolve some of the issues but the development and deployment of compressed natural gas (CNG) trucks is further along.  Encouraging CNG trucks and cars would provide immediate reductions in inhalable particulate and ozone ambient concentrations.  This is a real problem as opposed to the contrived problems claimed from the use of natural gas that are incorporated into the Climate Act.

There is another viability aspect of the need for DEFR that should be considered.  One of my pragmatic principles is that we can do almost anything we want, but we can’t do everything.  New York’s reliability experts are worried about the quantity of generating capacity that is needed to meet the 2040 goal of a zero-emissions electric grid in general.  However, the fact that recent analyses project that the quantity of DEFR needed is on the order of the entire existing generation capacity raises a financial concern.  The only time that DEFR is needed is when there is lull in wind and solar resource availability.  When the costs for that high quantity but low-capacity requirement are determined it may be so high that New York will be unable to address other pressing environmental issues.

Conclusion

Three books support the conclusions of the articles referenced here: “False Alarm: How Climate Change Panic Costs Us Trillions, Hurts the Poor, and Fails to Fix the Planet” by Bjorn Lomborg;  “Apocalypse Never – Why Environmental Alarmism Hurts Us All” by Michael Shellenberger; and “Unsettled: What Climate Science Tells Us, What It Doesn’t, and Why It Matters” by Steven Koonin.  The referenced articles make a compelling case that the Climate Act is simply not good policy.  Dr. Curry explains that the claims of a crisis are not backed up when the veneer of the climate change “science” narrative is peeled back to the fundamental findings.  This obviates the need to charge ahead deploying today’s renewable technologies.  The Doomberg article offers serious solutions for the energy system.

I believe that existing technology is just not ready to meet the ambitions for a zero-emissions economy embodied in the Climate Act.  I concur with Dr. Curry that a “more pragmatic approach to dealing with climate change drops the timelines and emissions targets, in favor of accelerating energy innovation” and that “whether or not we manage to drastically curtail our carbon dioxide emissions in the coming decades, we need to reduce our vulnerability to extreme weather and climate events.” My pragmatic approach would make deployment of wind and solar contingent upon the development of a viable DEFR technology.  The development of a new and hopefully more viable nuclear generating technology such as small modular reactors should be a priority even if a DEFR solution is found.  There are many advantages of natural gas that make it ideal for intermediate and peak load uses on the electrical grid; residential heating, cooking, hot-water, and backup electric generators; and as vehicle fuel.  It is not perfect because there are some emissions but when considered on a fair reliability, affordability, and environmental impact basis it deserves to be part of a sustainable solution to minimize overall global impacts and improve human well-being. 

I have no illusions that the Climate Act will be modified to incorporate nuclear and natural gas as priorities with the current administration and legislature.  However, when the costs are finally publicized to the general public or even worse show up on utility bills, we will see how much New Yorkers are willing to pay for achieving greenhouse gas emission reduction objectives and whether that willingness has limits.  I have long maintained that the costs will be too much and that there will be “yellow-vest” protest response

Climate Act Scoping Plan Overview Presentation – Affordability and Reliability

The Climate Leadership and Community Protection Act (Climate Act) has a legal mandate for New York State greenhouse gas emissions to meet the ambitious net-zero goal by 2050. I recently was given the opportunity to brief my New York State Senator, John Mannion, about my concerns related to affordability and reliability in the Climate Act Draft Scoping Plan.  This post describes the slide presentation and provides a link to the documentation handout for it.

Everyone wants to do right by the environment to the extent that they can afford to and not be unduly burdened by the effects of environmental policies.  I have written extensively on implementation of New York’s response to that risk because I believe the ambitions for a zero-emissions economy embodied in the Climate Act outstrip available renewable technology such that it will adversely affect reliability, impact affordability, risk safety, affect lifestyles, and will have worse impacts on the environment than the purported effects of climate change in New York.  New York’s Greenhouse Gas (GHG) emissions are less than one half one percent of global emissions and since 1990 global GHG emissions have increased by more than one half a percent per year.  Moreover, the reductions cannot measurably affect global warming when implemented.   The opinions expressed in this post do not reflect the position of any of my previous employers or any other company I have been associated with, these comments are mine alone.

Climate Act Background

The Climate Act establishes a “Net Zero” target by 2050. The Climate Action Council is responsible for preparing the Scoping Plan that will “achieve the State’s bold clean energy and climate agenda”.  They were assisted by Advisory Panels who developed and presented strategies to the meet the goals to the Council.  Those strategies were used to develop the integration analysis prepared by the New York State Energy Research and Development Authority (NYSERDA) and its consultants that quantified the impact of the strategies.  That analysis was used to develop the Draft Scoping Plan that was released for public comment on December 30, 2021. Comments on the draft can be submitted until June 10, 2022.

Presentation

I list the presentation slides below.  The documentation summarizes what I said for each slide and provides references for the statements.   I highlight some of the key points I tried to make in this description of the slides.

I tried to make the point in the following slide that most New Yorkers are unaware of the Climate Act.  Not only that but fewer still understand the scope and magnitude of the changes required in order to meet the Climate Act targets and even fewer are aware of the costs, benefits, and threats to reliability inherent in the massive transition of our existing energy system to the net-zero targets of the Act.  The presentation hit the points that I think the public should understand.

In my presentation I explained that I think the root problem of the Scoping Plan approach is over simplification of possible solutions.  Reality is that there are many issues with every aspect of the proposed energy transition.  I said that there are two particular problems with the proposed solutions: they don’t work all the time and they are more complicated than existing technology.  As a result, there are ramifications that need to be considered.

I included this slide to just hit the highlights of the Act.  I mentioned that the 100% zero-carbon electricity by 2040 target was a particular worry of mine.

This slide more or less presented the material in the Climate Act Background section above.  I did mention that 10 public hearings have been scheduled.

The point of this slide was to point out that the transportation vision requires massive changes to the transportation system and significant limitations on personal choice.  I believe that most people recognize that there are limitations to electric vehicles and have decided that they are not a viable option as the primary household vehicle even if they could afford one.  The primary limitation that people in Upstate New York understand is that electric vehicles don’t work so well in cold weather.  In addition, electric vehicles are more complicated because at-home charging has infrastructure requirements and another daily chore to hook the car up for charging.  This is a concern for those of us who have the option to charge at home but what about all those people who park on the street or in a parking lot?  Providing infrastructure for them will be very expensive.

In order to prove the Climate Act is in the best interests of the State, the Scoping Plan claims benefits.  I explained that I thought that the proposed health benefits were exaggerated, that I have been unable to verify their estimates and that they are all societal benefits that will not directly affect consumer costs. 

The largest benefit proposed is for avoided GHG emission impacts on climate change.  I estimate that these benefits should be on the order of $60 billion dollars based on eliminating New York’s maximum annual GHG emissions overnight and multiplying by New York’s value of carbon.  The Scoping Plan claims benefits of at least $235 to $250 billion by counting the benefits multiple times. This is the same as claiming that a weight loss of ten pounds five years ago represents a 50-pound reduction. Obviously, that is wrong and if that error is corrected the costs are greater than the benefits.

This graph has been shown at public comment hearings and is the support for the Draft Scoping Plan claim that “The cost of inaction exceeds the cost of action by more than $90 billion”.  I explained that there were issues with cost numbers in addition to the benefits problems described previously. In particular, it is necessary to parse the language to understand how the Integration Analysis presents the costs.  They are presented as net direct costs because the cost to use fossil fuels are subtracted from the costs to meet the reduction targets.  The bigger issue is that the net present value of benefits and costs are presented relative to Reference Case.  I admit that I did not pick up on the implications of that condition for five months.  It turns out that vehicle electrification costs appear to be included in the Reference Case because the electric vehicle legislative mandate was an “implemented policy”.  However, the $700 billion costs to electrify the transportation investment category are a necessary cost for the net-zero transition.  I don’t think they should be included in the Reference Case because those costs are a necessary transition expense.  If those costs are moved from the Reference Case to the mitigation scenarios where they belong, the costs are much greater than the benefits.

I also made the point that this graphic is representative of the abysmal cost documentation in the Scoping Plan.  For the most part the only numbers provided are in bar charts like this and none of the cost category values are quantified.  This inexcusable shortcoming of the Draft Scoping Plan is the subject of a post which provides more information.  I believe that the cost for every category in the Draft Scoping Plan should be listed in a spreadsheet and that costs for each measure that make up the category costs should also be included.  Without this information it is impossible to provide meaningful comments on the financial viability of the scenarios.

The following slide explains that corrections to the inaccurate benefits and misleading costs presented in the Scoping Plan invalidate the claim that the benefits are greater than the costs.  Approximately $700 billion should be added to the net system costs column in the revised section of the table and the  avoided GHG benefits should be only $60 billion.  The costs are greater than the benefits by at least $760 billion.   

In 2040 the electric grid is supposed to be converted to zero emissions.  In order to describe potential reliability issues associated with that transition this slide and the following two slides discuss the electric grid.  The point of this slide is that the electric grid is big, complex and currently dependent upon generating resources that can be dispatched by the operators who match load with generation on a minute-by-minute basis.

This slide explains that significant infrastructure is required for the transition and that it will complicate matching generation and load.  Wind and solar are not dispatchable without energy storage, transmission and ancillary services resources.  I pointed out that short-term variations in wind and solar require an energy storage resources that is relatively small but will be used frequently.  The Li-Ion 4-hour storage batteries work well for this requirement.  There are significant diurnal variations in renewable resources if solar is a major component.  This needs to be addressed by energy storage resources that are on the order of the size of the solar capacity in the system.  In my opinion this resource has not been implemented on a commercial scale. In addition, additional  energy storage is needed for cloudy days. The resources needed for both these applications will be used regularly.  The biggest problem is the energy storage needed for infrequent but extended periods of low wind and solar output.  A large amount of long-term storage capacity is needed to cover a multi-day renewable resource drought but it will not be used a lot.  If it is not used much how will the market pay for the resource?

If the grid operators cannot match the load with available generation, then blackouts similar to the February 2021 blackouts in Texas are inevitable.  The operators task is made more difficult because load is not constant.  Ultimately the problem of most concern is that the periods when the renewable resources are lowest are also periods when load is expected to be highest once home heating is electrified.  This is an enormously important issue but I don’t think it has received the appropriate level of consideration by the Climate Action Council.

I recently posted an article that highlighted the content (Presentation) and conversations at a NYISO meeting on March 24, 2022 that addressed the System & Resource Outlook Update effort with the Electric System Planning Working Group.  I prepared the table that shows the existing capacity, the capacity proposed for the three Draft Scoping Plan scenarios, and the base case for the Update options discussed at the meeting.  One of the concerns at this meeting of New York State reliability experts was the amount of new infrastructure needed.  The total of new generation required is around three times the 2021 total existing generation.  That does not include the ancillary services and transmission upgrades needed.  The other concern was the Zero-Carbon Firm Resource.  This is the “large amount of long-term capacity needed to cover a multi-day renewable resource drought that it is not used a lot” resource needed when the loads are predicted to be highest in the future.  The problem is that there isn’t any commercially demonstrated resource available today or expected for this resource in the near future.  The table shows that this resource is need to provided capacity that is greater than current installed capacity.  The conversation that caught my attention is when the experts said: The results are “stunning” and “Is anyone listening”.  They are clearly worried and the Climate Action Council has shown no sign of concern about this issue.

There is another issue for the Council.  Comparing the Draft Scoping Plan capacity resource distributions with the NYISO projected capacity shows significant differences.  It is not clear how will those differences will be resolved. 

Unfortunately, the Climate Action Council seems to be more concerned about activist claims to stop all new fossil fuel infrastructure than the critical need for a proven replacement.  It seems to me that it would be prudent to make the implementation schedule conditional upon the availability of the necessary technology.  That Council leadership has not stepped up and said that fossil fuel infrastructure is needed until we have a viable alternative is necessary is not a good sign.

Even though electric grid reliability is an important topic it also it is one that most people don’t have any experience with so I included a description of reliability and affordability related to home electrification that we all understand.  Because the buildings sector is the largest source of GHG emissions, decarbonization is a primary strategy.  My primary residential reliability concern is what happens when there is an extended electric outage?  There is not a lot of information available about the cost affordability for residential home heating so I added slides discussing residential heating sector costs.

The primary solution for residential home heating in the Draft Scoping Plan is heat pumps: “Modern heat pumps that work in very cold weather are commercially available and able to keep homes and businesses comfortable year-round, as long as they are properly chosen, sized, and paired with an energy-efficient building envelope. “  Frankly, everything I have seen on social media from NYSERDA about heat pumps is propaganda because it only shows the benefits and does not mention any downsides.  The Plan notes three caveats for success: properly chosen, sized, and paired with an energy efficient building envelope or building shell. 

The unmentioned downside is the building shell requirement.  The Scoping Plan analysis included two levels: basic shell – 27-44% reductions and deep shell – 57-90% reductions. The Integration Analysis projects that residential building stocks will be 66% basic shell and 26% deep shell by 2050.  In my opinion the description of what is required for the two levels is inadequate.  I assume that the deep upgrade must meet the international standard for passive buildings that includes following measures: Improved thermal insulation, considerably improved airtightness, use of high quality windowsreduction of thermal bridges, and ventilation with highly efficient heat recovery.   In my opinion deep shells will be needed more than the Plan assumes and bringing homes up to that level will be difficult and costly.

The upper half of table in the following slide shows the Retrofit Costs based on the referenced Integration Analysis spreadsheet.  According to the device costs in the Draft Scoping Plan an air source heat pump plus electric resistance backup will cost $15,818.  The other option is a ground source heat pump and that costs $40,491.  The unpublicized costs are $6,409 for a basic building shell improvement or $45,136 for a deep building shell improvement.  Combining the two, the air source heat pump option totals $22,227 for the basic shell and $60,954 for the deep shell.  For a ground source heat pump the totals range from $40,491 for a basic shell to $79,218 for a deep shell.

The lower half of table subtracts out the replacement costs of the existing system to calculate the retrofit costs.  In 2030 when you can no longer purchase anything but a heat pump you won’t have to buy the replacement appliance so you can subtract that cost.  For example, if you own a distillate boiler the $9,260 replacement cost can be subtracted from the component costs – an air source heat pump with a basic shell is $12,967 instead of $22,227. As with all other aspects of the implementation there is a complication. In 2030 you will have to replace your existing appliance when it breaks with a heat pump.  If it breaks during the winter, you won’t necessarily be able to do a deep shell retrofit at the same time because it is a big investment in time and effort.   That will be a serious imposition on the homeowner.

It is also relevant that we keep the context of New York’s emissions relative to the rest of the world vis-à-vis global warming in mind.  Although activists claim New York should do something because the state is “large” relative to other countries when it comes to our economy (9th), we should also consider the fact that our emissions are small relative to many others (35th).  Moreover, when you consider GHG efficiency (the country’s emissions divided by its GDP) we are already doing a good job -New York ranks third behind only Norway and Sweden.

More importantly, New York’s 2016 GHG emissions were less than one half of one percent of global emissions in 2016 and global emissions are increasing by more than one half of one percent per year.  Because global emissions are increasing so much, they will replace all of our emissions completely in about a year.  Therefore, I expect no change of global warming effects on weather.

The presentation concluded that everybody wants to do something about climate change and do right by the environment.  However, it is important that we don’t do something that will do more harm than good when we try to address climate change.  Based on my analysis of the proposed strategies in the Scoping Plan it will do more harm than good.  It boils down to the fact that existing technology is just not ready for the magnitude and schedule of the transition outlined in the Scoping Plan. 

Recommendations

I did not prepare a slide with my recommendations.  I think that politicians worried about the issues raised in this presentation should submit comments to the Climate Action Council but also send a copy to Co-Chairs Doreen Harris and Basil Seggos.  The Council has to be made aware that there are real concerns from the public and I encourage public comments to the comment portal.

I suggest comments on a couple of topics.  There have been suggestions that the Council will setup workshops on particular issues.  I am going to submit a comment that includes a request for full disclosure on particular issues.  Too often in the past only one side of the story has been heard.  I think the workshops should be used to provide stakeholders with a venue to ask questions and get answers.  When the meeting is announced it should offer an opportunity for stakeholder questions to be submitted before hand so that they can be addressed during the workshop.  In my opinion workshops on the following topics would be appropriate: how reliability concerns in the electricity sector will be addressed and resolved, cost benefit calculations, residential electrification, and transportation strategies.

I am also going to submit a comment arguing that the Council has to make reliability and affordability a priority.  As shown in the presentation it seems prudent that the implementation schedule should be conditional based on the availability of proven technology needed for reliability per experts from NYISO and NYS reliability council.  The Council has to make it a priority to listen to the experts who are responsible for New York reliability.  Thomas Sowell said “It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong”. That is exactly what we will be doing if the Council does not listen to the experts. 

I am also going to submit a comment saying that the Draft Scoping Plan cost documentation is inadequate.  The cost categories for every cost in every figure in the Scoping Plan should be documented in a spreadsheet that lists the totals, the cost categories within the total,s and the costs for each measure that is included in the cost categories.

The Council should also establish criteria for reliability and affordability. The reliability criteria should define the implementation schedule conditions.  They should provide guidelines for the NYISO and NYS Reliability Council definition of acceptable technology such as for the “Zero-carbon firm resources”.  For example, technology X has been proven commercially on the scale necessary for New York’s requirements so we can proceed with implementation that requires it.  Until a technology is available there has to be a hold on the schedule. Similarly, the Council should define affordability thresholds.  For this parameter, the number of service disconnects or percentage of New Yorkers in fuel poverty should not be greater than value X would be appropriate conditions.

Conclusion

I listened to the introduction of one of the public hearings and the overview presentation was mostly an advertisement for the Climate Act.  There was no suggestion that there might be issues associated with reliability.  The machinations that “prove” that the benefits are greater than the costs indicate that the analysis was done so they claim a pre-determined conclusion.  I hope that this overview gives readers a taste of the reasons why I am convinced that without changes the impacts of this so-called solution will be worse than the effects of climate change.  Anything we do will be displaced in a year, cost a lot of money and risk catastrophic blackouts. 

If any reader is interested in having me give this presentation to a group, let me know at NYpragmaticenvironmentalist@gmail.com.

Pragmatic Principles and the Climate Act

The Climate Leadership and Community Protection Act (Climate Act) has a legal mandate for New York State greenhouse gas emissions to meet the ambitious net-zero goal by 2050. I have not mentioned my principles for pragmatic environmentalism in quite a while.  This post explains how the Climate Act relates to them. 

Everyone wants to do right by the environment to the extent that they can afford to and not be unduly burdened by the effects of environmental policies.  I have written extensively on implementation of New York’s response to that risk because I believe the ambitions for a zero-emissions economy embodied in the Climate Act outstrip available renewable technology such that it will adversely affect reliability, impact affordability, risk safety, affect lifestyles, and will have worse impacts on the environment than the purported effects of climate change in New York.  New York’s Greenhouse Gas (GHG) emissions are less than one half one percent of global emissions and since 1990 global GHG emissions have increased by more than one half a percent per year.  Moreover, the reductions cannot measurably affect global warming when implemented.   The opinions expressed in this post do not reflect the position of any of my previous employers or any other company I have been associated with, these comments are mine alone.

Climate Act Background

The Climate Act establishes a “Net Zero” target by 2050. The Climate Action Council is responsible for preparing the Scoping Plan that will “achieve the State’s bold clean energy and climate agenda”.  They were assisted by Advisory Panels who developed and presented strategies to the meet the goals to the Council.  Those strategies were used to develop the integration analysis prepared by the New York State Energy Research and Development Authority (NYSERDA) and its consultants that quantified the impact of the strategies.  That analysis was used to develop the Draft Scoping Plan that was released for public comment on December 30, 2021. Comments on the draft can be submitted until June 10, 2022.

Pragmatic Environmentalist Principles

I put together my principles for pragmatic environmentalism to describe a pragmatic approach to environmental issues.  So far, I have listed 13 principles that exemplify pragmatic environmentalism.  Five of these principles are my own but the rest have been developed by others.  I am going to describe four principles that directly relate to climate change and four that indirectly affect Climate Act implementation in this post.  This post will also be used to support an upcoming post on my pragmatic recommendations for the Climate Act.

All four of the relevant principles that directly relate to climate change have been developed by others.  The Climate Act does not correctly differentiate between weather and climate. Frequently events that are simply extreme examples of normal weather variation to climate change are used as “proof” that climate change effects are apparent now. The first principle addresses this issue.  Dr, Cliff Mass’s  Golden Rule of Climate Extremes states that the more extreme a climate or weather record is, the greater the contribution of natural variability.  Dr. Mass explained why this happens in a series of posts on the Pacific Northwest heatwave of 2021.  He concluded in his analyses that global warming was responsible for only 1 to 2o F of the observed 30 – 40o F anomaly above normal.

There are two principles related to climate change economics.  Gresham’s Law of Green Energy is named after Sir Thomas Gresham, a 16th-century British financier who observed that “bad money drives out the good.” Jonathan Lesser has coined “Gresham’s Law of Green Energy” to describe the green economy.  The transition to a zero-emissions energy system relies on green energy subsidies that transfers wealth and does not create wealth. The subsidies or “bad” money take money out of the system that was “good” inasmuch as it was being used productively. In particular, Lesser argues that   “subsidized renewable resources will drive out competitive generators, lead to higher electric prices, and reduce economic growth”.  The second economic principle, Ridley’s Paradox, states that economic damage from man-made ‘climate change’ is illusory whereas damage from man-made ‘policies’ to fight the said change is real.  Both principles suggest that issues lie ahead for the Climate Act net-zero transition.

Roger Pielke, Jr’s Iron law of climate simply states that while people are often willing to pay some price for achieving environmental objectives, that willingness has its limits.  The Climate Act requires the Climate Action Council to “[e]valuate, using the best available economic models, emission estimation techniques and other scientific methods, the total potential costs and potential economic and non-economic benefits of the plan for reducing greenhouse gases, and make such evaluation publicly available” in the Scoping Plan.  However, at this time this requirement is not being met.  There is insufficient information to determine how much New Yorkers will have to pay for achieving the net-zero targets.  Consequently, we will have to wait to see how his principle plays out.

I authored one of the four principles that indirectly relate to the Climate Act.  It is pretty obvious in industry but I haven’t found anyone who has made the Air Pollution Control Costs point that as air pollution control efficiency increases the control cost per ton goes up exponentially.  If we were only trying to reduce our GHG emissions by 50% the costs would be much less than the net-zero 85% reduction combined with 15% sequestration target.

That principle is related to the Pareto Principle  or 80-20 rule that states that 20% of efforts or inputs can yield 80% of results or outputs.  If the Climate Act did not mandate net-zero, then we could get most of the benefits for the “easy” emission reductions.  Accepting that outcome removes most of the affordability and reliability risks associated with the radical transformation of the energy system needed to meet Climate Act targets.

The resources necessary to implement the Climate Act are rationalized as necessary to fight climate change.  However, the necessary actions are not considered relative to other environmental and social issues.  For example, there are water infrastructure issues across New York that must be addressed before systems break down completely.  There are disadvantaged communities that have lead pipes and lead paint in their homes.  Advocates have not considered that in order to implement Climate Act initiatives these other environmental issues may not be addressed simply because the resources available are finite per the principle: We can do almost anything we want, but we can’t do everything:

A glittering generality is an emotionally appealing phrase so closely associated with highly valued concepts and beliefs that it carries conviction without supporting information or reason.  The climate change is an “existential” threat narrative and the idea that power will be cheap because the sun and wind are free are both Glittering Generalities that do not represent Pragmatic Environmentalism.  In “A ‘Plan B’ for addressing climate change and the energy transition” Judith Curry sums up the problem with the glittering generalities in all net-zero energy transition programs:

“In a nutshell, we’ve vastly oversimplified both the problem of climate change and its solutions.  The complexity, uncertainty, and ambiguity of the existing knowledge about climate change is being kept away from the policy and public debates.  The dangers of manmade climate change have been confounded with natural weather and climate variability. The solutions that have been proposed for rapidly eliminating fossil fuels are technologically and politically infeasible on a global scale.” 

Conclusion

There are very few aspects of the Climate Act that represent a pragmatic approach to climate change mitigation.  The rationale for the Climate Act frequently refers to extreme weather events that are more likely due to natural variability than climate change.  The Draft Scoping Plan is littered with glittering generalities that carry conviction without supporting information or reason. 

The economics in the Draft Scoping Plan are not pragmatic.  The reliance on subsidized renewable resources will drive out competitive generators, lead to higher electric prices, and reduce economic growth.  The economic damage from man-made ‘climate change’ in New York is illusory whereas damage from the Climate Act ‘policies’ to fight the said change is real.  When the costs are finally publicized to the general public, we will see how much New Yorkers are willing to pay for achieving greenhouse gas emission reduction objectives and whether that willingness has limits.

Given that air pollution control efficiency increases the control cost per ton goes up exponentially and that 20% of efforts or inputs can yield 80% of the results or outputs, a more pragmatic approach would be to determine some lower level of “good enough” that will achieve emissions reductions without risking current standards of reliability and affordability.   Ultimately, we can do almost anything we want, but we can’t do everything so the enormous commitment to the Climate Act net-zero targets has to be considered relative to other pressing environmental and social problems.

New York Climate Act: Cost Estimate Sleight of Hand

The major concerns for any net-zero transition program are the effects on reliability and affordability.  On March 25, 2022 an article of mine was posted: New York Climate Act: What the Experts are Saying Now that explained why the experts responsible for the reliability of the New York electric grid are concerned about the mandated transition to a “zero-emissions” electric grid by 2040. This post addresses affordability showing that the costs presented in the plan for the transition are mis-leading at best.

Background

New York’s Climate Leadership and Community Protection Act (Climate Act) was passed in 2019 and became effective on 1/1/2020. The Climate Action Council has been working since then to develop plans to implement the Act.  Over the summer of 2021 the New York State Energy Research & Development Authority (NYSERDA) and its consultant Energy + Environmental Economics (E3) prepared an Integration Analysis to “estimate the economy-wide benefits, costs, and GHG emissions reductions associated with pathways that achieve the Climate Act GHG emission limits and carbon neutrality goal”. Three Integration Analysis implementation strategies were incorporated into the Draft Scoping Plan when it was released for public comment at the end of 2021.  These scenarios include different policy options to meet and exceed the Climate Act targets. 

My last post highlighted results shown in a draft presentation at a New York Independent System Operator (NYISO) meeting about an analysis being done to project the amount and type of generating capacity needed to transition the New York electric grid to “zero-emissions” by 2040.  The experts at the meeting are concerned because “Some scenarios do not represent realistic system performance” and the total projected wind, solar, energy storage and “dispatchable emissions-free resources” capacity additions projected are on the order of double the total current capacity.   The 2021-2030 Comprehensive Reliability Plan report concludes “While there are hundreds of projects in the NYISO interconnection queue, there are none that would be capable of providing dispatchable emission-free resources that could perform on a multi-day period to maintain bulk power system reliability. Such resources are not yet widely commercially available.”   That resource alone is greater than the total existing capacity so there certainly are reliability concerns.

A couple of weeks ago I posted an article on my blog showing an egregious example of hiding the true costs of the Scoping Plan. While I was drafting an overview presentation on the Draft Scoping Plan for my state Senator, I took another look at information supporting the assertion that the “cost of inaction exceeds the cost of action by more than $90 billion”.  I realized my concerns with the cost projections could be more clearly explained using the figures in Draft Scoping Plan Appendix G: Integration Analysis Technical Supplement Section I (Appendix G).  This post is the result.

Benefits and Costs Summary

Appendix G Figure 51. Net Present Value of Benefits and Costs relative to Reference Case, Including GHG benefits, Health Benefits, and Net Direct Costs (2020 – 2050) on page 69 is the primary documentation for the assertion that the “cost of inaction exceeds the cost of action by more than $90 billion”.  Note that three scenarios are shown: “Strategic use of low carbon fuels”, “Accelerated transition away from combustion”, and “Beyond 85% Reductions”.  This net-zero program plans to reduce greenhouse gas emissions by 85% and then offset the remaining 15% to get to “net-zero”. The $90 billion number is the net benefit difference between the net system costs and the total benefits.  My first impression was that these numbers represented the total costs for New York State to meet the net-zero mandate.  I should have known better. 

Unpacking the title: the numbers are the “net present values”.  According to the Draft Scoping Plan the integration analysis included calculations for three cost metrics: net present value (NPV) of net direct costs, annual net direct costs, and system expenditures.  The Plan defines NPV of Net Direct Costs as the levelized costs in a given scenario incremental to the Reference Case from 2020 through 2050 using a discount rate of 3.6% and including incremental direct capital, investment, operating expenses, and fuel expenditures.  The annual Net Direct Costs are defined as the levelized costs in a given scenario incremental to the Reference Case for a single year snapshot and include incremental direct capital investment, operating expenses, and fuel expenditures.  I don’t have the background to comment on the impact of these definitions relative to the acceptability of the projections. 

System Expenditures

System Expenditures are defined as an estimate of absolute direct costs (not relative to the Reference Case) and do not reflect direct costs in some sectors that are represented with incremental costs only. Appendix G Figure 48, New Present Value of System Expenditures in Reference Case and Scenarios 2-4 (2020-2050) shown below describes these costs.   

An important aside: the Climate Act requires the Climate Action Council to “[e]valuate, using the best available economic models, emission estimation techniques and other scientific methods, the total potential costs and potential economic and non-economic benefits of the plan for reducing greenhouse gases, and make such evaluation publicly available” in the Scoping Plan.   This figure and the others included represent most of the cost documentation.  For example, the component costs in the reference case in this figure are not included in any supporting documentation.  There are spreadsheets that document other figures in the Draft Scoping Plan with the data tables used to generate the figures but I have been unable to find this information for any of the cost figures.  I submit that the Council has not fulfilled this requirement.

Figure 51 notes that the values listed are relative to the Reference Case.  Figure 48 is important because other than a text mention that the Reference Case is $2.7 trillion, it is the only documentation for Reference Case values.  It looks like the scenarios are all approximately $3 trillion consistent with the difference relative to the Reference Case ~$300 billion costs in Figure 51. 

In my recent article looking at this issue I described what was included in the Reference Case.  I searched the Draft Scoping Plan and the technical supplements for the phrase “Reference Case” for the analysis.  The best description of the Reference Case contents was in Appendix G, Section I on page 12 in a footnote for Figure 4: Gross Greenhouse Gas Emissions by Mitigation Scenario:

The Reference Case is used for evaluating incremental societal costs and benefits of GHG emissions mitigation. The Reference Case includes a business as usual forecast plus implemented policies, including but not limited to federal appliance standards, energy efficiency achieved by funded programs (Housing and Community Renewal, New York Power Authority, Department of Public Service, Long Island Power Authority, NYSERDA Clean Energy Fund), funded building electrification, national Corporate Average Fuel Economy standards, a statewide Zero-emission vehicle mandate, and a statewide Clean Energy Standard including technology carveouts.

If the documentation included a cost component breakdown that would enable readers to determine whether the reference case is a reasonable estimate of the costs without the Climate Act.  In my opinion many of those programs should not be in the Reference Case.  Looking at the bar chart the four biggest cost components are electricity, transportation investment, buildings investment and fossil liquids.  Note that the transportation investment (~700 billion) does not vary much between the four bars.  Keep that in mind.

Costs Relative to Reference Case

Appendix G Figure 47 lists the NPV of net direct costs relative to the reference case.  This illustrates what is meant by the net direct costs label.  In each of the mitigation scenarios there are avoided fossil fuel expenditures that are subtracted from the total costs of the implementation strategies to get the ~$300 billion net direct costs. 

Note that the transportation investments listed are no more than $30 billion for the scenario, Beyond 85%”, with the highest costs.  My original impression of Figure 51 was that it represented all the costs necessary for New York to get to net-zero.  Clearly $30 billion is nowhere near the cost to replace all the approximately 10 million vehicles in New York with electric vehicles that use batteries or fuel cells even if the cost differential was $3,000.  The total cost has to be higher to include the cost for personal electric charging stations or public electric chargers, at least. 

I think that the true cost to electrify New York transportation is shown in Figure 48.  The system expenditures listed suggest the transportation investment component cost is around $700 billion which makes more sense.  The justification to put those costs in the Reference case is a bit of semantic sleight of hand based on the footnote that says that the Reference Case includes a “business as usual forecast plus implemented policies”.  It is true that New York passed legislation setting a goal for all new passenger cars and trucks sold in New York State to be zero-emissions by 2035 in April 2021 so the Scoping Plan is consistent with the only explanation of the Reference Case components.

However, suggesting that this “implemented policy” should not be included in the Climate Act implementation costs is disingenuous. The press release announcing that the Governor signed the legislation states: “The actions announced today in advance of Climate Week 2021 support New York’s ambitious goal of reducing greenhouse gas emissions by 85 percent by 2050, as outlined in the Climate Leadership and Community Protection Act.”  It goes on to quote Governor Hochul: “New York is implementing the nation’s most aggressive plan to reduce the greenhouse gas emissions affecting our climate and to reach our ambitious goals, we must reduce emissions from the transportation sector, currently the largest source of the state’s climate pollution”.  I think that these statements pretty well represent any dispassionate observer’s belief that the only reason for the law is to support the Climate Act.  As such those are not legitimate Reference Cases costs.

Conclusion

The major concerns for any net-zero transition program should be the effects on reliability and affordability.  It is not in the best interests of society to implement a policy that does more harm than good.  Ultimately the underlying problem for the Texas Energy Debacle of February 2021 was poor reliability planning. As mentioned here, the rush to implement an energy policy that depends on a non-existent dispatchable emissions-free resources technology surely increases the possibility of a similar blackout in New York.  This post that the total costs for the New York energy system (2020-2050) are on the order of $3 trillion but that the costs attributable to the Climate Act are subject to interpretation. The affordability comparison of costs and benefits is strongly affected by that interpretation.

Appendix G Figure 51: Net Present Value of Benefits and Costs relative to Reference Case shows that costs relative to the Reference Case are on the order of $300 billion and that benefits are on the order of $400 billion to justify the claim that the “cost of inaction exceeds the cost of action by more than $90 billion”.  The Draft Scoping Plan claimed that vehicle electrification costs should be included in the Reference Case because the electric vehicle legislative mandate was an “implemented policy”.  However, the $700 billion costs to electrify the transportation investment component of Figure 48 system expenditures are a necessary cost for the net-zero transition and should not be included in the Reference Case.  Clearly those costs are a necessary transition expense.  If those costs are moved from the Reference Case to the mitigation scenarios where they belong, the costs are much greater than the benefits.

The Draft Scoping Plan was written to prove the desired conclusion that the benefits were greater than the costs.  In order to make that case both benefits and cost estimates have been perverted.  I have shown elsewhere that the benefits are uniformly exaggerated and the largest benefit is dependent upon an incorrect application of the social cost of carbon. The cost estimates are inadequately documented and, as shown here, a semantic trick was used to claim that the cost to de-carbonize transportation was claimed to be “business as usual” because the electric vehicle conversion legislation was already “implemented”.

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Roger Caiazza blogs on New York energy and environmental issues at Pragmatic Environmentalist of New York.  More details on the Climate Leadership & Community Protection Act are available here. This represents his opinion and not the opinion of any of his previous employers or any other company with which he has been associated.

Scoping Plan Renewable Energy Resource Availability Analysis

New York’s Climate Leadership and Community Protection Act (Climate Act) has a legal mandate for New York State greenhouse gas emissions to meet the ambitious net-zero goal by 2050. The Climate Action Council is responsible for preparing the Scoping Plan that will “achieve the State’s bold clean energy and climate agenda”.  This post describes comments I submitted to the Council about the inadequate analyses of renewable energy resources in New York.  It is important to get this right because the availability of renewable energy resources informs the basis of resource adequacy planning.

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

Climate Act Background

The Climate Act establishes a “Net Zero” target by 2050. The Climate Act requires the Climate Action Council to “[e]valuate, using the best available economic models, emission estimation techniques and other scientific methods, the total potential costs and potential economic and non-economic benefits of the plan for reducing greenhouse gases, and make such evaluation publicly available” in the Scoping Plan.  The integration analysis developed by the New York State Energy Research and Development Authority (NYSERDA) and its consultants was used to develop the Draft Scoping Plan that was released for public comment on December 30, 2021. The Scoping Plan has to be finalized by the end of 2022 and a recent meeting discussed issues that need to be addressed to meet that schedule.

New York’s unprecedented transition to a zero-emission electric generating system means that the system will be heavily dependent upon wind and solar resources.   Because those resources are intermittent it is imperative that New York energy planning determine the frequency and duration of periods when wind and solar resources are low.  This article summarizes comments that I submitted on the problem, describes analyses that address this issue completed elsewhere, and recommends that New York agencies develop an appropriate study centered on New York.

Problem

The comments included a description of New York blackouts and the responses made to prevent reoccurrences.  I believe that, despite the best efforts of those responsible for the reliability of the electric grid, the transition to an electric power system that relies on intermittent wind and solar resources introduces so many changes that it will be impossible to anticipate them all.  As a result, grid resilience will decrease and blackouts are inevitable.   For example, consider that a team of researchers from the University of Nottingham recently addressed the effect of renewable energy resources on power grid stability.  The abstract from the paper states:

Contemporary proliferation of renewable power generation is causing an overhaul in the topology, composition, and dynamics of electrical grids. These low-output, intermittent generators are widely distributed throughout the grid, including at the household level. It is critical for the function of modern power infrastructure to understand how this increasingly distributed layout affects network stability and resilience. This paper uses dynamical models, household power consumption, and photovoltaic generation data to show how these characteristics vary with the level of distribution. It is shown that resilience exhibits daily oscillations as the grid’s effective structure and the power demand fluctuate. This can lead to a substantial decrease in grid resilience, explained by periods of highly clustered generator output. Moreover, the addition of batteries, while enabling consumer self-sufficiency, fails to ameliorate these problems. The methodology identifies a grid’s susceptibility to disruption resulting from its network structure and modes of operation.

My comments included a description of the Texas blackout of February 2021.  Ultimately the reason for the blackout was poor planning.  When the people of Texas needed electric power the most the generating resources available were unable to meet those needs.  In order to prevent the same thing from happening in New York it is necessary to provide sufficient energy at all times.

Reliability planning in the past relied on dispatchable generating resources.  The Climate Act future electric generating system will rely on intermittent renewable wind and solar that is not dispatchable.  Energy storage resources are needed to cover periods when wind and sun energy is not available to provide dispatchable electricity.  The problem is that we have to know what the worst-case renewable resource availability is in order to size the energy storage resources correctly.

Last year I described issues related to this as the Climate Act’s ultimate problem. Although there have been analyses that have identified winter wind lull periods are a problem, I do not believe that they addressed this analysis correctly because they used relative short periods as the basis for their projections.  As far as I can tell the Integration Analysis did not even consider the same period for wind and solar resources in their analysis.  As a result, I believe the Draft Scoping Plan projections for the amount of resources during these periods is incorrect.

Proposed Analysis

In order to do this right, the critical consideration is the frequency, duration, and severity of periods when wind and solar resources are in “droughts” or low resource availability.  I described several recent applicable papers that estimate the frequency and duration of periods with those conditions using a meteorological reanalysis data base.  In this approach historical observations are re-analyzed using current weather forecast models.  The first step in developing a weather forecast is to incorporate meteorological observations to setup the weather maps that are the starting point for weather forecast calculations.  That component of the models is used to develop weather maps for the observations and the forecast component is used to provide hourly data until the net observation period.

In order to provide a robust estimate of the wind and solar availability during worst case conditions it is necessary to analyze as long a time period of historical meteorological data as possible. The ERA5 global reanalysis data base generated using this reanalysis technique provides hourly estimates of a large number of atmospheric, land and oceanic climate variables. The data cover the Earth on a 30km grid and resolve the atmosphere using 137 levels from the surface up to a height of 80km. That information is then used to estimate the availability of hourly wind and solar resources for any area of the globe.

Last fall I described a paper that included an approach that might work for an analysis centered on New York.  Since then, I have been in touch with the author and I am not confident that using these data would be provide invaluable information. 

In my comments I strongly recommended an analysis in New York using the complete (1950 to present) ERA5 meteorological database to determine the frequency and duration of renewable resource droughts in order to estimate the appropriate worst case.  The goal of the project would be three-fold:

  • Determine historical intensity, frequency, duration and seasonality of wind and solar droughts in New York;
  • Identify co-occurrence of wind and solar droughts with high demand periods (heating/cooling degree days); and
  • Interpret the droughts and high demand periods: seasonal, weather regimes, interannual variability (e.g. El Niño-Southern Oscillation), multi-decadal climate regimes, and trend associated with global warming

Conclusion

I have submitted comments in various proceedings and have tried to work behind the scenes to get this analysis completed because I don’t think it is possible to adequately project the renewable resources necessary to keep the lights on when needed most without this information.  I submitted these comments to get on the record again that this work has to be done to ensure that sufficient renewable energy generation and energy storage is developed to prevent blackouts.

Air Permit Applications and the Climate Act

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

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

Climate Act Background

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

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

My Comments

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

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

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

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

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

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

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

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

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

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

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

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

Replacement Permit Applications

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

Conclusion

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

The Real Cost of the Climate Act

On February 16, 2022 New Yorkers for Affordable Energy hosted a Zoom webinar titled The Real Cost of New York’s Climate Leadership and Community Protection Act.  The sponsor said to “feel free to share this with anyone you think would enjoy it” so this post describes the webinar.

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

Climate Act Background

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

The The Real Cost of New York’s Climate Leadership and Community Protection Act webinar was organized by New Yorkers for Affordable Energy, “a coalition of community, labor, business and industry leaders from across the state who support greater access to clean, reliable and affordable sources of energy for residential and business consumers.”  They understand that reliability and affordability are at risk due to the Climate Act and are starting to get the word out to consumers who have no idea what is involved with the state’s plan to do “something” about climate change. There is a recording of the Zoom meeting but this article will focus on presentations made by six speakers.

New Yorkers for Affordable Energy

Michelle Hook, the Executive Director of New Yorkers for Affordable Energy (NYAE) gave the first presentation.  The mission for NYAE is “to educate New Yorkers about the impacts of New York energy policy on their personal livelihood and advocate for a pragmatic and balanced approach to our state’s energy decisions”.  She explained that there are active bills that could have major impacts:

  • S.8008/A.9008 Budget Bill TED, Part EEE and S.6841 (Kavanaugh) A.8431 (Gallagher) – “All Electric Buildings Act”
    • Both bills prohibit any new construction that is not all electric.
  • S.8198 (Krueger) – Statewide Natural Gas Transition Plan
    • Requires the PSC to develop a statewide gas transition plan that decreases gas sales and decommissions natural gas systems
  • S.5939-A (Ramos)/A.6761-A (Mamdani) – “Clean Futures Act”
    • Prohibits the development of any new major electric generating facilities that would be powered in whole or part by any fossil fuels.

She also brought up the issue of aging power plants and the potential impact to reliability.

New York Independent Power Producers

Gavin Donohue, the President and CEO of the New York Independent Power Producers is also a member of the Climate Action Council.  He explained that of the 22 members of the Council only two appointees are from the traditional energy sector, him and Donna DeCarolis of National Fuel Gas Distribution Company His presentation outlined the requirements of the Climate Act.  I will reproduce much of his material and, in the rest of the article, highlight differences between his take and the other presentations.

He listed the following recommendations from the Draft Scoping Plan:

  • Moratoriums on new gas infrastructure (NOT a Council-wide recommendation)
  •  No new natural gas service to existing buildings
  •  Prohibit propane, natural gas and oil equipment in new homes in 2024
  •  Prohibit traditional heating systems in existing homes in 2030
  •  Ban use of natural gas appliances (dryers, stoves, etc.) in homes in 2030
  •  No gasoline vehicles sold in New York in 2035

Donohue described the following gaps and challenges:

  • Gas and oil resources currently make up more than two-thirds of the energy downstate and one-third statewide overall
  • New York’s grid operator (NYISO) says quick-start power options are essential
  •  State power reserves are thin (no wiggle room for very hot/cold days or broken units)
    • NYSERDA says electrification and electric vehicles increases electric demand 65 to 80%
  • No consensus on what qualifies as Zero-Emission Dispatchable Technologies for 2030 and beyond
  • Increased electrification results in electric consumption doubling by 2050
    • Approximately 1 to 2 million homes will need to be electrified with heat pumps by 2030
  • Approximately 3 million zero-emission vehicles will need to be sold by 2030
  • Necessary to create emission-reducing or eliminating technologies like carbon capture, hydrogen fuel cells, offshore wind and battery storage
  • Redefining/retraining state labor force
  • Diversion of organic waste from landfills
  • Management of manure and animal feeding practices

Donohue presented a list of Draft Scoping Plan positives:

  • No recommendation to ban wood burning
  • Acknowledges need for nuclear facilities through 2029
  • Low-carbon fuels such as bioenergy or green hydrogen have a role
  • Investments in development of zero emitting resources
  • Includes carbon pricing as an option

Then he followed up with what he thought was the biggest issue: How much will this cost?

  • No comprehensive cost analysis on how to pay for any of the recommendations:
    • Geothermal/heat pumps
    • Electric vehicles
    • Home appliances
    • Grid electrification
    • Expansion transmission, renewables and energy storage

I agree with most of the points raised by Donohue and all the gaps and challenges points raised.  I suppose it is unreasonable to expect that a member of the Climate Action Council could question the value of the law itself.  However, New York’s share of global GHG emissions is less than a half a percent of total emissions and, on average, over the last three decades the annual increase in GHG emissions is more than half a percent, so any reductions made in New York will be replaced by global emission increases in a year. As a result, I think that any presentation on the Climate Act should ask the question “What is the point”.   I agree that costs are the biggest issue. I would add that the Draft Scoping Plan does not document any of the costs provided so not only isn’t there an analysis on how to pay, but there isn’t satisfactory documentation supporting what it might cost.

National Fuel Gas

National Fuel Gas is a “diversified, integrated energy company with a complementary mix of natural gas assets located in the heart of the prolific Appalachian basin” that serves customers in western New York Donna DeCarolis is President and also a member of the Climate Action Council. Her presentation emphasized the need to balance the goals and objectives of the Climate Act with consumer impacts. 

Her list of items in the Draft Scoping Plan is the same as Donohue’s. 

The presentation by DeCarolis includes the following slide pointing out all the items that are not included in the natural gas system transition.  Clearly National Fuel Gas is in a fight for its existence so their plan is to support the New York narrative that a transition to low and no-carbon is necessary.  From what I have seen there isn’t enough renewable natural gas to make much of a difference and problems with metal embrittlement with hydrogen will prevent the use of the existing natural gas system for its use.

Her list of what is missing in the Draft Scoping Plan includes the following:

  • Existing “electric-based clean energy technologies” can’t meet forecasted demand & maintain reliability
  • Unprecedented level of NEW renewable energy generation development in next 8 years.
    • 26% current   
    • 70% required
  • NYISO published its concern about declining levels of reliability beginning as early as 2023
  • Measures will likely increase consumer cost for potentially less reliability
  • Full assessment of affordability
  • Recognition of upstate and downstate differences
    • Plan will be more burdensome for western New York residents
      • Weather is 56% colder
      • 94% of energy used on the coldest WNY winter day is natural gas
      • Older, larger Upstate housing stock
      • Burden falls hardest on Upstate residents – Downstate produces more emissions

National Fuel Gas proposes an “all-of-the-above” pathway based on three building blocks:

  • Widespread energy efficiency that emphasizes weatherization
  • Dual-energy heating and cooling systems
  • Use of the existing natural gas infrastructure to incorporate low carbon fuels

The presentation expands on these points and DeCarolis argued that it is possible to meet the goals of the Climate Act.  Given that anyone who “questions” the value of reducing GHG emissions will be labeled a “denier”, National Fuel Gas has decided not to argue much about the futility of the Climate Act having an effect on global warming so they are presenting their plan as a more viable option to get the same result.

Empire Center

The Empire Center for Public Policy is an independent, non-partisan, non-profit think tank based in Albany, New York.  Their mission is “to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.”  

Senior Policy Analyst James E. Hanley gave a presentation that did not have pull its punches because of vested interests within the organization.  He argued that utility customers expect electricity when and where needed at all times.   However, the drive for electrification will increase electricity demand by 65% to 80% at the same time New York policy is shutting traditional sources of electricity.  As a result, adequacy margins are already shrinking.  Donohue’s presentation claimed that electricity demand would double and I believe he is correct.

Hanley pointed out that the Climate Act forces an unprecedented shift to variable renewable resources.  The Draft Scoping Plan projects that in addition to a massive buildout of wind and solar that dispatchable emissions-free resources are needed for reliability.  He explains that the Plan suggests advanced fuels such as green hydrogen and renewable natural gas might fill the reliability gap: ”if scalability, feasibility, and environmental impact and air quality issues can be addressed.”  The biggest problem is that it is not known if any advanced technology will be deployable at scale and how much it will cost by 2040 when fossil fuels are banned from the New York grid.  He also argues that energy storage on the necessary scale is “science fiction”.  He concludes that “nuclear closures, non-permitting of new sources, and aging and closure of existing fossil-fuel sources could mean NY inadvertently “sleepwalks” into an era of energy unreliability”.  These points all imply that the Climate Act targets and schedule are not likely to be achieved so Council members Donohue and DeCarolis steered clear of these arguments.  I personally think that Hanley’s feasibility assessment is optimistic.

New York Business Council

Ken Pokalsky, Vice President of the NY Business Council, also gave a presentation.  The Business Council is the “voice of business and employers in New York State Representing 3,500 business of all sizes, in all sectors Including nearly 100 local chambers and business groups”.  He referenced a summary of the Draft Scoping Plan that he prepared and made the point that feedback during the public comment process is essential. 

Pokalsky described how the Draft Scoping Plan handles the industrial, transportation, buildings, and waste management sectors.  He described key considerations for business:

  • Most businesses will feel multiple impacts
  • Limited focus on direct costs, opportunity costs, return on investments
    • Risk for emission and economic leakage is real
  • The legislature wants to act now!
    • S.4264-A (Parker)/A.6967 (Cahill) – “Climate and Community Protection Act”
    • S 6843-A  (Kavanagh)/A.8431 (Gallagher) – Electric building mandate
    • S.8198 (Krueger) – Mandated restructuring of electric and gas utilities
    • Others and more to come . . .
  • You need to be engaged!!

For the most part his arguments were consistent with Donohue.

United Association

John Murphy is the International Representative for New York State, United Association Plumbers & Pipefitters and was a member of the Environmental Justice and Just Transition Working Group. (I am not sure if this was one of the Climate Act working groups.) His presentation argued that the costs of the Climate Act will be astronomical if not done right. 

Murphy argued that high utility bills, escalating consumer prices and massive job losses are likely and that the poor and energy workers will be hit the hardest.  As an example, he pointed out the Department of Environmental Conservation’s permit denials for a couple of natural gas generating plants will eliminate over 1,000 jobs and two sources of clean and reliable power.  This is just the tip of the iceberg because the Climate Act will phase out 66 natural gas plants and 3 nuclear plants which will “eliminate tens of thousand of good middle-class jobs”.  He argued that an all-of-the-above approach is the sensible solution.  He concluded that “following the narrow path of renewables only will drive high costs, result in widespread outages & massive job losses”, but that the all-of-the-above strategy can ensure adequate and reliable power, generate tens of thousands of good jobs and provide a big part of carbon-free power.

The Draft Scoping Plan argues that Climate Act implementation will create job growth and some unions have bought into that argument.  Murphy’s presentation points out that there will be significant job losses too.  However, he also supports the idea that we have to act using a strategy that includes nuclear and natural gas.  I agree that if you want to keep the lights on that is absolutely necessary.

Conclusion

The webinar offered good summaries of issues and alternative solutions for New York’s energy future.  It is notable that the vested interests and corporate business plans of most of the organizations represented influence their recommendations for the Climate Act.  Only Hanley from the Empire Center emphasized the point that technical feasibility of wind, solar, and energy storage should be a primary concern.  The Business Council did not address feasibility.  The IPPNY, National Fuel Gas, and United Association presentations all suggested that renewable energy issues could be addressed by an all-of-the-above strategy. I think the risks and costs of an electric system that relies mostly on wind, solar, and energy storage out-weigh the benefits of this unprecedented transition.

One of the major themes of the webinar was that New Yorkers must get educated and involved if they want to have an affordable and reliable energy system in the future.  In my opinion that boils down to preventing passage of the proposed legislation described in the presentations.  I encourage all New York residents to contact your legislators and tell them that you are not willing to give up natural gas.

Nuclear New York Comments on Proposed Tier 4 Contracts of NYSERDA

Last December I posted an article that compared residential cost impacts of the recently announced New York State Energy Research and Development Authority (NYSERDA) contracts with Clean Path New York LLC for its Clean Path NY (CPNY) project and H.Q. Energy Services (U.S.) Inc. (HQUS) for its Champlain Hudson Power Express (CHPE) with the energy needed as part of the Scoping Plan.  I was recently contacted by Dietmar Detering from Nuclear New York who called my attention to the comments that they submitted to the Department of Public Service on those contracts.  This post reproduces their comments and describes their context relative to the Climate Leadership and Community Protection Act (Climate Act). I have written extensively on implementation of the Climate Act because I believe the ambitions for a zero-emissions economy outstrip available renewable technology such that it will adversely affect reliability and affordability, risk safety, affect lifestyles, will have worse impacts on the environment than the purported effects of climate change in New York, and cannot measurably affect global warming when implemented.   The opinions expressed in this post do not reflect the position of any of my previous employers or any other company I have been associated with, these comments are mine alone.

Background

The Climate Action Council is responsible for preparing the Scoping Plan that will “achieve the State’s bold clean energy and climate agenda”.  The Climate Act requires the Climate Action Council to “[e]valuate, using the best available economic models, emission estimation techniques and other scientific methods, the total potential costs and potential economic and non-economic benefits of the plan for reducing greenhouse gases, and make such evaluation publicly available” in the Scoping Plan. Starting in the fall of 2020 seven advisory panels developed recommended strategies to meet the targets that were presented to the Climate Action Council in the spring of 2021.  Those recommendations were translated into specific policy options in an integration analysis by the New York State Energy Research and Development Authority (NYSERDA) and its consultants.  The integration analysis was used to develop the Draft Scoping Plan that was released for public comment on December 30, 2021. The NYSERDA contracts described here are one component of Climate Act implementation.

Tier 4

I described this effort in a previous post.  According to the NYSERDA Tier 4 webpage:

The Public Service Commission’s October 15, 2020 Order [PDF]establishes a new Tier 4 within the Clean Energy Standard (CES) in response to NYSERDA’s CES White Paper. The new Tier 4 will increase the penetration of renewable energy into New York City (NYISO Zone J), which is particularly dependent on polluting fossil fuel-fired generation. NYSERDA’s CES White Paper found that without displacing a substantial portion of the fossil fuel-fired generation that New York City currently relies upon, the statewide 70 by 30 Target would be difficult to achieve. Through Tier 4, the State will procure the unbundled environmental attributes (in the form of Tier 4 RECs) associated with renewable generation delivered into Zone J. These environmental attributes include the avoidance of GHG emissions, as well as the avoidance of local pollutants such as NOx, SOx, and fine particulate matter.

On November 30, 2021 New York Governor Kathy Hochul announced that finalized contracts for two projects to meet this solicitation had been awarded.  In order to complete this process NYSERDA and the Department of Public Service (DPS) submitted “a petition for approval this Petition and two contracts for renewable energy credits (RECs) entered into under Tier 4 of the Clean Energy Standard (CES)”.  These documents are available on the DPS website for this matter.  For the reader’s information and because trying to access the DPS website is a challenge I have posted the petition, press release, cost analysis, and the contracts on this website.  According to the petition:

Tier 4 was established by the Public Service Commission (Commission) in October 2020 to overcome the challenge of New York City’s reliance on fossil fuels and to help accelerate achievement of New York’s target of 70% renewable energy by 2030. To this end, the Commission instructed NYSERDA to proceed with a Tier 4 solicitation that will increase the penetration of renewable energy into New York City (Zone J). NYSERDA issued its solicitation in January 2021 and received a highly competitive response with seven projects submitting proposals.

Following a robust and comprehensive evaluation process, which considered bid prices, viability and economic benefits, in September of 2021, the selection of two projects was announced: (1) the Clean Path New York (CPNY) project; and (2) the Champlain Hudson Power Express (CHPE) project. Contract negotiations have now concluded, and in accordance with the Commission’s instructions, NYSERDA and Staff are submitting the signed contracts for the Commission’s consideration and approval. The selected projects are expected to deliver 18 million megawatt-hours of renewable energy per year to Zone J, more than a third of New York City’s annual electric consumption, from a diverse generation portfolio including onshore wind, solar and hydroelectric power from Upstate New York and Québec.

The bid evaluation document describes the two projects.  The CPNY proposal has three main components:

    • New Tier 4 renewable generation to be built in New York (CPNY Resources), located largely upstate,
    • A new 1,300 MW HVDC controllable link from upstate to New York City, and
    • The use of the New York Power Authority owned Blenheim Gilboa pump storage facility to store energy produced by the CPNY resources that is generated in excess of the Tier 4 transmission capacity.

The CHPE project is an underground transmission line from Quebec to New York City that will deliver 1,250 MW of hydro generation from Hydro Quebec.  Both projects terminate in New York City so that it can be considered “in-city” generation.

Nuclear New York Comments

Last November the DPS submitted “a petition for approval this Petition and two contracts for renewable energy credits” and asked for public input.  Nuclear New York submitted a comment on 2/14/22.  They were “formed in response to the travesty of shutting down Indian Point” and support long-term investments in zero-emission infrastructure.  The comments note that: “Most importantly, the contracts will provide system benefits and emission avoidance for much longer than the thirteen years used to calculate them (2028–2040), an aspect overlooked by some commenters.”  I reproduce the following nine points made in their comment letter below with my italicized and indented comments.

  1. CPNY gets to use NY Power Authority’s Blenheim-Gilboa pumped storage facility presumably free of charge. The estimated dollar price of this unique facility would be about $2 billion should New York build it today. In reality, Blenheim-Gilboa is priceless: New York will most likely be unable to build another like it. Yet, there is barely any mention of this gift by the people of New York in the Tier 4 Bid Evaluation, making the comparison with CHPE, which gets no such gift, unfair. Without Blenheim-Gilboa, CPNY’s intermittent generation would be much less valuable to NYC and the proposed transmission line much too undersized. The connection would either sit idle when variable renewables are not generating or simply transmit electricity from fossil combustion to NYC most of the time.

In my Tier 4 article I pointed out that the CPNY capacity factor for the new Tier 4 renewable generation is so high because the project plan uses the Blenheim Gilboa pump storage facility.  However, Blenheim Gilboa was built in 1973.  It has been in daily use storing energy when prices are low and producing energy when prices are high.  It does not represent anything new even if the plan is to use it differently.  As pointed out in the Nuclear New York comments this is just a shell game. 

 2. The annual bid quantity for CHPE is higher than that of CPNY, which is also reflected in the higher costs and system value of CHPE over CPNY. However, NYSERDA expects cumulative carbon abatements of 49 million metric tons by CPNY but only 37 million metric tons by CHPE over the 13 years under evaluation. Per kWh, this translates to 479 grams of carbon avoided by CPNY, and only 274 grams per kWh avoided by CHPE. It is slightly worse in NYSERDA’s Benefit Cost tables: $50 per MWh in Carbon Value delivered by CPNY, but only $27 for CHPE. Even more extreme is the valuation for air quality improvements, where CPNY scores $27 per MWh vs. CHPE’s disappointing $12. If there is a clear explanation for this somewhere, we haven’t seen it.

The proposal treats CPNY as an entirely new sources of carbon abatement but that is not the case.

 3. If anything, the Carbon Benefits that NYSERDA calculated for CPNY should be lower than those of CHPE given that most of CPNY’s wind and solar projects are already planned and, so far, tallied as so-called Tier 1 Renewable Energy Credit (REC) projects. Little is being won with CPNY since it is difficult to add additional Tier 1 projects upstate due to the ever growing number of transmission-constrained “pockets”. These pockets can host the same projects either for Tier 1 or Tier 4, but to benefit from both credit schemes requires additional transmission investments, ignored in NYSERDA’s Bid Evaluation analysis.

Nuclear New York makes the point that it is even worse than I claimed because the State already took credit for the Tier 1 renewable energy projects.

  1. NYSERDA and the PSC need to examine how extreme weather may impact New York’s expected energy imports. In the payment formula, both projects get the promised Strike Price “minus the simple (not load-weighted) average of Zone J’s marginal price” for each MWh delivered during that month. This is treating both CPNY and CHPE like baseload power sources but without actually getting baseload service. Quebec and NYC often experience the same weather. Consequently, CHPE will deliver electricity during low or moderate demand periods. But Hydro Quebec will keep all power at home during grim winter weeks, such as on January 22 of this year: Exports to ISO-NE (the New England grid) were reduced to the contracted minimum, and, instead of exporting power to New York, Quebec needed to import power from New York. On really cold days in the Northeast, NYC will get no power via CHPE and will again rely on fossil-fueled “peaker plants”. Yes, CHPE and CPNY will get paid little for their electricity in the wholesale market if they fail to serve NYC in times of most desperate need. However, New Yorkers are still going to pay plenty for the RECs generated during “nice weather” hours.

This is a very important point.  The Climate Action Council is supposed to develop the Scoping Plan that will direct the future Energy Plan.  Reliability is a crucial requirement for the Energy Plan but I have not seen any indication in the Draft Scoping Plan or during deliberations of the Council that they understand the primary problem with providing electricity when it is needed most is during peak load periods.  The future New York electric grid is going to peak in the winter and the really cold days issue is a big problem.  If Hydro Quebec “keeps all power at home during grim winter weeks” this resource will be worthless when needed most.

 5. While CPNY cannot make any enforceable guarantees as to when they are able to deliver their weather-dependent power, CHPE could. However, the only assurances that the CHPE contract provides is a vague Minimum Delivery Requirement, calculated over the six months of “Winter” or “Summer”. This incentive structure does nothing to guarantee New Yorkers access to hydropower at times when it is needed most to balance intermittent wind- and solar-based generation and to protect against deadly power shortages, such as seen during the Texas Freeze of 2021. Therefore, neither project will help displace the need for fossil-fuel-based backup power plants.

I have long believed that one of the hidden problems with the Climate Act transition to zero emissions by 2040 is that market mechanisms have to be developed that will provide the services needed when needed.  This example supports my concern that serious problems are inevitable.

 6. Both contracts sound strong in Sections 4.03/4.04: NYSERDA is going to pay nothing for RECs created during hours in which the marginal price of electricity in NYC is zero or negative. However, this provision expires after the first 200 such hours in a year – a mere 2.3% of the time. However, over the lifespan of the contracts, NYSERDA is planning to connect not 9,000 MW, but possibly 19,000 MW of offshore wind power to NYC and Long Island. Often, these facilities will produce no electricity at all, but when the wind blows NYSERDA is obligated to accept all the generated power or pay for curtailment. Given federal production tax credits, this will force NYC wholesale electricity prices into negative values, perhaps for thousands of hours every year. The contracts’ pricing formula, however, forces NYSERDA to compensate CHPE and CPNY for these depressed prices, irrespective of whether NYC needs their output or not.

The Nuclear New York comments provide another example where the contract language is not going to be in the best interests of New York ratepayers.  In this instance it appears that costs will be higher than would be expected in an ideal system.  I am confident that the Draft Scoping Plan Integration Analysis does not include curtailment costs as part of the total costs of implementing the Climate Act.

  1. NYSERDA and others expect New York’s peak electricity load to move to Winter as heat pumps replace gas boilers for space heating. Thus, capacity market prices will be much higher in Winter than in Summer. The REC pricing formula for both contracts subtract the capacity value of each project from the respective strike price. However, for the CHPE contract, this adjustment only happens in the six months of “Summer”. For the “Winter Capability Period”, this adjustment is set to zero and New Yorkers are “paying” CHPE, via the unadjusted strike price, for capacity that CHPE is not guaranteeing. Adding insult to injury, all the careful clauses of the contract, for “Loss Factor”, “Unavailability Factor”, and “Mitigation Factor” are being multiplied by the same “zero capacity” factor in Winter, when they should matter most.

One of the problems with Climate Act implementation is that there is no master plan.  We know peak load planning is important and we know that the winter peak will be the future issue. Is it in the best interests of New York to support a solar project on the Tug Hill downwind of Lake Ontario where 300” of snow per year are common when we know we cannot rely on energy from there when it is needed most?  This example in the comments reveals an astounding disconnect between future needs and the contracted resources from CHPE. 

 8. NYSERDA calculates the “Carbon Benefit” using the globally-suffered Social Costs of Carbon as calculated by the New York State Department of Environmental Conservation. However, this value has been calculated using a 2% discount rate, whereas everything else in NYSERDA’s Bid Evaluation is using a discount rate of 3.68%. NYSERDA is mixing apples and oranges, and no one seems bothered. In partial acknowledgement, NYSERDA is offering a “low carbon value scenario”, employing a social cost of carbon calculated at a 3% discount rate. But this is still a HIGH carbon value scenario in the context of this analysis. The only Carbon Benefit we should be looking at would be one based on the same discount rate used elsewhere in the analysis, 3.68%, yet NYSERDA denies us this clarity.

I have previously shown that NYSERDA’s carbon benefit calculations are biased, incorrect, and inconsistent with other jurisdictions.  These comments show that they are also inconsistent with other state policies.  There is no question in my mind that NYSERDA knows full well that they are running a con game with this metric in a desperate attempt to claim the transition benefits will out-weigh the costs.

  1. Sadly, the benefits of both projects combined already show a diminishing rate of return. With relatively cheap Quebecoise hydropower tapped out, and priceless Blenheim-Gilboa pumped hydro power given away for free, how is NYSERDA planning to sell New Yorkers on the next Tier 4 projects, which will be more expensive and offer smaller benefits?

This is an excellent point.  The comments correctly point out that the best chances for substantial renewable resources have been used.  Moreover, existing renewable resource developments are likely sited in the best locations so any future developments will also be more expensive and have smaller benefits. 

Cost Estimates

My previous post on this topic looked at costs.  The petition includes the following cost estimates:

The costs of program payments for the purchase of Tier 4 RECs from the projects are projected as $5.9 – $11.6 billion, equating to an estimated increase in customer electric bills of 2.1 – 4.1% (or $2.08 – $4.08 per month for the average residential customer) on average across the State for the 25-year period of the Tier 4 contracts. The range of these projections reflects future uncertainties including energy and capacity prices and includes the benefits to ratepayers from the expected purchase of Tier 4 RECs by the City, which reduces the ratepayer impact by $0.8-$1.7 billion. Additional cost reductions could occur as a result of federal transmission tax credits, which could reduce the remaining costs of Tier 4 to ratepayers to 1.8 – 3.8%. Voluntary purchase of Tier 4 RECs by New York City organizations with interest in switching to renewable energy could reduce ratepayer impact even further.

Keep in mind that these comments point out that CHPE won’t necessarily provide power to NYC when needed the most in the winter, that the costs listed here do not incorporate curtailment costs, and that the CPNY does not represent a significant addition to renewable resources because it is mostly a re-packaging of the priceless Blenheim-Gilboa hydro pumped storage assets.  Throw in irregularities in the cost calculations and these comments should be considered in the petition process. 

Conclusion

Clearly the utter hypocrisy of claiming that there is an existential threat due to climate change but shutting down 2,000 MW of emissions-free dispatchable generating capacity is a major flaw in the Climate Act.  The Nuclear New York comments are completely consistent with my concerns about the viability of a New York zero-emissions electric system without using nuclear energy.  The comments point out numerous issues related to contracts associated with one of many future contracts necessary to implement the Climate Act.  This does not portend well for the transition.  The comments also reinforce my concern that the hurdles for the transition are not limited to technological constraints and costs.  If the market mechanisms and contracts don’t deliver what is needed, then New York ratepayers will be left holding the bag.