EPRI Electrification Scenarios for New York’s Energy Future

In the summer of 2019 Governor Cuomo and the New York State Legislature passed the Climate Leadership and Community Protection Act (CLCPA) which was described as the most ambitious and comprehensive climate and clean energy legislation in the country when Cuomo signed the legislation. The Electric Power Research Institute (EPRI) recently released an “assessment of the potential role of electric technologies to meet energy needs and resulting impacts on end-use energy efficiency, electricity supply, and economy-wide emissions through 2050” for New York.  This post looks at the results of this analysis relative to the CLCPA and is another in a series of posts on this legislation.

I am following the implementation of the CLCPA closely because its implementation affects my future as a New Yorker, specifically can I afford to continue to live here in retirement.  Given the results for other jurisdictions that have implemented renewable energy resources at far lower levels, I am convinced that the costs will be enormous and my analyses have supported that concern.  The opinions expressed in this post do not reflect the position of any of my previous employers or any other company I have been associated with, these comments are mine alone.

Background

The politicians who passed the CLCPA mandated a reduction of New York’s GHG emissions to 60 percent of 1990 emissions levels in 2030 and that emissions from electricity production would be zero by 2040.  However, they just assumed that their targets could be met and only mandated that two years of the effective date of the legislation the climate action council would prepare and approve a scoping plan outlining the recommendations for attaining the statewide greenhouse gas emissions limits in accordance with the schedule.  In other words, this is a classic cart before the horse legislation example.

In the absence of a state plan I welcome any analysis of New York’s future energy system so I was happy to see this document.  The Executive Summary describes the report and notes the important caveat that it does not address the CLCPA requirements:

The analysis finds that electrification outcomes in New York, including the extent and timing of adoption, infrastructure and investment needs, and associated economy-wide emission reductions, will vary depending on a range of policy, economic, and technology factors. This study was conducted before the enactment of the state’s Climate Leadership and Community Protection Act and does not make policy recommendations or identify specific pathways to achieving the state’s greenhouse gas (GHG) targets. Instead, it illustrates that a portfolio of electric technologies could play a significant role in reaching the state’s energy goals. Furthermore, this initial assessment helps identify the areas in which legislators, regulators, utilities, grid operators, customers, and other stakeholders can work together on the next chapter of New York’s clean energy future.

Study Summary

The report describes the study methodology, assumptions, and limitations first.  Then it describes how NYS consumers use energy today. The study examines the evolution of electric technology adoption and the impact on the NYS energy system for four scenarios using EPRI’s NY-REGEN energy-economy

model.  The fourth section provides “an in-depth look at a variety of electric technologies, analyzes consumer costs and use cases, and identifies areas in which customer outreach and education may be needed in the future” .This approach is straight-forward and consistent with what anyone who is trying to project what may happen in the future would do.  There is one caveat I will mention though.  The NY-REGEN energy-economy model is simply a fancy packaging of what the model developers think will happen so it is only as good as the input assumptions.

For this type of analysis, the results have to be considered relatively.  Four scenarios were analyzed.

      1. The Baseline scenario reflects moderate improvement in technology costs and performance based on anticipated trends and EPRI research, and the attainment of pre-2019 NYS clean energy targets. Assumptions of economic growth, fuel prices, and service demand are drawn from the U.S. Energy Information Administration.
      2. The Carbon Price scenario maintains Baseline assumptions on technology improvements and cost decline. Under these conditions it explores the impact of hypothetical economy-wide carbon policy in which carbon dioxide (CO2) is illustratively valued at $50/ton CO2 starting in 20202 and escalating to $216/ ton CO2 in 2050.
      3. The Mandates scenario explores the impact of possible regulatory interventions for electric end uses and additional energy efficiency. The policies this scenario examines would require electric technologies for all installations of building heating equipment and new vehicle purchases in 2030 onwards. In addition to the Baseline assumptions, heating equipment performance improvements are accelerated by 15 years, but cold-weather breakthroughs are not assumed.
      4. The Transformation scenario combines the above Mandates with a hypothetical economy-wide carbon price of CO2 illustratively valued at $100/ton CO2 beginning in 2020 (escalating to $432/ton CO2 in 2050) with elements of the expanded clean energy targets in the state’s Climate Leadership and Community Protection Act.

Findings Summary

The report lists the following key findings with my italicized clarification comments

The results of this study are based on a suite of detailed assumptions and should be interpreted as directional in nature, helping to frame priorities for further study as New York State advances its energy goals. As noted previously the study developed a scenario for a baseline and then did three possible scenarios for the future.  Results should be considered by comparing the baseline results to the results of each of the scenarios.

      • The NYS energy system has large potential for electrification, which, in conjunction with low-carbon electricity, can achieve substantial CO2 reductions. Electricity’s role in the state economy will continue to grow over the next 30 years—the pace and extent of that growth will depend on policy decisions, technology improvement, market readiness, and economic conditions. Across the study’s four scenarios, electricity’s share in final energy use ranges from roughly 25% to 70% in 2050, up from around 20% today. If they had done an evaluation of the CLCPA then electricity’s share of final energy use would be even higher.
      • Energy efficiency is a key factor in reducing energy use, limiting CO2 emissions, and managing infrastructure needs. Even before accounting for electrification, the study finds that robust energy efficiency cuts total final energy use in NYS by 35% of what it otherwise would be in 2050; additional efficiency gains from electrification range from 9% to 21%. Energy efficiency gains are realized by both electric and direct fuel alternatives, with annual improvement rates ranging from 0.5% to 4% depending on the end-use technology.
      • After energy efficiency, electrifying transportation while decarbonizing the grid with renewable energy offers the greatest potential to cost-effectively reduce CO2 emissions in NYS. Electric vehicles (EVs) and plugin hybrid electric vehicles (PHEVs) are projected to become lower cost alternatives to conventional vehicles for most drivers within the next decade, even without additional economic incentives. Almost 30% of New York passenger vehicle miles are projected to be fueled by electricity by 2030 in the Baseline scenario, increasing to roughly 75% by 2050. EV charging infrastructure is an essential component to achieving a highly electrified transportation fleet in NYS. (According to Figure 2-6, there were 12,116,00 light-duty vehicles and 41,000 were electric in 2015 for 0.34%.)
      • New York’s winter climate and building stock call for advanced technologies and targeted approaches to heating electrification when compared to other areas of the United States (EPRI, 2018). While air-source heat pumps (ASHPs) are more efficient and cost-effective than oil-based heating, which continues to warm about one in four homes in New York, natural gas furnaces are currently more economic in NYS on an annualized capital and operating cost metric. Nevertheless, potential breakthroughs in cold-climate heat pumps—including ground-source heat pumps—have the potential to alter these cost and performance projections. Further study could assess the benefits, costs, and feasibility of these advanced technologies in conjunction with building envelope efficiency improvements. (Retrofitting ground source heat pumps is problematic so the more likely retrofit option is air source heat pumps.)
      • The adoption of electric end-use technologies will depend on individual customer decisions—market readiness, technology maturity, vendor-to-customer education, and appropriate incentives will be crucial to advancing electrification. While technology progress and carbon policy help to shift the market from fossil fuels toward electrified end uses, accelerating this transition may well require collaborative market interventions by policymakers, regulators, and utilities, with consideration of the needs of a diverse range of consumer situations—including low-income housing, older or landmarked buildings, and rural settings. (Collaborative market interventions could be construed as ramming what they want down the consumer’s throats.)
      • In all scenarios, New York’s statewide peak demand shifts from summer to winter and, if unmanaged, could increase substantially. Peak demands are expected to shift toward the early mornings of the coldest winter days, primarily due to increased EV charging needs in low temperatures plus electric heat pump adoption, while summer electricity usage drops as air conditioning efficiency improvements outpace growth in service demand. In the Mandates and Transformation scenarios, where customers electrify nearly all space heating and transportation but do not manage the timing of demand on the grid, peak winter demand in 2050 could be more than twice as high as today’s system peak. This highlights a key opportunity for New York’s electricity system stakeholders to develop and implement solution approaches such as cost-reflective time-of-use pricing, active load management of smart vehicle charging and other flexible loads such as space conditioning, behind-the-meter storage, and advanced cold-weather heating systems.
      • Flexible resources arising from a portfolio of advanced technologies and additional transmission will be critical to decarbonizing electricity generation. As more renewables are added to the generation mix to meet New York’s clean energy goals, dispatchable technologies will be needed to maintain reliability and balance variable generation, especially after 2030. Broadening the state’s portfolio of low-carbon, flexible generation assets can help reduce reliance on the gas generation fleet. EPRI’s new Low-Carbon Resources Initiative may provide important insights in this area. (The CLCPA likely remove the low-carbon resources initiative option from consideration.)
      • Customer adoption trends and electricity grid impacts are projected to vary across the state. Limited residential EV curbside charging, split tenant/landlord incentives, and variety across household characteristics and building types influence implementation in downstate urban areas, while affordability of converting to electric technologies may be a factor to consider in other parts of the state.
      • Electrification of specialized applications such as off-road vehicles (for example, forklifts), ground equipment at ports and airports, and industrial end uses may offer substantial benefits. Potential benefits include energy efficiency and reductions in emissions, noise, maintenance, and costs compared to the direct fuel alternative.

Motivated reasoning

There is a prevailing bias in this study that I believe motivates the reasoning and ultimately the results.  According to the document EPRI “brings together its scientists and engineers as well as experts from academia and industry to help address challenges in electricity, including reliability, efficiency, affordability, health, safety and the environment”.  There is no charge to EPRI from its funding organizations to consider all energy sources and determine the most affordable solutions for the future.  Consequently, they are all in for electrification.

This study was funded by the New York Power Authority (NYPA) and Consolidated Edison (Con Ed).  Both organizations have a vested interest in electrification and publicly supporting the CLCPA.  Increased electrification enhances their empires for lack of a better word so the more the better.  The Power Authority is an agency controlled by Governor Cuomo.  I can assure you that they cannot publicly question any action by any agency and certainly cannot raise questions about the viability of the Governor’s signature climate legislation.  Consolidated Edison is a corporation whose profits are dependent upon revenues determined by the Department of Public Services again controlled by Governor Cuomo.  Consequently, they too are reluctant to question the viability of the CLCPA.

According to the report “The study did not explicitly model recently adopted laws in New York City and New York State, such as New York City’s Local Law 97 or the State’s CLCPA. The study is not intended to identify explicit pathways to achieving the state’s GHG reduction targets. The scenarios presented here have been designed to illustrate the role of advanced technology alongside policy and regulatory drivers in reaching NYS’s clean energy requirements.”  I am confident that this language was vetted at the highest levels of NYPA and Con Ed to provide as much distance as possible from anything that could be construed as derogatory to CLCPA implementation.

One would think that a primary result from this analysis would be a comparison of the total costs for the four scenarios.  I did not read every word in the entire document but I did search for the word “cost” and the symbol “$”.  There are costs for options discussed in the electrification technology case studies but the total costs are not listed.  For example, the cost of air source heat pumps relative to natural and oil-fired furnaces are listed and it is shown that air source heat pumps are more cost-effective than oil-fired furnaces.  However, the study did not combine the number of fossil-fired furnaces that have to be converted and the cost of air source heat pumps to come up with a statewide cost. The absence of that obvious information certainly could be construed as a hiding a result inconvenient to the CLCPA.

Magical solutions

In my opinion, the findings include some results that are only possible if there are magical solutions.  In this category are technologies that are not currently available but are assumed to appear as needed in the future.  Also included are policies that have not succeeded as hoped so far but are also assumed to work as needed to meet the electrification scenario requirements.

In the electrifying transportation findings summary above I noted that in New York only 0.34% of the vehicles registered in 2015 were electric vehicles but the Baseline scenario assumes that almost 30% of New York passenger vehicle miles are projected to be fueled by electricity by 2030.  The latest NYSERDA electric vehicle registrations show that by October 2019 the number of electric vehicles was up to 64,588.  If we assume that the number of electric vehicles is proportional to the electric of vehicle miles traveled, then by 2030 there need to be 12,116,00*30% or 3,634,800 light duty vehicles so 3,570,212 electric vehicles have to be purchased in the next ten years.  The magical solution: “Even in the Baseline scenario, declining battery costs combined with lower fuel and maintenance costs make light-duty electric vehicles the economic choice for many households. The upfront cost premium relative to conventional vehicles is more than offset by lower total ownership costs of fueling and maintenance, driving economic adoption for many households and businesses.”  All this does is ignore the very real concerns of people who depend on their vehicles to provide transportation whenever they need it whatever the temperature to go wherever they need to go.  It also assumes that batteries will necessarily get cheaper.

In order to meet the CLCPA emission reduction goals electrification of home heating has to be increased.  EPRI points out that air-source heat pumps are more efficient and cost-effective than oil-based heating.  The problem is that below 20°F the “baseline ASHP system modeled for installation in 2020 provides full heating needs above 20°F only; at lower temperatures, supplemental heating by electric resistance, gas furnace, or oil-based heating equipment is required”.  Of course, all of New York has to have supplemental heating equipment because temperatures below 20°F are to be expected and that makes air-source heat pumps less attractive.  The magical solution: “potential breakthroughs in cold-climate heat pumps—including ground-source heat pumps—have the potential to alter cost and performance projections” that makes more widespread adoption the preferred approach.  This ignores the fact that heat pumps work by transferring energy from one place to another and that there just isn’t that much energy when the temperature is below 20°F.  The potential to alter cost and performance by much is not very likely absent repeals of the laws of physics.

The key findings note that “in all scenarios, New York’s statewide peak demand shifts from summer to winter and, if unmanaged, could increase substantially. Peak demands are expected to shift toward the early mornings of the coldest winter days, primarily due to increased EV charging needs in low temperatures plus electric heat pump adoption”. One of the promises of the future smart grid is that peak loads will be smoothed out so this is a problem.  The magical solution: EPRI claims there is a “key opportunity for New York’s electricity system stakeholders to develop and implement solution approaches such as cost-reflective time-of-use pricing, active load management of smart vehicle charging and other flexible loads such as space conditioning, behind-the-meter storage, and advanced cold-weather heating systems”.  Here is a news flash to EPRI – when residents are in the middle of a polar vortex cold snap that lasts several days, they will have to use whatever energy is needed to stay warm.  All of the solutions proposed will result in regressive costs hurting those who can afford it the least the most.

Conclusions

There are aspects of this report that have implications to CLCPA implementation that deserve more attention than I can include in this introductory post.  For example, the future scenarios specify values of the Social Cost of Carbon that increase over time.  I believe that is a necessary aspect for that kind of carbon pricing to work but this is the first instance where I have seen projections made for New York.  The problem I want to address is the fact that the Social Cost of Carbon is supposed to put a number on future damages from CO2 emitted today and the values they included exceed the published thresholds.  If the costs exceed the expected damages it doesn’t make sense. You wouldn’t spend more than a dollar to save a dollar.

As noted, these electrification scenarios do not “make policy recommendations or identify specific pathways to achieving the state’s greenhouse gas (GHG) targets”.  While this report has a vested interest in electrification, there also is a problem that they had to dance around or incur the wrath of the politicians that passed the CLCPA.  One of the findings noted “Flexible resources arising from a portfolio of advanced technologies and additional transmission will be critical to decarbonizing electricity generation.  As more renewables are added to the generation mix to meet New York’s clean energy goals, dispatchable technologies will be needed to maintain reliability and balance variable generation, especially after 2030”.  The most appropriate dispatchable technology (natural gas fired turbines) is a Voldemort technology which must not be named because it is evil.  Problem is when the wind is calm at night the only alternative to keep the lights on is energy storage which is horrifically expensive.  EPRI, NYPA, and Con Ed know this but could not say it, hence the obfuscatory language.

The bottom line for any of these electrification scenarios is that intermittent energy, i.e., wind and solar, cannot fuel our society on its own.  The whole concept of the CLCPA net-zero energy future is flawed.   There is currently no alternative to fossil fuels for efficient cost-effective transport and the only near-zero-carbon fuel which can meet electrical generation needs is nuclear, which New York state policy is explicitly rejecting.

3 March 2020 New York Climate Action Council Meeting

In the summer of 2019 Governor Cuomo and the New York State Legislature passed the Climate Leadership and Community Protection Act (CLCPA) which was described as the most ambitious and comprehensive climate and clean energy legislation in the country when Cuomo signed the legislation.  The legislation set up the Climate Action Council to figure out how to implement the rule.  This post summarizes the first meeting of the Council.

I am following the implementation of the CLCPA closely because its implementation affects my future as a New Yorker.  Given the results for other jurisdictions that have implemented renewable energy resources to meet targets at far lower levels I am convinced that the costs in New York will be enormous and my analyses have supported that concern.  The opinions expressed in this post do not reflect the position of any of my previous employers or any other company I have been associated with, these comments are mine alone.

Background

The politicians who passed the CLCPA mandated a reduction of New York’s GHG emissions to 60 percent of 1990 emissions levels in 2030 and that emissions from electricity production would be zero by 2040.  However, they just assumed that their targets could be met and only mandated that two years of the effective date of the legislation the Climate Action Council would prepare and approve a scoping plan outlining the recommendations for attaining the statewide greenhouse gas emissions limits in accordance with the schedule.  In other words, this is a classic cart before the horse legislation example.

The Albany Times Union described the first meeting of the Climate Action Council as “uneventful” with cordial interactions, they did note “remarks by members signaled the tough questions the group will be grappling with in coming months and years”.  “How do we assess the cost of all this?” asked Donna DeCarolis, president of National Fuel Gas, a western New York energy company.

The New York Climate Act web page appears to be the new face of the program.  It includes a sign-up link to be on the contact list for new developments, and a fact sheet for the Climate Act.  There also is a general description of the Climate Action Council and a list of members.  Finally, there is a link to the first meeting materials and a recording of the session.

March 3, 2020 Climate Action Council Meeting

The web page for the Climate Action Council included meeting materials for the first meeting:

Update March 6, 2020: There is a video of the meeting available at the Climate Action Council website.

The agenda had the following items listed:

      • Welcome and Introductions
      • Co-Chair Remarks
      • Presentation: Climate Science Considerations, Radley Horton, Columbia University
      • Presentation: Climate Act Requirements
      • Climate Act Goals
      • Bylaws
      • Advisory Panels
      • Next Steps

The meeting presentation was a power point covering the agenda items and the climate act requirements presentation.  I am not going to reproduce all the slides in this presentation but will call your attention to some items.  The slide entitled New York’s Climate Leadership list five items including “Groundbreaking Environmental Support: Restore Mother Nature Bond Act – $3 billion “Restore Mother Nature” Bond Act to restore our state’s environment and improve resiliency.”  I think that the presentation should have noted that this is a proposed bond and has not been approved by the public.  For a state that has serious water quality problems my personal opinion is that the majority of those bond revenues should go to those problems rather than climate initiatives but only time will tell how that works out.

One thing that caught my eye was the slide entitled major roles and responsibilities that listed the following items:

      • Climate Action Council: Prepare and approve a scoping plan of recommendations to achieve 40×30, 85×50, carbon neutrality
      • Climate Justice Working Group: Establish criteria to identify and develop a list of disadvantaged communities
      • Just Transition Working Group: Conduct a study on job creation and workforce disruption related to the transition to a low carbon economy
      • PSC: Establish a program requiring load serving entities meet 70×30 and 100×40 targets
      • DEC: Promulgate the statewide greenhouse gas emissions limit regulation; establish a value of carbon; issue annual reports on statewide greenhouse gas emissions; promulgate regulations to implement the scoping plan
      • All Agencies: Implement strategies to reduce emissions; consider consistency with the Act in agency decisions

The climate justice working group will develop criteria for and list of disadvantaged communities and will report on barriers and opportunities for clean energy.  They will “ensure no increase in co-pollutant emissions or disproportionate burden on disadvantaged communities” and “DEC shall establish a community air monitoring pilot program in at least 4 disadvantaged communities”.  There also is a requirement to “Invest or direct available and relevant programmatic resources in a manner designed to achieve a goal for disadvantaged communities to receive 40% of overall benefits of spending on:

    • Clean energy and energy efficiency programs
    • Projects or investments in the areas of housing, workforce development, pollution reduction, low-income energy assistance, energy, transportation, and economic development

This legislation sets very aggressive targets to combat the supposed existential threat of climate change.  Nevertheless, the politicians still established these requirements which dilute resources from the primary goal and may spend money in ways that might not be the most cost-effective way to reach the targets.

I look forward to more information about the PSC responsibility to “establish a program requiring load serving entities meet 70×30 and 100×40 targets.  On the face of it, this is puzzling.  New York is de-regulated and the load serving entities do not generate much electricity so what are they supposed to do?  As a cynical New York resident, I suspect requiring them to meet the targets could ultimately transfer blame when things don’t work out.

Dr. Horton’s presentation “Climate Hazards, Impacts and Opportunities” included the usual litany of scary statistics and catastrophic projections used as rationale for the CLCPA.  One of my pragmatic environmental principles is the Baloney Asymmetry Principle first defined by Alberto Brandolini: “The amount of energy necessary to refute BS is an order of magnitude bigger than to produce it.”  There is so much BS in this presentation that I could spend weeks listing the caveats to claims, showing how data shown is often cherry picked to show the worst case, and how some of the information is mis-leading.  A simple list of examples of each will suffice.  The sea level trends and projections slide should be caveated to note that there are plenty of data showing none of the acceleration of sea-level rise that would be needed to reach the scary projections shown.  There are several references to climatic trends but note that the figures start in 1930, 1950 and 1958 which suggests that the starting points were cherry-picked to maximize the effect.  The global temperatures projections slides uses representative concentration pathway 8.5 which is mis-leading “The misuse of RCP 8.5 involves the transformation of what is more accurately described as a worst-case scenario into the sole ‘business as usual’ or baseline scenario that has become a centerpiece of climate policy discussions.”

Conclusion

So it begins, stay tuned.

NY GHG Emissions Status and Climate Leadership and Community Protection Act Targets

UPDATE March 4, 2020:  I mis-interpreted the 2030 GHG emissions reduction target.  I thought it was supposed to be a 60% reduction but it is only a 40% reduction.  As a result the sector reductions needed to meet that target have been modified.

In the summer of 2019 the Governor Cuomo and the New York State Legislature passed the Climate Leadership and Community Protection Act (CLCPA) which was described as the most ambitious and comprehensive climate and clean energy legislation in the country when Cuomo signed the legislation.  I recently summarized the historical Green House Gas emissions (GHG) and CLCPA targets.  This post looks at the historical data relative to the 2030 target.

Background

As noted in the historical New York State GHG emissions post the New York State Energy Research & Development Authority (NYSERDA) does an annual inventory of GHG emissions.  Their most recent report, Greenhouse Gas Inventory 1990-2016 contains a detailed inventory of historical greenhouse gas emission data from 1990-2016 for New York State’s energy and non-energy sectors.  Table S-2 New York State GHG Emissions 1990–2016 (MMtCO2e) from that report lists emissions from different sectors in million tons of CO2 equivalent (MMtCO2e).

The CLCPA GHG Emissions Targets 2016 Update table presents the emissions status for the 2030 CLCPA target to reduce GHG emissions 40% from the 1990 level and the 2050 CLCPA target to reduce GHG emissions 85% from the 1990 level.  According to the NYSERDA methodology, 1990 GHG emissions were 236.2 million metric tons of CO2e. The 2030 target limit is 141.7 million metric tons of CO2 equivalent (MMtCO2e) and in 2016, the last year of the NYSERDA inventory, NYS emissions were 205.6 MMtCO2e.  Therefore, in order to meet the CLCPA target in 2030 another 63.9 MMtCO2e have to be reduced.  This post addresses the fact that New York state reduced GHG emissions 30.6 MMtCO2e in the 26 years between 1990 and 2016 but has to reduce them another 63.9 MMtCO2e in 14 years to meet the 2030 CLCPA target.

Analysis

The New York State GHG Emission Reductions 1990 to 2016 table extracts the 1990 and 2016 data from NYSERDA Table S-2.  It is instructive to look at where the reductions were made over that 26-year period.  In the energy category total emissions were down 17% (36.16 MMtCO2e).  The largest reductions came from the electric generation sector but there were also reductions from the residential, commercial and industrial sectors.  Transportation, net imported electric, and waste incineration increased.  For non-energy sources the emissions went up 21% but only 5.6 MMtCO2e.  Although the waste sector went down agriculture and industrial process sector emissions went up.  Overall the State GHG emissions went down 30.58 MMTCO2e

The CLCPA 2030 target of 141.7 MMtCO2e requires a reduction in the fourteen years from 2016 of 63.9 MMtCO2e.  As shown in the New York State GHG Emission Reduction Projections 2016-2030 table, if every sector in the economy was required to make the same percentage reduction, then each sector would have to reduce emissions 31%.  Of course, it might be possible to reduce some sectors to zero.  The CLCPA proposes to eliminate GHG emissions from the electric sector by 2040 so what if that schedule is accelerated and we also reduce industrial GHG emissions to zero.  The same table also includes a scenario showing those reductions and shows that all the other sectors would still have to make 14% reductions.

A more reasoned approach to possible reductions would be to look at the reasons why there were reductions in the past.  For example, there are detailed numbers for the electric sector from the EPA Clean Air Markets Division Air Markets Program Data website. The website includes a query tool that I have used for years to extract specific data from national emission monitoring programs.  For this analysis I downloaded CO2 emissions data, operating time, heat input and load data as well as unit-specific information on fuel use and unit type so that I could show what changes caused the emissions reductions.  In the Last 20 years (2000 to 2019) New York State CO2 Emissions table, annual CO2 emissions for the last 20 years by the primary fuel type reported to EPA are listed.  Note that the total emissions in this table is greater than the NYSERDA number.  This is because the EPA data includes some sources that are not electric generating units included in the EPA data.

Clearly the primary cause for the reductions observed is decrease use of coal and residual-oil.   New York is unique in that there are five relatively new large residual oil-fired boiler units in the state.  The primary driver for the reductions was the cost of oil relative to natural gas coupled with the fact that there is much less CO2 emitted by natural gas firing.  At this time these units survive because they can provide 1000s of MW when necessary and their operational costs are low enough that the payments to be able to provide that capacity are sufficient to be viable.  Note, however, that they cannot reduce emissions much more because they still have to run a couple of times a year to prove that they can provide capacity.  Coal-firing units in New York were older and were required to install extensive controls over this period to continue to operate.  The cost differential between natural gas and coal was the final blow to viability.  The Cuomo administration requirement to close these units by 2020 was symbolic only because the reality is that despite the opposition of the Cuomo Administration, fracking reduced the cost of natural gas so that it was cheaper than coal. If coal-firing was cheaper than natural gas then those units would have been needed to provide economical electric energy and there would have been significant pushback to banning coal in New York.

I estimated what I expect would be a reasonable projection for possible reductions in the electric sector.  Coal is easy because the last coal plant has already shut down.  Frankly I don’t see how the State can shut down the residual oil-fired plants by 2030 without endangering capacity reliability but we can assume that the 2019 value is de minimus.  Doing the same thing with the other fuel and other oil categories brings the expected reduction to 3.51 MMtCO2e.  Finally, assuming that enough renewables come on line that natural gas emissions are cut by a quarter, I think the maximum you could possibly expect to get out of the electric is 9.76 MMtCO2e.

The largest source of GHG emissions in 2016 was the transportation sector.  New York is currently a member of the Transportation and Climate Initiative (TCI) which is currently considering “a new draft proposal for a regional program to establish a cap on global warming pollution from transportation fuels and invest millions annually to achieve additional benefits through reduced emissions, cleaner transportation, healthier communities, and more resilient infrastructure.”  While I have my doubts about the efficacy of their proposals the key point for this analysis is that they propose a series of actions that could reduce transportation sector emissions only up to 25%.

The reduction projections table also estimates the emission reductions necessary if electric sector were reduced by 9.76 MMtCO2e and transportation sector emissions were reduced by 25%.  Because these reductions are for two large sectors the remaining sectors would have to make much higher reductions.  I estimate 80% from all the other sectors.

Conclusion

This analysis shows that the 2030 40% reduction target is a stretch.  If every sector in the economy was required to make the same percentage reduction, then each sector would have to reduce emissions 31%.  If electric sector and industrial GHG emissions went to zero, then all the remaining sectors would have to reduce emissions 14%.  If electric sector emissions went down an amount I believe is reasonable based on historical emissions and transportation sector emissions went down by the highest percentage proposed by the TCI, then all remaining sectors would have to reduce emissions by 34%.

 Incredibly it is even worse because in my analysis I assumed that the emission reduction programs would be implemented over the 14-year period 2016 to 2030.  CLCPA § 75-0103 establishes the New York state climate action council.  It will consist of 22 members who have the charge to develop a scoping plan.  Two years of the effective date of the legislation the climate action council will prepare and approve a scoping plan outlining the recommendations for attaining the statewide greenhouse gas emissions limits in accordance with the schedule.  On or before three years of the effective date of the legislation, the council shall “submit the final scoping plan to the governor, the speaker of the assembly and the temporary president of the senate and post such plan on its website”.  In other words, the State will finally have the plan to meet the 2030 target of a 40% reduction in emissions in the summer of 2022 which leaves eight years to meet the emission reductions.

In the summer of 2022, the residents of New York will finally get an estimate of how many renewable resources will be necessary to displace the existing GHG emissions.  Not until then will we see how many wind turbines and how many solar panels will have to blanket the countryside, how much energy storage will be required to support these intermittent sources of energy, and how much transmission will be need to move the diffuse renewable energy from where it is produced to where it is needed.  Obviously, we will also have to wait until then to get an estimate of the costs projected to meet this aspirational goal.  Based on these preliminary first-guess numbers, the 2030 target of a 60% reduction by 2030 is so daunting that only the energy innumerate could possibly think that it can be met.

While some may say that once the plan is unveiled that a more reasonable target will be adopted, I disagree.  The zealots who have advocated for this virtue-singling law will never be satisfied and will be the first ones to litigate the State to meet these goals however unreasonable and expensive implementation may be.  Absent a magical solution, the only reasonable recourse is to repeal the CLCPA and start over by developing the plan first and then setting the targets.

NY Climate Leadership & Community Protection Act Emissions Targets

UPDATE March 4, 2020:  I mis-interpreted the 2030 GHG emissions reduction target.  I thought it was supposed to be a 60% reduction but it is only a 40% reduction.  As a result the sector reductions needed to meet that target have been modified.

In the summer of 2019 the Governor Cuomo and the New York State Legislature passed the Climate Leadership and Community Protection Act (CLCPA) which was described as the most ambitious and comprehensive climate and clean energy legislation in the country when Cuomo signed the legislation.  In one of the first implementation tasks the New York State Department of Environmental Conservation (DEC) has started the process to calculate a statewide Greenhouse Gas emissions (GHG) limit for this law.  This is a background post that defines the emissions targets that I will  reference in future posts about the reductions necessary.

Emissions Inventory

New York State greenhouse gas emissions are available from the New York State Energy Research & Development Authority (NYSERDA) in their annual inventory of GHG emissions.  The most recent report, Greenhouse Gas Inventory 1990-2016 contains a detailed inventory of historical greenhouse gas emission data from 1990-2016 for New York State’s energy and non-energy sectors.  Table S-2 New York State GHG Emissions 1990–2016 (MMtCO2e) from that report lists emissions from different sectors in million tons of CO2 equivalent (CO2e).  They use this unit of measure in order to include all greenhouse gases in the control strategy as a function of global warming potential (GWP).  Despite the fact that this is a perfectly good emissions inventory the law mandates a new inventory with slightly different methods.

The CLCPA inventory requirements are included in § 75-0105: Statewide greenhouse gas emissions report.  The regulation states that “No later than two years after the effective date of this article, and each year thereafter, the department shall issue a report on state-wide greenhouse gas emissions, expressed in tons of carbon dioxide equivalents, from all greenhouse gas emission sources in the state, including the relative contribution of each type of greenhouse gas and each type of source to the statewide total”.

There are two methodological differences between the CLCPA inventory requirements and the methodology used for the NYSERDA report.  Firstly, the legislation states “§ 75-0105(3): The statewide greenhouse gas emissions report shall also include an estimate of greenhouse gas emissions associated with the generation of imported electricity and with the extraction and transmission of fossil fuels imported into the state which shall be counted as part of the statewide total.”  Secondly, in the definitions § 75-0101(2) “Carbon dioxide equivalent” is defined as “the amount of carbon dioxide by mass that would produce the same global warming impact as a given mass of another greenhouse gas over an integrated twenty-year time frame after emission”.

I have not quantified how those differences will affect the emissions relative to the NYSERDA report.  The lifecycle approach to the GHG inventory has not been used to date by the agencies to estimate extraction and transmission of fossil fuels emissions.  Presumably this will increase the historical numbers.  I was not familiar with the nuance of global warming impact time frames so did some internet research.  The GHG Management Institute “What is global warming potential and which one do I use?”  states:

The second complication is one that occasionally trips people up. Remember above when we defined GWP by saying “cumulative radiative forcing…integrated over a period of time”? Well, that means that we have to define a time period for the integration to occur. You have to know what the integration period is to make sure you are using the correct GWP. The typical periods that the IPCC has published are 20, 100, and 500 years (the latest report quit publishing values for 500 years).

Now, to be clear, everyone pretty much universally uses 100 year GWP values, so you often never see the time period even cited. It is just assumed you know it is 100 years. But occasionally, someone will use something different, not realizing that they are breaking convention. It is also possible to compute an infinite time horizon GWP value, which would basically mean that accounted for every bit of radiative forcing of every molecule of gas as long as it existed in the atmosphere.

It is notable that this author says: ”everyone pretty much universally uses 100 year GWP values” but the CLCPA uses 20 year values.  In Intergovernmental Panel on Climate Change fifth assessment report Chapter 8 IPCC Table 8.7 GWP and GTP with and without inclusion of climate–carbon feedbacks lists GWP values for methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and carbon tetrafluoride but not sulfur hexafluoride which is a listed chemical in the CLCPA.  The 20 year GWP is greater than the 100 year GWP for methane, hydrofluorocarbons, and perfluorocarbons.

Emissions Targets

The CLCPA specifies reductions in the future from 1990 emission levels per “§ 75-0105(5): The statewide greenhouse gas emissions report shall also include an estimate of what the statewide greenhouse gas emissions level was in 1990”.  As noted above these levels will have to be re-calculated using the CLCPA methodology but we can get an idea what is needed by looking at the NYSERDA inventory.

The CLCPA GHG Emissions Targets 2016 Update table presents the emissions status for the 2030 CLCPA target to reduce GHG emissions 40% from the 1990 level and the 2050 CLCPA target to reduce GHG emissions 85% from the 1990 level.  According to the NYSERDA methodology 1990 GHG emissions were 236.2 million metric tons of CO2e. The 2030 target limit is 94.5 million metric tons and in 2016, the last year of the NYSERDA inventory, NYS emissions were 205.6 million metric tons.  Therefore, in order to meet the CLCPA target in 2030 another 63.9 million metric tons have to be reduced.  By 2050 emissions have to be reduced 170.2 million metric tons from 2016 levels.

Conclusion

This post specifies the CLCPA emission targets for future reference.  Originally, I was going to develop these numbers and combine them with the observed cost efficiency for existing NYS GHG emission reduction investments to estimate the potential cost of the program but there are other things to look at too.  For example, New York state reduced GHG emissions 30.6 million metric tons in the 26 years between 1990 and 2016 but has to reduce them another 63.9 million metric tons in 14 years to meet the 2030 CLCPA target.   That deserves analysis and its own post. Rather than a huge post covering all the aspects of these numbers I will prepare shorter posts on each aspect that reference these numbers.  Stay tuned.

New York Accelerated Renewable Energy Growth and Community Benefit Act

Updated March 1, 2020 to clarify and correct typographical errors.

In February 21, 2020 New York governor Andrew Cuomo proposed a 30-day budget amendment that will “streamline the process for environmentally responsible and cost-effective siting of large-scale renewable energy projects across the state”. The proposed legislation, if adopted, will create a new Office of Renewable Energy Permitting to streamline the consenting process for large-scale projects across New York.  This post addresses this latest hypocritical over-reach of the Cuomo Administration.

Permitting Process

New York’s Environmental Conservation Law requires NY regulatory agencies to consider environmental impacts equally with social and economic factors when making permitting decisions and that they must balance those factors when making a decision to approve an action.  New York has different rules for different sized projects.  For any electric generating facility greater than 25 MW in capacity the permitting requirements are specified in Article 10.  The Power NY Act of 2011 established the process for siting generating facilities in Article 10.  That law established a multi-agency siting board and was supposed to streamline the permitting process.  Unfortunately, its requirements are so strict that it is still unwieldy and cumbersome.

As on February 25, 2020 there are 49 projects under permitting review in the active Article 10 queue   and five projects have been certified. There are 16 wind facilities proposed with 899 turbines generating 3,117 MW.  There are 25 solar projects proposed for 3,914 MW of capacity and 4 solar projects with storage proposed for 740 MW of capacity covering at least 11,324 acres.  There also are three gas-fired projects and one waste energy project.  Since the new requirements were established only five projects have been approved with two completed in 3.2 years, two completed in 3.5 years and one in 4.5 years.

The governor’s office said the state’s existing process for energy-generating sites was designed for plants that used fossil fuels and created before new clean-energy standards were put in place.  The existing Article 10 process is cumbersome but the insinuation that only fossil fuel facilities have significant enough environmental, social and economic impacts to warrant a complete review of the potential impacts is a stretch in my opinion.

Cuomo’s Environmental Impact Hypocrisy

There is no better illustration of the Cuomo’s administration hypocrisy than the decision to block the Finger Lakes LPG project.  On July 12, 2018, New York State Department of Environmental Conservation (NYSDEC) Commissioner Basil Seggos issued a decision for a proposal to construct and operate a new underground liquefied petroleum gas (LPG) storage facility for the storage and distribution of propane in the town of Reading in the Finger Lakes region of New York.  The decision denied the permit applications for the proposed project on the grounds the facility would have a significant adverse impact on community character in the local area and the Finger Lakes region.  In my post on that decision I pointed out that the community character rationale was based on the State Environmental Quality Review Act section: “impacts to noise and aesthetic resources as revealed on the current record are essential components in the evaluation of impacts on community character in the context of this proposed project”.

So how did the Finger Lakes LPG project affect community character? The project proposed modifications during the application process to reduce the scale and environmental impacts of the project in response to local stakeholder concerns.  The modifications eliminated the proposal to store liquid butane at the facility and reduced the underground propane storage capacity from 2.1 million barrels to 1.5 million barrels; eliminated the project’s rail and truck loading facilities so all deliveries of liquefied petroleum gas would be by pipeline; eliminated one of the brine ponds; and, for lack of a better term offered bribes as they proposed to “provide resources ranging from financial resources to technical resources (mining data) to support community initiatives for the preservation and improvement of water quality in the area, including Seneca Lake”.  The unacceptable aesthetic community character of final proposed plan of the Finger Lake LPG Storage project was a brine pond, a compressor station, and a support building.  The unacceptable noise community character of the project was two electric 75 horse power pumps to pump product from the tanks into the pipeline to the electronically driven injection pumps despite the likely use of insulated walls and advanced fan technology to dampen sound.

It is unclear how an Administration that claimed that Finger Lake LPG Storage project’s minimal aesthetic and noise projected impacts affected community character so badly that the project could not be permitted but can somehow claim that industrial wind and solar project don’t also affect community character.  As noted, there are at least 899 wind turbines and solar panels covering at least 11,324 acres in the existing permitting queue.  Consider, for example, the aesthetic impact of the Ball Hill Windpark.  This facility has been approved (note that it was not permitted under Article 10) to install 29 wind turbines generating around 100 MW with 13 miles of access roads, 5.7 miles of above-ground utility lines, a substation, a switchyard and an operations and maintenance building.  According to the 2018 Proposed Modifications Summary of Environmental Impacts wind turbines will be visible in 33.9% of the area within the 5-mile viewshed.  According to the 2008 Environmental Assessment Form the smaller turbines originally proposed would be visible from greater than 5 miles from a parcel of land which is “dedicated to and available to the public for the use, enjoyment and appreciation of natural or man-made scenic qualities” and “an overlook or parcel of land dedicated to public observation, enjoyment and appreciation of natural or man-made scenic qualities”, and a “site or structure listed on the National or State Registers of Historic Places” and between ½ and 3 miles to a State Wildlife Management Area.

 Environmental Protection

Cuomo is quoted as saying: “Climate change is the existential challenge of our time, and New York State has risen to the occasion by enacting the strongest laws in the nation to protect and preserve our environment” It is utter hypocrisy to claim to protect and preserve our environment while simultaneously proposing to circumvent the permitting process that “Requires environmental and public health impact analyses, studies regarding environmental justice and public safety, and consideration of local laws”.

As far as I can tell the State Administrative Procedure Act (SAPA) and the State Environmental Quality Review Act (SEQRA) requirements for environmental reviews do not apply to the Climate Leadership and Community Protection Act (CLCPA).  One of the requirements of an air quality assessment for a new fossil-fired electric generating unit is to consider the cumulative impact of all local emitting sources as well as the new source itself.  While I think that while an individual industrial wind facility or solar facility Article 10 application analysis may conclude there isn’t a significant environmental impact the cumulative impact of all the facilities required by the CLCPA to provide enough power to meet the reliability needs of the state will likely have significant environmental impacts.  I don’t think it is fair to ask each renewable energy developer to consider cumulative impacts but I also don’t think that cumulative impacts can be ignored.

The obvious solution would be for the state to evaluate cumulative impacts.  Note, however, that the first step for such an analysis would be to determine how many wind turbines and solar panels would be required and where they would be located.  The CLCPA is just starting the process to prepare a scoping plan that will document the state’s plan to implement the law.  First problem is that scoping plan won’t be available for a couple of years.  In the meantime, I have prepared my own estimate of the renewable resources necessary to meet this legislation.  In order to meet the mandate that all electricity will be generated by non-emitting sources in 2040 and provide enough power to cover the needs of an example winter peak period I estimate that New York will require 11,395 MW of residential solar, 16,117 MW of utility-scale solar, 18,457 MW of on-shore wind and 16,363 MW of off-shore wind.  If the on-shore wind turbines are rated at 4.8 MW that mean that over 3,845 on-shore wind turbines.  Using numbers from one of the solar permit applications, I estimate that 176 square miles will be needed to meet the 16,117 MW of utility scale solar estimate.  The bottom line is that while an individual industrial wind facility or solar facility may not have a significant environmental impact the cumulative impact of 176 square miles of utility-scale solar panels and at least, 3,845 on-shore wind turbines certainly could have negative environmental impacts.  I also determined that for a fifteen-hour period from January 3, 2018 at 1600 until January 4, 2018 at 0600 there was a storage deficit totaling 134,545 MWh which would require energy storage which also needs to be considered in a cumulative environment impact analysis.

Conclusion

The Niagara County Legislature recently passed four resolutions directed squarely at an amendment to revise the Article 10 rules.  The amended rules only said that if there were minor changes to the proposed facility it did not require the entire application process to be opened up again.  In other words, it was a relatively innocuous change as opposed to the Governor’s plan to entirely ignore the Article 10 process.  Niagara County and other Upstate New York municipalities are already upset that Article 10 has taken away control of local siting decisions.  This proposal to remove the checks and balances included in Article 10 will not be appreciated.

The CLCPA is all style and no substance.  There is no plan to convert all energy sectors away from fossil fuels only a mandate to do it.  If there is no plan then there are no costs, no quantified benefits, and no starting point to balance environmental impacts with social and economic factors for the state as a whole.  The Article 10 permitting process requires that kind of assessment on the local level.  Cuomo’s proposal to remove that check would mean that anyone, anywhere in New York State that could possibly be affected by anything related to the ambitious plan to convert the New York energy to carbon-free resources will have no recourse.  I suspect that when the folks who whined their way to get the Finger Lakes LPG project cancelled are going to be more than a little upset when industrial wind and solar facilities blanket their community.

NYSERDA Toward a Clean Energy Future – A Strategic Outlook 2020-2023

Alicia Barton, President & CEO of the New York State Energy Research & Development Authority (NYSERDA) recently announced the release of NYSERDA’s 2020-2023 Strategic Outlook which is their overview of their plans for the next several years.  This is important because the plan to implement the aspirational Climate Leadership and Community Protection Act (CLCPA) is supposed to be developed in this timeframe and NYSERDA staff will undoubtedly play an important role in that effort.  This post provides an overview of this report and costs.  Subsequent posts will address NYSERDA’s missions in more detail.

Background

On February 11, 2020 the following email was sent from NYSERDA.

Last year was a landmark year for climate action in New York. Governor Cuomo’s nation-leading Green New Deal and the signing of the New York State Climate Leadership and Community Protection Act (CLCPA) have put us at the forefront in lowering carbon emissions and advance a clean energy future with a just and equitable transition that is addressing the most pressing issue of our time – climate change.

Building on the momentum of our accomplishments, New York State is on the path to achieving a carbon free electricity system by 2040, an 85 percent reduction in greenhouse gas emissions by 2050, and ultimately a carbon-neutral economy, touching on all sectors including transportation, buildings and industrial production. With climate action featured prominently in Governor Cuomo’s annual State of the State and Executive Budget addresses this year, NYSERDA’s work to combat climate change, preserve the environment, and grow the green economy is more important than ever before.

I am therefore excited to share NYSERDA’s 2020-2023 Strategic Outlook, which presents our key objectives and strategic focus areas while placing them into the broader context of New York’s long-term energy policies and market landscape. The report highlights our increasing efforts to support New York’s energy transformation through decarbonization of transportation, energy affordability and equity, electrification of buildings, and building a resilient energy system in support of NYSERDA’s five mission outcomes:

            • Greenhouse Gas Emissions Reduction
            • Renewable Energy
            • Energy Efficiency
            • A Distributed and Resilient Energy System
            • Building a Clean Energy Economy.

I hope you will take the time to review the Strategic Outlook and understand we cannot be successful in accelerating action to meet the needs of a changing energy landscape without participation from stakeholders like you. Together we will seize the opportunity to make Governor Cuomo’s vision for a clean energy future a reality.

Message from President and CEO

The strategic outlook report includes an introductory message from the President.  According to this message the rationale for action on climate change “reached new heights during the September 2019 Climate Week, with the youth movement and climate strikes in New York City and across the nation driving home the urgency and importance of addressing one of the most pressing matters of our time.”  Color me unimpressed.  According to this children and activists are responsible for setting New York policy.  What could possibly go wrong?

Funding Commitments

At the top of my list of issues for this regulation is costs which, by the way, is not usually a concern of children and activists.  According to the document: “Several funding sources help NYSERDA advance the State’s clean energy goals and achieve the Authority’s mission. NYSERDA invests these funds in a fiscally responsible manner that maximizes benefits to New Yorkers, fills critical gaps, and addresses the needs of the market.”

Per the document there are four funding mechanisms.

Clean Energy Fund

Authorized by the Public Service Commission (PSC) and derived from an assessment on retail sales of electricity by State utilities — it is comprised of four portfolios: Market Development, Innovation and Research, NY-Sun, and NY Green Bank.

Clean Energy Standard

As authorized by the PSC, these funds are realized by NYSERDA through the sale of Tier 1 Renewable Energy Credits (RECs), Offshore Wind Renewable Energy Credits (ORECs), and Zero Emission Credits (ZECs) as well as receipt of Alternative Compliance Payments from New York’s Load Serving Entities (LSEs). Through PSC orders, LSEs are obligated to meet annual compliance obligations for RECs, ORECs and ZECs. As needed, utility financial backstop collections may be called upon to meet funding shortfalls.

Regional Greenhouse Gas Initiative (RGGI)

Derived from sale of carbon emission allowances as set forth in 6 NYCRR Part 242 and 21 NYCRR Part 507.  The amount of revenues available is dependent on the variable auction prices for the allowances. Per requirements in 21 NYCRR 507, RGGI funds are used to advance energy efficiency, renewable energy, and carbon abatement projects in New York State.

Other Funds

Includes sources provided by various sponsors used for specific purposes. Public funds are leveraged considerably with private sector funding through NYSERDA programs.

For the first time that I have been able to find, the State admits how much some of this might cost.  The NYSERDA Strategic Outlook Anticipated Commitments (April 1, 2020 – March 31, 2023) table states that the total 3-year investment level cost is $14,255,988,000.  Importantly, this is not the entire cost just the cost of the State’s programs to fill critical gaps and address the needs of the market.

The Clean Energy Fund is the largest source of funding.  It is “derived from an assessment on retail sales of electricity by State utilities” which means that the ratepayers are on the hook for the $4.75 billion annual costs.  If all that funding were new charges to the utility bills and my guesses how it should be apportioned, then the average cost per residential customer is on the order of $200 per month for electricity and $200 for gas.  The state should provide that number but note the utility companies have been forbidden to show those numbers in their bills.  Make no mistake however, increases in utility rate cases undoubtedly include these added costs.

Although NYSERDA claims that they invest these funds in a fiscally responsible manner that maximizes benefits to New Yorkers their results to date do not auger well for the cost to implement the CLCPA.  The State has started to do the scoping study to determine how to meet the emission reduction targets, but that won’t be available for three years.  In the meantime, I have evaluated the cost effectiveness of New York’s CO2 investments using the New York Clean Energy Dashboard and NYSERDA’s RGGI-Funded Programs Status Report – Semiannual Report through December 31, 2018.  As shown on the table of anticipated commitments I expect that the CO2 reduction benefit will only be 44,669,559 tons based on the results of those programs to date.  More importantly, there are few indications that these investments will be fiscally responsible because most investment programs described in the investment reports do not meet the social cost of carbon[1] cost effectiveness threshold.

One last item of note is that the priority initiative for energy storage is funded at just under $160 million.  In my table I did not claim any expected reduction in CO2 emissions because energy storage does not directly displace fossil fuel emissions.  On the other hand, energy storage is absolutely needed to backup renewable wind and solar when the wind does not blow at night. When someone claims that wind and solar costs are comparable to a new gas-fired power plant they ignore the added costs necessary to get power to your home whenever you need it.  That requires energy storage and those costs will be enormous.  In particular, for the period 2040 to 2050 I found the energy storage necessary to cover the wind and solar deficit when the wind was not blowing at night for the example period of January 3-4 2018 was a staggering $176.3 billion.

[1] The Social Cost of Carbon is supposed to represent the future cost impact to society of a ton of CO2 emitted today.  Therefore, it is entirely fair to use it as a metric to determine if the investments made from carbon pricing income are cost effectively reducing CO2.  I believe New York will base their carbon pricing on a $50 global social cost of carbon at a 3% discount rate so that is the cost benefit effectiveness threshold metric I use.

 

NYSERDA RGGI-Funded Program Results

The New York State Energy Research and Development Authority (NYSERDA) report New York’s RGGI-Funded Programs Status Report – Semiannual Report through December 31, 2018 (“Status Report”) describes how New York invested the proceeds from the RGGI auctions.  I previously described the report by summarizing the results by sector.  This post provides results by program.

Background

The Regional Greenhouse Gas Initiative (RGGI) is ten years old and has been touted as a successful example of a “cap and dividend” pollution control program.  New York State has been involved in the program since its inception and touts its success.  I have written extensively on the results and have shown that in fact its successes have been limited.   For example, the fundamental assumption for any carbon pricing program is that the proceeds can be invested effectively.  However, the observed results for New York’s experience in RGGI suggests that this may not be the case.

The Social Cost of Carbon (SCC) is supposed to represent the future cost impact to society of a ton of CO2 emitted today.  It is a policy tool that attaches a price tag to the long-term economic damage caused by one ton of carbon dioxide, hence the cost to society.  It was extensively by the Obama Administration to justify the Clean Power Plan, has been proposed for use in the New York Independent System Operator carbon pricing initiative and is included in New York’s Climate Leadership and Community Protection Act.  In that law § 75-0113. Value of carbon, states that

      1. No later than one year after the effective date of this article, the department, in consultation with the New York state energy research and development authority, shall establish a social cost of carbon for use by state agencies, expressed in terms of dollars per ton of carbon dioxide equivalent.
      2. The social cost of carbon shall serve as a monetary estimate of the value of not emitting a ton of greenhouse gas emissions. As determined by the department, the social cost of carbon may be based on marginal greenhouse gas abatement costs or on the global economic, environmental, and social impacts of emitting a marginal ton of greenhouse gas emissions into the atmosphere, utilizing a range of appropriate discount rates, including a rate of zero.
      3. In developing the social cost of carbon, the department shall consider prior or existing estimates of the social cost of carbon issued or adopted by the federal government, appropriate international bodies, or other appropriate and reputable scientific organizations.

Therefore, it is entirely fair to use it as a metric to determine if the investments made from carbon pricing income are cost effectively reducing CO2.  I believe New York will base their carbon pricing on a $50 global social cost of carbon at a 3% discount rate so that is the cost benefit effectiveness threshold metric I will use.

NYSERDA RGGI Program Status

The key table in the Status Report is Table 2 Summary of Expected Cumulative Annualized Program Benefits through 31 December 2018.  It provides costs, energy savings, electricity savings or renewable energy production, greenhouse gas emission savings and the calculated cost benefit ratio.  The $/ton reduced metric is presented on an annual basis and as expected lifetime savings.  For the purpose of this post I use the annual numbers because all the reduction targets are based on an historic annual level (usually 1990).  In order to have an appropriate comparison it has to be annual to annual.

The NYSERDA RGGI Status Report Table 2 – Ranked Cost Benefit Ratio Datatable lists all the programs in the NYSERDA report ranked by the annual cost benefit ratio with just that parameter.  It lists 19 programs with associated CO2 reduction benefits and another 18 programs with no claimed CO2 reductions.  None of the 19 programs with CO2 reduction benefits meets the $50 SCC metric for cost effective investments.  Clearly the 18 programs with no claimed reductions would not be able to meet the metric either.

I prepared a brief summary overview of each of the programs in NYSERDA RGGI Program Cost Effectiveness  After reading the report and summarizing them for the overview I am not impressed and in fact I question the results.  The most cost-effective program, Multifamily Performance Program Assessments in the Green Jobs Green New York sector, had a cost effectiveness value of $58/Ton CO2e.  The program provides financing and co-funding for comprehensive energy assessments and the development of an Energy Reduction Plan, serving market-rate and low- to moderate-income residential buildings with five or more units to increase adoption of clean energy in NYS. Accomplishments.  According to the summary table, they managed to do a total of 316 assessments through December 2018 that resulted in 61,795 residential units served with installed measures for a cost of $3.3 million in “total incentives” and another $1.4 million in “total associated costs”.  Summing the incentives and associated costs and dividing by the 61,795 residential units yields $76.06 per unit.  The summary indicates that this is the cost the comprehensive energy assessment and development of a reduction plan and that rate per unit is reasonable.  But this also means that the actual costs to implement the energy reduction are not included.  So how did NYSERDA claim any CO2 reduction benefits and what are the chances that the actual CO2 reductions were double-counted?

There is another concern. A quick perusal of the programs listed with no reduction benefits demonstrates justifiable cynicism of yet another government program controlled by politicians.  The programs range from practical to clear pork barrel.  New York wants to be able to track emissions from generation sources within the State and from imported sources to create “tradable generation attribute certificates”.  Rather than fund this through the general fund it is easy to justify this as a necessary expense for these funds.  The research projects are another segment of funding where there is a justifiable rationale for funding projects that have no reduction benefits short-term because they could lead to long-term reductions.  At the extreme of clearly unjustified funding is the Brookhaven National Laboratory Ion Collider.  I have no idea the tortured logic that was used to justify spending any RGGI funds on this.

Conclusion

Advocates for carbon pricing schemes assume that the investments from the proceeds are worthwhile.  I think these results and the results from New York’s Clean Energy Dashboard demonstrate that is not the case.  The Regulatory Analysis Project (RAP) study: Economic Benefits and Energy Savings through Low-Cost Carbon Management notes that “Many advocates of carbon pricing begin with the proposition that the main point is to charge for carbon emissions “appropriately” and that carbon reductions will surely follow in the most efficient manner. While carbon pricing is a useful tool in the fight against climate change, there is now substantial experience to suggest that wise use of the resulting carbon revenues is equally important, or even more important, if the goal is to actually reduce emissions at the lowest reasonable cost.”

The other concern is the cost of the New York program relative to the social cost of carbon. The NYSERDA RGGI Status Report does not include a single program that reduces carbon dioxide more cost efficiently than $50 per ton.  Because I have shown that eliminating New York CO2 emissions that would provide a reduction, or a “savings,” of approximately 0.0026°C by the year 2050 and 0.0054°C by the year 2100.  Because you cannot measure that small a temperature difference there will be no tangible benefit of the CLCPA.

My primary concern with New York’s clean energy mandates is the cost.  If the cost is small then signaling New York’s virtue might have value. According to the Clean Energy Dashboard, New York has invested $1,051,359,837 through the third quarter of 2019 but can only claim 3,057,131 tons of reductions giving a CO2 invesment efficiency of $343.90 per ton of CO2 equivalent reduced.

It is not clear how advocates of these programs can justify the costs given these results.  The cost efficiency does not even approach the supposed appropriate cost of carbon dioxide and the there is no tangible expected change to global warming.