My Comments on New York Carbon Pricing 3

New York’s energy planning process continues its efforts to meet the aggressive goals of a remodeled energy system that relies on renewable energy. The latest boondoggle in that effort is a plan to price carbon in the wholesale electric market. I have posted on previous submittals here and here.  The following is the comment that I submitted to the State on March 29 2018.

These comments are submitted as a private retired citizen. They do not reflect the position of any of my previous employers or any other company I have been associated with, these comments are mine alone. I am motivated to submit these comments so that there is at least one voice of the unaffiliated public whose primary interest is low rates and an understanding of the basis of the rationale for a carbon price. New York State energy planning based on the Reforming the Energy Vision goal to change the energy system of New York to reduce greenhouse gas (GHG) emissions 80% from 1990 levels by 2050 is trying to choose between many expensive policy options like pricing carbon in the electric sector while at the same time attempting to understand which one (or what mix) will be the least expensive and have the fewest negative impacts on the existing system. If we make a good pick then we’ll spend the least amount of a lot of money, but if we get it wrong we will be left with lots of negative outcomes and even higher costs for a long time.

These comments are being submitted before the carbon charge setting and adjustment topic is discussed in April. The basic rationale of this policy to price carbon to offset the cost of its impacts hinges on the Social Cost of Carbon value used. I believe it is unfair and inappropriate to determine its viability based on the use of a single value so I recommend using a range and this comment provides further justification for alternative values.

I previously submitted two comments on this initiative. I have recommended that the carbon pricing initiative consider a range of SCC values including the proposed value and the values included in the Regulatory Impact Analysis for the Review of the Clean Power Plan: Proposal. In my other submitted comments I noted that there are serious issues with only including the electric sector. I noted that there are barely enough electric sector emissions available to meet the 2030 goal and nowhere near enough for the 2050 goal. Because the proposed carbon tax is on only one sector of the economy, the overall goal of carbon reductions could fail simply because driving up the price of electricity makes the conversion to electric based residential heating and transportation more difficult.

Because of the importance of the SCC on the very basis of this initiative, this comment provides another reference documenting the weaknesses of its use. I endorse the findings of Climate Change, Catastrophe, Regulation and the Social Cost of Carbon by Julian Morris as representing my views on the use of the SCC in this matter.

Julian Morris on the Social Cost Carbon

In the following section I only edit the summary of the analysis as published at the Reason Foundation for use in this comment. I refer the reader to the reference for the supporting graphs and figures and recommend reading the full document.

Federal agencies are required to calculate the costs and benefits of new regulations that have significant economic effects, but initially, different agencies applied different SCCs. To address this problem, the Office of Management and Budget and Council of Economic Advisors organized an Interagency Working Group (IWG) to develop a range of estimates of the SCC for use by all agencies. However, the IWG’s estimates were deeply flawed. In April 2017, President Trump issued an executive order rescinding the IWG’s estimates and disbanded the IWG. The question now is what value regulatory agencies should use for the SCC—if any—when evaluating rules that affect greenhouse gas emissions.

Mr. Morris writes that:

Most analyses of the social cost of carbon, including the IWG’s, have utilized “integrated assessment models” (IAMs), the basic methodology of which involves the following six steps:

  • Develop (or choose from existing) scenarios of future emissions of GHGs;
  • Use those scenarios to estimate future atmospheric concentrations of GHGs;
  • Project changes in average global temperature and/or climate resulting from these future atmospheric GHG concentrations;
  • Estimate the economic consequences of the resultant changes in temperature/climate;
  • Estimate the costs of abating specific amounts of GHG emissions;
  • Combine the estimates from steps 4 and 5 to produce an assessment of the net economic effect of different scenarios and thereby identify the optimum path of emissions.

Each step in this process is fraught with difficulty:

  1. Future emissions of GHGs are unknown—and unknowable—but likely lower than assumed in most IAMs.

Future human-related emissions of GHGs will depend on many factors, especially: the human population, the extent and use of technologies that result in energy consumption, the types of technology used to produce energy, and the efficiency with which technologies use energy.

None of these factors can be forecast with any precision. Predicting future technologies is particularly challenging. However, greenhouse gas emissions from U.S. sources have declined from their peak, mainly as a result of using more energy-dense, lower carbon fuels (and by using energy more efficiently. Global emissions are rising but at a declining rate, in spite of robust economic growth. If these trends continue, future concentrations of greenhouse gases are likely to be at the low end of estimates used by the IWG when calculating the SCC.

  1. The relationship between emissions and concentrations of greenhouse gases is complicated.

Calculating future atmospheric concentrations of GHGs, based on estimates of future human emissions, requires knowledge of the length of time that these GHGs will remain in the atmosphere. That, in turn, requires knowledge about the rate at which they will break down and/or be absorbed. This is no simple task. The rate at which GHGs such as methane and dinitrogen monoxide break down depends on such things as temperature and the amount of water vapor and other chemicals in the atmosphere with which they might react. The rate at which CO2 is taken up by plants, soil and oceans varies considerably depending on factors such as temperature and the availability of nutrients. The dynamic and interactive nature of these effects complicates the picture further.

  1. The climate is likely much less sensitive to increased emissions of GHGs than has been presumed in most IAMs, including those used by the IWG.

Early estimates of the sensitivity of the climate to increased concentrations of greenhouse gases found that a doubling of atmospheric carbon dioxide would result in a warming of between 1.5°C and 4.5°C, with a “best guess” of 3°C. But those estimates were based on poorly specified models. Tests of models using those estimates of climate sensitivity predict about twice as much warming as actually occurred. Nonetheless, the IWG used those early, inaccurate estimates. More recent estimates of climate sensitivity suggest that future emissions are likely to result in much more modest warming of the atmosphere (with a doubling of carbon dioxide concentrations resulting in a warming of 1.5°C or less).

  1. The effects of climate change are unknown—but the benefits may well be greater than the costs for the foreseeable future.

If the recent lower estimates of climate sensitivity are correct and emissions follow a relatively low path, warming will likely be modest and its effects mild. Likely effects include:

  • Warming will be greater in cold places (i.e. farther from the equator), seasons (winter), and times (night) than in warm places (equatorial regions), seasons (summer) and times (day).
  • At higher latitudes, winters will be less extreme.
  • Precipitation will increase, but not everywhere, and some places will become drier.
  • Sea levels will continue to rise slowly, as the oceans expand and land-based glaciers melt. (If current trends continue, sea level will rise by about 11 inches by 2100.)
  • The incidence of extreme weather events will not change dramatically.

While increased temperatures in warm places and seasons may result in higher mortality among those who are less able to cope with higher temperatures, warmer winters will reduce the number of people who die from cold. Since 20 times as many people currently die from cold as die from heat, modest warming will reduce temperature-related deaths. These effects will be tempered by the use of heating and cooling technologies, but the costs of additional cooling will be more than offset by reduced expenditure on heating.While rising temperatures have the potential to increase the incidence of some diseases, such as diarrhea, these effects are likely to be moderated by the adoption of better technologies, including piped clean water and sewerage.

Increased concentrations of carbon dioxide and higher temperatures are likely to increase agricultural output in many places. While agricultural output may fall in other places, this effect is likely to be moderated by the adoption of new crop varieties and other technologies. On net, crop production is likely to rise in the U.S. and globally.

Many economic models of climate change, including two of the three IAMs used by the IWG assume very limited adaptation. Yet the history of human civilization is one of adaptation. Food availability per capita and access to clean water have risen dramatically over the past half-century, reducing malnutrition and water-borne diseases and increasing life expectancy. Rising wealth and the adoption of new technologies have reduced mortality from extreme weather events by 98% in the past century. It seems highly likely that continued innovation and more widespread adoption of adaptive technologies will continue to reduce mortality, mitigating most—if not all—the adverse consequences of rising temperatures.

  1. The costs of reducing future emissions of GHGs are unknown—and will depend very much on the extent and timeframe of any reduction.

Proponents of taking action now argue that any delay would increase the total cost of emissions reductions—because baseline emissions (i.e. the emissions that would occur without any mandated reductions) would be higher and the size of any such future reduction would have to be greater. But such arguments presume both significant increases in baseline emissions and a need dramatically to reduce such emissions. If the trends in technology identified earlier do continue, growth in baseline GHG emissions will continue to slow and in the longer term may even fall without any government mandates. Indeed, it is possible that baseline emissions in the future (i.e. after 2050) will be consistent with a pathway of emissions that results in atmospheric GHG concentrations that generate net benefits.

Even if baseline emissions rise to a level that justifies intervention in the future, that does not necessarily justify reducing emissions now. Humanity currently relies predominantly on carbon-based fuels for energy generation, and the costs of alternative sources of energy are in most cases relatively high. (If alternative sources of energy were less expensive, then it would make economic sense to adopt them.) Continued innovation will almost certainly result in lower emissions per unit of output in the future, so the costs of reducing a unit of GHG emissions in the future will be lower than they are today.

  1. When combining benefits and costs, the IWG used inappropriately low discount rates, giving the false impression that the benefits of reducing emissions are greater than the costs. At discount rates that reflect the opportunity cost of capital, the current costs of taking action to reduce GHG emissions now and in the near future are almost certainly greater than the benefits.

OMB guidelines state that, for the base case, “Constant-dollar benefit-cost analyses of proposed investments and regulations should report net present value and other outcomes determined using a real discount rate of 7%. This rate approximates the marginal pretax rate of return on an average investment in the private sector in recent years.”

Unfortunately, when discounting the benefits and costs associated with global warming, many analysts have used discount rates that do not reflect the opportunity cost of capital. For example, the IWG provided an estimate of the SCC at a 5% discount rate, but it is the highest rate given. In its guidance, the IWG emphasized the SCC calculated at a 3% discount rate. Its rationale for using the lower rate is that future benefits from avoiding climate change costs relate to future consumption, rather than investment. Policies to address climate change would affect both consumption and investment, but for the purposes of evaluation what matters is the effect on investment, since it is the effect of policies on investment decisions that will determine rates of innovation and hence economic growth, the ability to adapt to climate change, and future consumption. In other words, while future consumption is of primary concern, due to its relationship to human welfare, return on investment is the key factor determining future consumption. Thus, the appropriate discount rate is the rate of return on capital.

Changing the Assumptions

Changing the assumptions made in the IWG’s models can have a dramatic effect on estimates of the SCC. Anne Smith and Paul Bernstein of National Economic Research Associates ran the IAMs used by the IWG making four changes:

  1. They changed the emissions scenario to reflect more realistic assumptions regarding the relationship between emissions and economic growth;
  2. They changed the time horizon from 2300 to 2100;
  3. They changed the discount rate from 3% to 5%;
  4. They changed the scope from global to U.S. only.

When all these changes were combined, the effect was to reduce the SCC by 97%, from $43 to about $1.30. Smith and Bernstein’s analysis did not change any assumptions regarding climate sensitivity or other relevant climate parameters that might have been misspecified in the IAMs used by the IWG. Kevin Dayaratna, Ross McKitrick and David Kreutzer assessed the effects of using more-recent empirical estimates of climate sensitivity to calculate updated SCC estimates using two of the IWG models. They found that, for one model, the average SCC fell by 30%–50% and for the other it fell by over 80%. Moreover, at a 7% discount rate, one of the models generated a negative SCC.

If all of the adjustments made by Smith and Bernstein were combined with those made by Dayaratna et al. it seems likely that the SCC would fall to well below $1. Indeed, given uncertainties in the various parameters used, it seems difficult to avoid the conclusion that for practical purposes the SCC is effectively $0.

What About Catastrophic Climate Change?

Some economists have objected that conventional measures of the SCC fail adequately to account for the possibility of catastrophic climate change. However, such criticisms are based on assumptions concerning the probability of catastrophe that have no empirical basis. A recent attempt to estimate the SCC by surveying experts to find out what they would be willing to pay to avert catastrophe is so riddled with defects as to be of no utility.

Caiazza Conclusions

As Mr. Morris notes “The question now is what value regulatory agencies should use for the SCC—if any—when evaluating rules that affect greenhouse gas emissions.” I do not believe that this proceeding is an appropriate place to determine the most appropriate single value of the SCC to use. However, it would be clearly appropriate to consider a SCC range not only because there are technically justifiable differences in the key input assumptions but also because the SCC value originally proposed for this program was based on the flawed Obama Administration IWG assumptions that did not follow OMB guidance on the use of discount rates.

The analysis by Mr. Morris concludes that “it seems difficult to avoid the conclusion that for practical purposes the SCC is effectively $0.” Therefore, I recommend that this initiative determine what SCC value represents a breakeven point for implementing this program. It is only possible for policy makers to appropriately implement this initiative if they understand there is a reasonable and justifiable range of potential costs of carbon on society. The basic rationale of this policy hinges on the SCC value used and it is unfair to determine its viability based on the use of a single value.

Carbon Price SCC Value Recommendation

I recommend that the carbon pricing initiative consider a range of SCC values including the proposed value in the Brattle Report entitled Pricing Carbon into NYISO’s Wholesale Energy Market to Support New York’s Decarbonization Goals, the values included in the Regulatory Impact Analysis for the Review of the Clean Power Plan: Proposal, and because Climate Change, Catastrophe, Regulation and the Social Cost of Carbon concludes that “it seems difficult to avoid the conclusion that for practical purposes the SCC is effectively $0” that the breakeven point be calculated where the calculated value of the social cost of carbon benefit out-weighs the costs of a price on carbon.

Page 22 Pricing Carbon into NYISO’s Wholesale Energy Market to Support New York’s Decarbonization Goals Section V. Market Design Issues with a Carbon Charge, A. Establishing the Appropriate Carbon Price and Adjustments Over Time:

The first option is to set the carbon charge at the value New York ascribes to carbon abatement. The New York NYPSC has adopted using the SCC as estimated by the U.S. Interagency Working Group on the Social Cost of Carbon. The SCC serves an estimate of the damages associated with an incremental increase in carbon emissions. Specifically, the NYPSC has tied ZEC payments to the SCC, starting at $43/ton CO2 today and rising to $65/ton by 2029.

Page 44 Regulatory Impact Analysis for the Review of the Clean Power Plan: Proposal in section 3.4.1. Estimating Forgone Domestic Climate Benefits

Table 3-7 presents the average domestic SC-CO2 estimate across all the model runs for each discount rate for the years 2015 to 2050. As with the global SC-CO2 estimates, the domestic SC-CO2 increases over time because future emissions are expected to produce larger incremental damages as physical and economic systems become more stressed in response to greater climatic change, and because GDP is growing over time and many damage categories are modeled as proportional to gross GDP. For emissions occurring in the year 2030, the two domestic SC-CO2 estimates are $1 and $7 per metric ton of CO2 emissions (2011$), using a 7 and 3 percent discount rate, respectively.

For emissions occurring in the year 2015, the two domestic SC-CO2 estimates are $1 and $5 per metric ton of CO2 emissions (2011$), using a 7 and 3 percent discount rate, respectively.

Smithsonian Capture the Sun Harness the Wind

I am so tired of the Smithsonian’s unquestioning devotion of renewable energy in spite of obvious warning signs that I wrote a letter to the editor. In the April 2018 Smithsonian there is an article entitled “The Future’s so Bright (He’s Gotta Wear Shades)” by Dan Solomon and a related graphic article “Capture the Sun, Harness the Wind” by 5W Infographics. These articles are essentially puff publicity pieces for the renewable energy industry that clearly shows the bias in Smithsonian on renewable energy. Nonetheless they cannot escape inconvenient facts.

The most obvious problem with Solomon’s article on the bright future of renewable energy in Georgetown Texas is that renewable energy looks great for the early adopters but the reality of a 100% reliable electric system lies beneath that success. The situation is exactly the same as a pyramid scheme where the first ones in reap benefits. When Solomon’s article notes that “about 2% of the time the Georgetown utility draws electricity derived from fossil fuels”, an unbiased article would have followed up on the implications of that. The primary support for the fossil fuels necessary to keep Georgetown lights on comes from everybody else. As more rent-seekers pile onto the renewable energy bandwagon pyramid the costs necessarily increase for those on the outside. As you dig deeper it becomes apparent that price support for the rest of the electric system not only becomes more likely but because solar and wind don’t support grid services it becomes increasingly likely that another layer of support has to be added at some point over 30% renewable penetration. At this time Georgetown is not paying for that.

The first graph in the graphic article shows “The comparison to coal” which charts the 2016 actual coal and renewable sources electricity generation and projects changes in their use out to 2050. Comparing the 2016 coal use of 1,216 billion kwhr and 573 billion kwhr renewable source estimate of 573 with EIA numbers shows that those numbers are close enough to not quibble. However, the title of the article refers to sun and wind and the electricity generation in those categories is lumped together with hydro, biomass, geothermal, and other gases. As far as I can tell solar and wind account for less than half of the 573 billion kwhr number. On the other hand most of the future renewable growth will occur in the wind and solar sectors but the graphic does not provide that information. Neither article mentions just how much wind and solar generation will be needed to meet the projected 2050 number.

Another graphic notes that 800 MW of energy storage were built in the United States in the last five years and expects that amount will be built in just 2020. The important number is how many MW hours will be available from the energy storage built because that defines how much storage will be available to counteract renewable’s intermittency. Solomon’s article also did not address how much storage would be needed for Georgetown to get off the grid. Neglecting to point out that because intermittent renewables struggle to generate power over a third of the time we will likely have to over-build renewable capacity and add massive amounts of energy storage biases the renewable argument.

One of the inconvenient facts illustrated but not noted in the graphic article is jobs per energy produced. If you divide the number of coal-industry employees in 2016 into the total coal generation you get 24.3 million kWh produced per employee. If you divide the sum of the solar and wind employees in 2016 into half of the reported renewable sources generation you get 0.8 million kWh produced per employee. Coal is 30 times more man-power efficient. While that may be good for employment it does not portend well for cost.

Other than the fact that the duck curve is graphically interesting I am not sure why that was included in the graphics article. More importantly it illustrates a problem. When you have large amounts of solar on the system something has to be available to make up for the evening demand. That is where storage becomes necessary. In order to keep the lights on you also need enough storage to cover those days when there isn’t any sun. Dale Ross’s flippant we are in West Texas so “Cloudy, Really?” comment aside a quick check of the climatological data indicates that it is mostly cloudy 28% of the time in Georgetown. Obviously despite the claim that Georgetown is powered entirely by renewable energy the fact is that is not true.

The Solomon article has multiple instances of conveniently neglected facts to make the story. It notes that the City was able to get guaranteed rates of 20 years for wind power and 25 years for solar power. It would have been appropriate to note that these types of facilities have very little operational experience that long so the guarantees might not be as iron-clad as implied. Solomon quotes Adam Schultz as saying that solar and wind have gotten so much cheaper that “I can’t even tell you the costs because costs have been dropping so rapidly”. If that is the case then why do both solar and wind need direct subsidies? Finally, blowing off the environmental impact of renewables on birds by saying that more birds are killed by cats and buildings reminds me of the two wrongs don’t make a right parable. Furthermore, what about the bats and just how many raptors are killed by house cats? The fact is that because renewable energy is diffuse, wildlife issues are a legitimate concern.

Those are the superficial errors illustrating biases. The reality is that because wind and solar are diffuse the electric grid is essential for keeping the lights on. Digging down into this problem is more complicated but necessary for the complete unbiased story of renewables. I recommend this post by Planning Engineer at the Climate Etc. blog for an overview of the transmission planning difficulties raised by wind and solar energy. In brief, the modern power grid is a connected complex machine that balances various electrical and mechanical properties over thousands of miles. The system must be stable that is to say stay in synchronism, balance loads and generation and maintain voltages following system disturbances. The grid is built upon heavy rotating machinery at hydro, nuclear, and fossil-fired generating stations that provides that stability. Wind and solar power do not provide any stability support. Up to some point the present day grid is resilient enough to overcome that problem but at some point it has to be addressed. I don’t doubt that it can be addressed successfully but the costs necessary to do that are unknown and were certainly not a consideration in either article.

The reality of solar and wind renewable power not addressed in this article is that it is likely only to completely supplant fossil fuels in limited locations where both solar and wind potential are high, industrial load requirements are negligible, and the weather is mild in the winter because both resources are intermittent and diffuse. Texas has large wind and solar resources because of geography and because it is so large there is enough space to generate significant amounts. Georgetown TX does not have heavy industry that requires high amounts of electricity constantly so they can pretend to be powered entirely be renewable energy. Finally, Georgetown does not have to contend with winter impacts of higher latitudes particularly home heating. The solar resource is much reduced simply because the days are shorter but you must also consider reductions due to snow covered rooftop solar cells.

Climate Ambition Must Confront Energy Realities

Sean Sweeney recently authored an intriguing article entitled “A Bridge to Somewhere? Progressive Democrats’ “Climate Ambition” Must Confront Energy Realities”.   This post addresses an unexpected agreement on some aspects for two individuals from opposite ends of the climate change debate.

Sean Sweeney is director of the International Program for Labor, Climate and Environment at the Murphy Institute at City University of New York, and coordinator of Trade Unions for Energy Democracy. His article published in the New Labor Forum mentions deniers in the first paragraph and states that the 2017 hurricane season was severe enough to “warrant climate change to be declared a national emergency?” At the other end of the spectrum when I look at a papers based on actual data I find that “since 1900 neither observed continental United States landfalling hurricane frequency nor intensity show significant trends, including the devastating 2017 season.” As a result I do not believe that climate change is a national emergency.

Nonetheless we find common ground. I agree with Sweeney that “the more ambitious the targets, the harder it is to answer questions about how they will be reached.”

Sweeney describes two bills introduced in Congress in 2017 that represent progressive Democrats’ climate ambition. A Senate bill introduced in April 2017 by Senators Jeff Merkley, Bernie Sanders, and Ed Markey. It calls on the United States to transition 100 percent off of fossil fuels by 2050. The “100 × 50” Act would impose new federal mandates requiring “zero carbon” vehicles, while barring federal approval of oil and gas pipelines. The House bill, submitted by Tulsi Gabbard on September 7, 2017, along with six other representatives seeks to end fossil-fuel use in the United States as early as 2035—a full fifteen years earlier than the 2050 target date proposed by Sanders and Merkley. Titled “Off Fossil Fuels for a Better Future Act” (OFF Act) would also mandate the United States to transition to 80 percent clean renewable energy by 2027 and 100 percent by 2035.

Both bills mandate moratoria on any new coal, oil, and gas projects (extraction and infrastructure, including power plants, pipelines, and export terminals). Sweeney and I agree that these are ambitious goals. I agree with him when he states “Ambition surely has its place, but committing to a crash diet on the morning of January 1 is one thing, being fifty pounds lighter in time for the July 4th weekend is something else altogether.” I also agree that with him when he notes that “the difference between aspirational targets and actual accomplishments is not always acknowledged by leading green nongovernmental organizations (NGOs).” I believe he is also correct when he notes that “Mandating electricity retailers to source 80 percent of their power from renewables does not answer the question how that power might be produced, integrated into the grid, or who will do the work.” As noted on my other blog, the aspirational plans to reduce New York State emissions certainly signal the virtue of the Governor of New York but it is not at all clear how those plans will be implemented, whether anyone is looking to see if there are unintended consequences between competing components of the plan, and, most importantly in my mind, how much will they cost.

Despite our agreement on this aspect I cannot overstate how much I disagree with his statement that those two climate bills are “informed by the core findings of the scientific community”. These targets are arbitrary, reflect a mis-reported 97% consensus and the idea that a portion of the scientific community funded to the tune of over $2.5 billion dollars in 2016 would come up with any conclusion other than “it is a problem and you need to fund us more” is naïve. I agree with Dr. Judith Curry “we do not know how much humans have contributed to the recent observed warming and there is disagreement among scientists as to whether human-caused emissions of greenhouse gases is the dominant cause of recent warming, relative to natural causes.” As a result I do not support mitigating greenhouse gas emissions.

Finally, Sweeney states that “If either bill became law, it would amount to a declaration of war on fossil-fuel interests, because much of the present-day stock market value of coal, oil, and gas companies is based on their below-the-ground reserves.” While I agree that this would be a declaration of war on fossil-fuel companies, I think it represents a much bigger target. I believe that fossil fuels have been one of the greatest things to happen to mankind. Until there are in-kind, same price replacements for the ubiquitous use of fossil fuel in society this targets the way of life of everyone. There is a massive lack of understanding relative to what keeps the lights on and enables our affluent and mobile lifestyles. Once you understand that cutting CO2 to the levels proposed will be extraordinarily difficult it is clear that it will be expensive and it is going to affect our lifestyle. For example, electrification of the transportation and residential heating sectors will be required. Sponsors of these bills owe it to their constituents to explain just how expensive it will be and what will have to change in our lifestyle.

Indian Point Replacement Power – NYISO Official Conclusion

I just became aware of a report by the New York Independent System Operator (NYISO) entitled Generator Deactivation Assessment, Indian Point Energy Center dated December 13, 2017 that is the official response to the question of replacement power for the retirement of Indian Point. This post compares their conclusions with my guesses in earlier posts.

In January 2017 New York’s Governor Andrew Cuomo announced the closure of Entergy’s Indian Point Energy Center (IPEC) located 25 miles north of New York City by April 2021. Cuomo claims that Indian Point produces 2,000 megawatts of electrical power and that “more than enough replacement power to replace this capacity will be available by 2021”. Since that announcement NYS agencies have been analyzing the potential impacts of the shutdown and the NYISO study summarizes their evaluation of the Entergy deactivation notice for IPEC. Entergy reported that it intends to deactivate the 1,299 MW unit 2 on April 30, 2020 and the 1,012 MW unit 3 on April 30, 2021.

NYISO Conclusions

As required by their rules, NYISO performed an analysis of resource adequacy and, in coordination with New York Transmission Owners, transmission security analyses of the New York Control Area to determine whether shutting down IPEC would cause problems with their standards for reliability and capacity. The conclusion was that subject to the assumptions of the study there would be no violations of their standards so “Entergy has satisfied the applicable requirements under the NYISO’s Generator Deactivation Process to retire the Generators on or after its requested deactivation date”.

NYISO assumed that three major generation facilities currently under construction would be available in the base case for this assessment that impact the findings: Bayonne Energy Center II Uprate (Zone J, 120 MW), CPV Valley Energy Center (Zone G, 678 MW), and Cricket Valley Energy Center (Zone G, 1,020 MW). All three are natural-gas fired combustion turbines. The assessment found that “reliability criteria would be met without Indian Point Energy Center throughout the Study Period under the assumed and forecasted base case system conditions.”

In addition, NYISO performed a scenario assessment to evaluate the reliability of the system without those three generation facilities. That scenario concluded “These scenario results demonstrate that, without the expected new generation facilities currently under construction, additional replacement sources of power would be necessary to maintain reliability following deactivation of IPEC.” They noted that “Resource needs could potentially be met by combinations of solutions including generation, transmission, energy efficiency, and demand response measures” and estimated that generic addition of at least 200 MW by 2023 anywhere in the Lower Hudson Valley would resolve the deficiency through a five-year horizon and that to address the deficiency through 2027, additional resources would range from 400 MW to 600 MW depending on type and location of the resources within the Lower Hudson Valley.

My Analyses

I prepared four previous posts on Indian Point replacement power. The first and a subsequent update considered New York State projects that had been permitted to see if there was replacement power in the pipeline that could replace its output. I also analyzed whether renewables and energy efficiency were a realistic alternative and concluded that approach was unlikely to succeed. Finally, I looked at a proposal from the New York Battery and Energy Storage Technology Consortiums to use energy storage as a potential replacement for Indian Point. I concluded that this would also not likely succeed.

Ultimately my conclusion that CPV Valley Energy Center, Cricket Valley Energy Center and the proposed Champlain Hudson Express transmission project could provide replacement power for IPEC is very similar to the NYISO conclusion that CPV Valley Energy Center, Cricket Valley Energy Center and the Bayonne Energy Center II Uprate project could provide the replacement power. The only difference is that my replacement scenario did not export jobs from New York to New Jersey and including the transmission project that uses hydro power from Quebec would have lower emissions. In either case, Cuomo’s claim that there would be no net increase of emissions due to the closure is flat out wrong.

The NY Riverkeeper blog claims that the three gas plants are not needed to replace IPEC. That post seizes on the alternative scenario that concludes that: “resource needs could potentially be met by combinations of solutions including generation, transmission, energy efficiency, and demand response measures.” In addition to my criticisms of their preferred alternatives in my previous posts, there is a timing issue. The plan is to deactivate one unit on April 30, 2020 and the other on April 30, 2021. No significant generation facilities can get through the NYS Article Ten permitting process in less than five years so alternative resources would not be available for the proposed shutdown schedule.

New York State Comments on the Clean Power Plan – February 2018

Officials from twelve states including New York submitted a comment labelled as State Environmental and Energy Regulators’ Comment on Advance Notice of Proposed Rulemaking, Docket ID No. EPA-HQ-OAR-2017-0545 on February 26, 2018. The comments, facilitated by the Georgetown Climate Center, were from: California, Connecticut, Massachusetts, Minnesota, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, and Washington. The letter discusses the need to reduce emissions of the greenhouse gases that cause climate change and this post reviews their rationale for that need.

EPA requested comments on a proposed rulemaking to revise the Obama-era Clean Power Plan which was a regulation to limit CO2 emissions from power plants. From my pragmatic standpoint the ultimate issue is whether the regulation can actually impact the purported effects better than an alternate response.

The comment starts as follows:

We are environmental and energy regulators from a group of 12 states, and we are providing comment on the Environmental Protection Agency’s (EPA) Advance Notice of Proposed Rulemaking on State Guidelines for Greenhouse Gas Emissions from Existing Sources (ANPRM)[1].

We represent states that are already suffering the economic and human consequences of climate change, and that are leaders in working to reduce the emissions that cause it. Extreme weather events in recent years have continued to cause record damages that disrupt state economies and require years for recovery. For example, in 2017 California experienced almost twice as many wildfires burning six times as many acres as the average over the last five years[2], and these fires were among the deadliest in the state’s history, killing a total of 47 people[3]. The National Oceanic and Atmospheric Administration (NOAA) estimates that Hurricane Sandy caused damages of over $70 billion, and projected damages from Hurricane Harvey total $125 billion[4]. With over $300 billion in estimated losses from disaster events in 2017, last year was by far the costliest year for climate and weather related events, and it also tied the record for the number of billion-dollar disaster events in a single year[5]. Our states are working to reduce harmful climate pollution individually and jointly. Minnesota’s GDP grew by 23.1 percent between 2000 and 2014, while its emissions decreased by 3.6 percent[6]. North Carolina’s Renewable Energy and Energy Efficiency Portfolio Standard has resulted in investments of over $10 billion in clean energy technologies[7], created 34,000 clean energy jobs,[8] and reduced CO2 emissions by 14.6 percent between 2004 and 2014[9]. Since the launch of the multi-state Regional Greenhouse Gas Initiative, carbon emissions from power plants in the region have decreased by 40 percent[10]. EPA should act urgently to reduce the risk to American citizens from further climate impacts, and should take into account the methods our states have already proven as effective and affordable in reducing carbon pollution.

My problem with this rationale is that it only lists a series of weather events but does not explain how much of the observed events are the result of climate change and, therefore, could be affected by the control program they support. Ultimately, the alleged effects of human impacts on climate are not creating new weather-related hazards. Climate change could make weather hazards more frequent and more intense but will not prevent them from occurring in the future.

Consider, for example, the statement “projected damages from Hurricane Harvey total $125 billion”. Hurricane Harvey was “A category 4 hurricane (on the Saffir-Simpson Hurricane Wind Scale) before making landfall along the middle Texas coast. The storm then stalled, with its center over or near the Texas coast for four days, dropping historic amounts of rainfall of more than 60 inches over southeastern Texas.” “Harvey was the most significant tropical cyclone rainfall event in United States history, both in scope and peak rainfall amounts, since reliable rainfall records began around the 1880s”. Not surprisingly with this much rain there was catastrophic flooding and the fact that it happened over the major metropolitan area of Houston made it very costly.

The comment letter states “Extreme weather events in recent years have continued to cause record damages that disrupt state economies and require years for recovery” and uses the very large damage estimate as an example. Not addressed was whether climate change affected the rainfall and thus the damage.

In the first place, using damage estimates is a weak argument for climate change affecting Harvey. If the storm had not stalled over Houston there would have been much less to damage and the costs would have been lower. A recent paper makes the point that “Growth in coastal population and regional wealth are the overwhelming drivers of observed increases in hurricane-related damage”. The paper also shows that there has been no significant change since 1900 in hurricanes that land in the United States for frequency or intensity. So the real argument that the state comments should have made is that Hurricane Harvey itself was affected by climate change.

There are a couple of analyses that do claim that Harvey rainfall was affected by climate change. A team of scientists from World Weather Attribution claimed that human-caused climate change made the record rainfall that fell over Houston during Hurricane Harvey roughly “three times more likely and 15 percent more intense”. Another paper suggests that the annual chance of at least 500 mm (20”) of rain over Texas like that seen from Hurricane Harvey would increase from about 1% between 1981-2000 to 18% by the end of the 21st Century and concludes that the risk from a Harvey event has already increase six-fold in 2017 (a 6% chance of occurrence yearly) versus that from just a couple decades ago.

Both of these analyses use output from dynamical weather forecast models to project the effect of climate change. The theory is that a warmer atmosphere can hold more moisture so rainfall rates would be more intense. Landsea references a study that explains “Theory suggests that the amount of rainfall in the tropical latitudes would go up about 4% per deg F sea surface temperature (7% per deg C). Climate models forced by assuming continued emissions of greenhouse gases suggest around 2-2.5 deg F (1-1.5 deg C) warming by the year 2100, or about 10% more tropical rainfall. Landsea then notes:

Scaling the results from both theory as well as climate model projections suggest, then, that roughly 3% of hurricane rainfall today can be reasonably attributed to manmade global warming. This value is a rather tiny contribution. Thus only about 2” (50 mm) of Hurricane Harvey’s peak amount of 60” (1525 mm) can be linked to manmade global warming.

Landsea goes on to explain why he does not consider the other results reliable. I prefer to use all the results to provide a range of potential outcomes

So even if the State comments had properly considered the real effect of climate change on extreme weather events instead of the inappropriate total cost of a storm, there are a legitimate range of potential outcomes – (15% more intense to 3% more intense). These comments do not provide an appropriate rationale why they believe controls are necessary because they did not provide a science-based argument. Instead they have relied on emotion-based claims of damages without attributing them to climate change impacts.

The Landsea paper lists lessons to be learned from Harvey’s catastrophic flooding that summarize the important points that should be recognized that is written so well I want to include it here:

  1. Hurricanes (and Tropical Storms) have been associated for millenniums with extreme rainfall and freshwater flooding. There is nothing that one can do to prevent these storms from occurring, hitting land, and impacting people;
  2. Massive flooding and catastrophic impact from tropical storms and hurricanes occurs when the system moves slowly over a major city. This is precisely what happened because of Harvey as a tropical storm over Texas;
  3. Flooding is made worse when extreme rainfall occurs over impervious land (such as roads and buildings) and the rain cannot soak in. Land use decisions should better consider allowing building (or rebuilding) in flood prone areas;
  4. Studies should be made to see if evacuating people in advance of extreme flooding rain is feasible. (Currently, only evacuations from hurricanes are primarily issued from possible storm surge – salt-water – flooding. However, because the skill of in day-to-day rainfall amounts and locations continues to improve, it might be feasible to call for limited evacuations in the most vulnerable locations.);
  5. Linking hurricane rainfall to global warming today (and even decades from now) based upon such a tiny contribution is misleading. Moreover, such a fixation can delay steps that can be taken now to better mitigate the effects of extreme flooding from hurricanes. See the following sites for more action today that can be taken: the Federal Emergency Management Agency (FEMA), the Insurance Institute for Business and Home Safety (IIBHS), the Environmental Protection Agency (EPA), and academia (University of Colorado, University of Pennsylvania, and University of Iowa).

Paraphrasing Dr. Landsea, the fixation on reducing greenhouse gas emissions in the Obama-era Clean Power Plan is delaying actions that could and should be done today to mitigate the inevitable catastrophic hurricane damages. The comment letter by these states continues this inappropriate fixation. Moreover, the comments do not provide any indication how much their preferred control options would impact global warming in general or the alleged impacts listed in particular.

[1] 82 Fed. Reg. 61,507 (Dec. 28, 2017).

[2] “Incident Information,” California Department of Forestry and Fire Protection, http://cdfdata.fire.ca.gov/incidents/incidents_stats?year=2017.

[3] California Department of Forestry and Fire Protection, Large Fires 2017: 300 Acres and Greater, http://cdfdata.fire.ca.gov/pub/cdf/images/incidentstatsevents_273.pdf.

[4] Billion-Dollar Weather and Climate Disasters,” NOAA, https://www.ncdc.noaa.gov/billions/events/NY/1980-2017.

[5] Id., https://www.ncdc.noaa.gov/billions/overview.

[6] Devashree Saha & Mark Muro, The Brookings Institution, Growth, Carbon, and Trump: State progress and drift on economic growth and emissions ‘decoupling’ (December 8, 2016), Fig. 3.

[7] RTI International, Economic Impact Analysis of Clean Energy Development in North Carolina – 2017 Update (Oct. 2017), https://energync.org/wp-content/uploads/2017/10/Summary-Findings_Economic-and-Rate-Impact-Analysis-of-Clean-Energy-Development-in-North-Carolina%E2%80%942017-Update-October-Version.pdf

[8] U.S. Climate Alliance, 2017 Annual Report, https://static1.squarespace.com/static/5936b0bde4fcb5371d7ebe4c/t/59bc4959bebafb2c44067922/1505511771 219/USCA_Climate_Report-V2A-Online-RGB.PDF.

[9] North Carolina Utilities Commission, Annual Report Regarding Renewable Energy and Energy Efficiency Portfolio Standard in North Carolina Required Pursuant to G.S. 62-133.8(J) (October 1, 2017), http://www.ncuc.commerce.state.nc.us/reports/repsreport2017.pdf.

[10] “RGGI Emissions Fell Again in 2016,” Acadia Center (March 10, 2017), http://acadiacenter.org/rggi-emissionsfell-again-in-2016/.

Reality Slap to the REV Microgrid Concept

I believe that the Reforming the Energy Vision (REV) call for microgrids will result in the unintended consequence of encouraging the development of natural gas fired combined heat and power units. The most compelling reason is because that approach does not need to include storage in order to provide 24-7 power and any storage component will make that option much more expensive. However that reality does not comport with the dreams of those who believe a no-fossil future is necessary. This brings us to an ideal situation to see how this will be reconciled in New York State.

The ideal candidate for conversion to a combined heat and power unit is an office complex that has a power plant for steam heat and uses grid electricity. The Empire State Plaza in Albany NY is just such a complex. The New York Power Authority (NYPA) has proposed the Empire State Plaza Microgrid and Combined Heat and Power Plant to replace the existing system. However, their rationale ran aground against the idealism of local community members and environmentalists from across the state who assailed NYPA’s plan to replace aging steam turbines in the low-income, predominantly African-American Sheridan Hollow community with two new combined heat and power turbines to provide electricity and steam.

On February 5, 2018 NYPA caved to this pressure and announced that they will do additional studies of the proposed Empire State Plaza Microgrid and Combined Heat and Power Plant project in Albany in order to better evaluate renewable energy options for the project. The press release claimed that:

“This will allow a more comprehensive review of possible alternative energy sources that may be feasible to explore as part of the Sheridan Avenue project to improve reliability, resiliency and energy efficiency at the plaza. The project partners, the New York State Office of General Services and NYPA, will take this time to enlist ongoing engagement and input from members of the public, including local community members, energy experts and advocacy organizations and will incorporate community benefits into the project’s go-forward plan.”

According to slide 8 in the NYPA presentation on the Empire State Plaza CHP and Microgrid Project Overview the Plaza consumes 111,000,000 kWh per year and uses 1,003,084 klbs of steam per year. NYPA proposed two Taurus 70 combustion turbines that will produce more than enough electricity and steam heat to fulfill those needs. The key to the greater efficiency of a combined heat and power facility is that you use the waste heat, in this case to produce steam for heating. The proposed application is ideal because the CHP output can use the existing electrical and steam infrastructure thus saving costs.

According to slide 5 in the NYPA presentation Project Overview Slide 5, NYPA considered and rejected:

  • Solar Photovoltaic
  • Solar Thermal
  • Geothermal
  • Wind Power

Let’s review the feasibility of these alternative energy sources. As noted above my main rationale for using natural gas CHP is that you eliminate the need for storage. In their project overview this issue was not addressed because they noted fatal flaws without it. The more comprehensive review proposed in the press release must address that issue or be compromised.

NYPA noted that there is not enough roof space or appropriate acreage in Albany and that the option does not provide heat for solar photovoltaic as issues. At the simplest level if we assume 0.75 kWH per day per square yard of solar photovoltaic, then you would need 84 acres of space for enough PV cells so I have to agree with the NYPA space argument. Furthermore that is the minimum level needed because PV output varies over the year. In order to do the calculation correctly you would need to match the PV output with the actual daily and seasonal load curves. In any event you would still need to provide energy for heating and that requirement is exacerbated by the fact that the fact that when you need the heat the most the solar energy is lowest.

With regards to solar thermal, NYPA noted that the technology cannot generate steam, space is an issue and it does not provide electricity. If your only requirement is hot water then solar thermal may have value but in this case I agree with NYPA. To use solar thermal for heating you would have to replace the existing heating system, you need the solar thermal collectors contiguous to the facility so space is an even bigger constraint, and the peak need for energy is in winter when the solar energy available is lowest. The final nail in the coffin is that this option does not provide electricity.

Geothermal has two flaws. In the first place it cannot generate steam heat so that means that the existing heating system cannot be used. Secondly, it does not produce electricity.

NYPA noted that wind power is hard to site in urban areas, has safety issues in urban areas, and noted that the area does not have enough wind potential for the project. In addition they could have noted that wind does not produce steam so the heating system would have to be changed.

The press release course of action notes:

NYPA will engage community stakeholders, energy experts, and community advocacy organizations to examine renewable options including large scale net metering for solar and wind inputs. The Authority will further assess the feasibility of incorporating any renewable energy options as part of a proposed locally-sourced mini-power grid. The grid will be connected to the statewide grid, and also be able to operate independently, to power the Governor Nelson A. Rockefeller Empire State Plaza in Albany. The goal for the proposed project is to be able to supply 90 percent of the power for the 98-acre downtown Albany complex and be able to save the Plaza an estimated $2.7 million in annual energy costs.

In my opinion, this will be difficult to justify and meet the criteria listed. The ultimate problem is that renewable energy is intermittent and diffuse. Any meaningful renewable energy component to this project will have to include storage to address intermittency or it is simply a virtue signaling symbolic gesture. As noted by NYPA and confirmed in my simple estimates, renewable energy’s Achilles Heel of diffusivity means that in order to include any substantive wind or solar it will have to be collected beyond the Empire State Plaza boundary. When that happens the goal of being able to operate independently is contradicted because the existing grid will be used to transmit the power.

Judith Enck, the former EPA regional administrator for the Obama administration claims “If the state of New York is serious about climate change, it has to stop investing in fossil fuels.” While for this particular project I concede that it is technologically feasible to use renewable energy I don’t see how it could be implemented without substantially higher costs to address intermittency with storage and without contradicting the basic tenet that it will be able to operate independently. NYPA is a New York agency controlled by the Governor. It will be interesting to see how the short-comings of renewable energy are reconciled with the reality of the electrical and heating needs of the Empire State Plaza.

Cuomo State of the State 2018 Climate Agenda “Really?”

Governor Cuomo unveiled a comprehensive agenda to combat climate change by reducing greenhouse gas emissions and growing the clean energy economy in the 2018 State of the State on January 3, 2018. My reaction to one aspect of this reminded me of the VW Sign then Drive Event – “Really?” commercials. In the commercial a kid rows a gutter ball and says “Really?”, a lady gets no responses to a party and says “Really?”, and so on. The 20th proposal of the 2018 State of the State: a comprehensive agenda to combat climate change by reducing greenhouse gas emissions and growing the clean energy economy made me think the same thing. In particular is this little gem to undertake “revisions to strengthen RGGI by grouping together and thereby covering peaking units that collectively exceed RGGI’s capacity threshold of 25 megawatts”.

The rationale in the agenda is that:

RGGI only covers power plants with a capacity of 25 megawatts or greater, leaving out many smaller but highly-polluting, high demand “peaking” units, which operate intermittently during periods of high electricity demand. These polluting units are often located close to population centers that come online to meet peak electricity demand on excessively hot or cold days, and disproportionately impact low-income and minority communities that already face a multitude of environmental burdens.

I never really thought too much about the CO2 emissions from the peakers because after all they don’t run much and they are small although admittedly relatively inefficient. So I looked into it. Table 1 New York State CO2 Emissions by Control Program lists operating data and CO2 emissions. Of course you run into a problem immediately inasmuch as about two thirds of the peakers don’t even report CO2. Nevertheless I managed to come up with an estimate. I downloaded all the Environmental Protection Agency Air Markets Program New York unit annual emissions for all reporting programs from 2009 to 2016. I categorized the units by RGGI program; Other Program, 5-month reporting; and Other Program 12-month reporting. In 2016 the RGGI unit CO2 total was 31,194,515 tons and the peaker units already included in RGGI CO2 total was 245,987 tons.

In order to estimate CO2 emissions from the units that don’t report I assumed that the CO2 rate per operating time would be the same for peakers that report and those that don’t to calculate a conversion for the 5 month units. I multiplied that conversion factor by the reported operating times and assumed that it should be pro-rated across the entire year by multiplying by 12/5. Using those assumptions the total CO2 peaker emissions increase 215,000 tons to 460,987 tons or about 1.4% of the total emissions.

One of my biggest problems with the New York State clean energy programs is the apparent lack of an end game. I think the primary rationale for this is the environmental justice angle that the peaking units “disproportionately” impact low-income and minority communities. So it looks like the goal is to shut these units down.

Peak load days correspond to highest emissions days but the problem is that the peaking turbines needed to provide the peak load are old, inefficient and relatively high emitting. Consequently there is an extra kick of NOx pollution which as a precursor to ozone creates problems meeting the ozone ambient air quality standard. That is a real problem but conflating that with CO2 “pollution” is silly at best.

The State has never explicitly produced a game plan to replace the turbines in question. For example, consider July 20, 2015 which is the highest emissions day that year. The total gross load from all electric generating units in New York on that date was 303,967 MWh. Units covered by the RGGI program generated 297,350 MWh or 97.8% of the load. There already are combustion turbines covered by RGGI and they accounted for 19,960 MWH or 6.6% of the load. The non-RGGI combustion turbines targeted by the agenda only accounted for 2.1% of the load but that was still 6,369 MWh. The problem is that all of the combustion turbine generation was dispatched when it was needed, where it was needed in the New York City transmission system, and was not subject to weather. It is a non-trivial exercise for the Governor’s renewable energy program to replace that generation with those constraints.

I suppose proponents for including these units in RGGI could think that the revenues resulting from the sale of the RGGI allowances necessary to run could be invested to replace the peaking turbines. But 215,000 allowances at even $5 per ton is only $1,075,000. If those funds were allocated to the Clean Energy Fund then you could expect 3,575 MWh reduction based on calculations derived from my estimate of the NY RGGI operating plan. On the face of it that is pretty close to the 6,369 MWh number above but the gob smacking issue is that the 6,369 MWh is for one day and the 3,575 MWh is for a year!

NY RGGI Stakeholder Meeting February 2018

UPDATE: The stakeholder meeting was held on 2/13/2018 and I never received a response to my request for a webinar and the meeting did not include remote access.  Ironically, I understand one of the topics of conversation was an initiative to control CO2 emissions from the transportation sector. 

On January 25, 2018 several New York State (NYS) agencies announced a stakeholder meeting for NYS interests in the RGGI proceeding. These agencies should be leading by example but this announcement demonstrates to me their actual lack of commitment to their espoused goal.

The notice stated:

On February 13, 2018, the Department of Environmental Conservation (DEC), New York State Energy Research and Development Authority (NYSERDA), and Department of Public Service (DPS) will host a New York State stakeholder meeting to follow the Regional Greenhouse Gas Initiative (RGGI) regional stakeholder webinar scheduled for January 26th, and to discuss next steps related to the conclusion of the 2016 RGGI Program review. The meeting in Albany will build upon the regional meetings held to date and provides an opportunity to discuss New York specific topics related to the RGGI model rule implementation in New York. This includes forthcoming proposed revisions to DEC’s regulation implementing RGGI in New York, 6 NYCRR Part 242, CO2 Budget Trading Program.

My problem is the following:

This meeting will be in-person only to better facilitate dialogue as New York kicks off it’s stakeholder process. Additional meeting dates, including webinar opportunities may be made available to interested parties that cannot attend this meeting.

In my opinion, New York has set aggressive emission reduction targets more as a slogan and support for Governor Cuomo’s political ambitions than a rational action. At the top of the list of support for that statement is the decision to eliminate 10% of the state’s total electrical energy and 17% of the carbon free electrical energy by closing Indian Point. The fact of the matter is that in order to meet the Reforming the Energy Vision goal of an 80% reduction of GHG emissions by 2050 it will take enormous effort, require NYS citizens all to make sacrifices and accept some inconveniences. See for example this article on tradeoffs. State agencies should be leading by example. That the agencies would prefer to require attendees to increase their carbon footprint to attend a meeting solely “to better facilitate dialogue” is inconsistent with that reality. As Glenn Reynolds said: “I’ll believe global warming is a crisis when the people telling me it’s a crisis start acting like it’s a crisis.”

I submitted a comment to the contact address that included that point on January 27, 2018 and asked for remote access. If the agencies respond to that request I will update this post.

News from NY Office of Climate Change

The New York State Department of Environmental Conservation (DEC) Office of Climate Change publishes a regular email that lists the latest climate news. The latest edition shows that news has to be consistent with their preconceived notions of global warming. In this edition they use information to prove their case for climate change problems at the same time as they claim similar information cannot be used to not suggest climate change is not a problem. Talk about trying to have their cake and not eating it too.

Before proceeding a disclaimer. Before retirement from the electric generating industry, I was actively analyzing air quality regulations that could affect company operations. 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.

There are two articles that show the inability of the Office of Climate Change to really understand that there are two sides to the issue of climate change. The lead article is a picture of extensive ice at Niagara Falls with the following caption: “Extreme cold at the end of 2017 has frozen all but the moving water at Niagara Falls. Recent research suggests that a warming arctic may be contributing to cold snaps like this one in the Northeastern U.S. as a result of a weakened polar vortex.”

Also included, under a title “Science” is a quote from A Response for People Using Record Cold U.S. Weather to Refute Climate Change, published December 28, 2017 on forbes.com:

“Weekly or daily weather patterns tell you nothing about longer-term climate change (and that goes for the warm days too). Climate is defined as the statistical properties of the atmosphere: averages, extremes, frequency of occurrence, deviations from normal, and so forth. The clothes that you have on today do not describe what you have in your closet but rather how you dressed for today’s weather. In reality, your closest is likely packed with coats, swimsuits, t-shirts, rain boots, and gloves. In other words, what’s in your closet is a representation of ‘climate.’”

I agree completely that weekly or daily weather patterns are no indicator of longer-term climate change. If it is not immediately obvious the “recent research” analysis about the cold weather is trying to make an argument about weather patterns as an indicator of longer-term climate change. I am sorry but you cannot have it both ways.

If the Office of Climate Change deigns to correct this that might also want to mention to the Governor that he consistently is guilty of the same thing. He consistently refers to Superstorm Sandy as devastation related to climate change and has mentioned the November 2014 Buffalo lake effect snowstorm as further proof. Both were caused by short-term weather patterns. In order to prove otherwise historical weather patterns would have to be evaluated to determine if there was a change over time. In my opinion running a climate model to claim causation is dubious at best.

NYS RGGI Operating Plan Expectations vs. Reality

This is a post on the New York State Operating Plan which is supposed to determine the best use the Regional Greenhouse Gas Initiative (RGGI) auction proceeds that accrue to New York State (NYS). It is another in a series of posts on RGGI that discusses how RGGI has fared so far (see my RGGI posts page).  This post shows how far the public face of RGGI is from reality relative to NYS emission reduction goals.

I have been involved in the RGGI program process since its inception. Before retirement from a non-regulated generating company, I was actively analyzing air quality regulations that could affect company operations and was responsible for the emissions data used for compliance. As a result, I have a niche understanding of the information necessary to critique the operating plan. 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 responsibility for RGGI implementation is shared by the Department of Environmental Conservation (DEC) and the New York State Energy Research and Development Authority (NYSERDA). DEC set up the regulatory requirements for the affected sources and NYSERDA handles the money from the allowance auctions. The operating plan outlines how the money will be invested in programs to reduce emissions. The problem is that the budgeted program investments coupled with historic CO2e emission reduction benefits from those programs calculated by the agencies are woefully short of what is needed to meet the NYS emission reduction goals.

On December 20, 2017 the annual operating plan stakeholder meeting was held. You can see the operating plan documents, slides presented and access a recording of the meeting at the NYSERDA Use of Auction Proceeds website. In the opening remarks at the meeting the story from the agencies was that RGGI has been a rousing success and the investments have been a significant factor in that success. Alicia Barton, NYSERDA President, said that RGGI was “extraordinarily successful in driving positive environmental outcomes and fostering clean energy” and would be useful implementing a “cleaner, more reliable and more affordable future in the electric system”. Julie Tighe, DEC Chief of Staff, said that “emissions from the power sector in New York have fallen more than 50% since the states agreed to set the cap in 2005.” This post addresses the claim that RGGI investments have been an effective tool driving positive environmental outcomes. Tighe’s statement conflating the emissions reductions with setting the RGGI cap clearly implies that the reason the emissions went down was because of RGGI. I have already evaluated the actual impact of RGGI on emissions here that shows that her statement is wrong.

Analysis

Two documents released as part of the Operating Plan stakeholder process provide the information necessary to determine the potential effectiveness of the operating plan programs on reducing CO2e emissions. The calculated expected (CO2e) tonnage benefits to date are in RGGI Operating Plan (“2017 Operating Plan”) Table 1: Cumulative RGGI Benefits by Program. In DRAFT – 2018 RGGI Operating Plan Amendment (“Draft 2018 Operating Plan Amendment”) Table 1: Revenues and Program Funding Allocations, the proposed RGGI allowance revenue program investments for the next three years are listed. Multiplying the total budget amounts by the observed emission reductions dollars per ton benefits is all that is necessary to estimate how much CO2e is expected to be reduced.

Table 1 Comparison of RGGI Program Investments in this post combines information from both of those tables and a slide (Program Investments of $245M for FY 18-21 below) in the stakeholder presentation that describes the proposed program investments for the next three years. It was an interesting exercise to figure out how the categories meshed between the Draft 2018 Operating Plan Amendment and the Program Investments slide but I think the listings in my table are close. The total program investments budgeted in Fiscal Years 2018-2019 are $244.5 million. At the stakeholder meeting five investment strategies were described:

  • Building capacity for long-term carbon reduction
  • Energy Efficiency and Renewable Energy technologies
  • Empowering New York communities and transition to cleaner energy
  • Innovative financing
  • Stimulating entrepreneurship and growth of clean energy

Those categories are listed under Stakeholder Presentation in Table 1 Comparison of RGGI Program Investments. The specific programs from the Draft 2018 Operating Plan Amendment are listed opposite those strategies.

For each of the specific programs the $ per ton annual benefit calculated values presented in the 2017 Operating Plan was included in the table. Note that the category “Directed to the State – Environmental Tax Credits category did not have a $ per ton benefit calculated. I used the lowest of the three EE/RE cost benefit numbers to give the most CO2e reduction bang for the buck. Neither of the Empowering New York communities and transition to cleaner energy categories in the 2017 Operating Plan had emission reduction benefits calculated. The Directed Electric Generation Facility Cessation Mitigation Program provides payments to municipalities that depended on large fossil-fired generating plant property taxes when those facilities are closed down which certainly does not translate into reductions. Community Clean Energy programs “support the transition to sustainable and resilient communities” which apparently does not translate into direct CO2e reductions

Finally, the program 3-year investments are divided by the $ cost per ton benefit to determine how much CO2e reduction can be expected. For the $244.5 million investments the projected annual (how much is expected each year from the investment) emission reductions total is 268,595 tons of CO2e. The annual investment emissions reductions expected is one third of that or 89,531.

Let’s put those numbers into context. The RGGI model rule states:

The regional emissions cap in 2021 will be equal to 75,147,784 tons and will decline by 2.275 million tons of CO2 per year thereafter, resulting in a total 30% reduction in the regional cap from 2020 to 2030.

The New York share of the total allocations is 38.9% so New York’s share of the emission reductions necessary is 885,721 tons per year. The New York investments from the RGGI allowance auction revenues are expected to only reduce emissions 89,531 tons at an average investment rate of $81.5 million. In other words the RGGI investments are only expected to provide about 10% of the needed emissions reductions. If we back calculate to determine how much would have to be invested in these programs to get all 885,721 tons needed each year, it would take $731 million per year. That translates into a weighted average allowance price of $48 per ton, nearly nine times the assumed price.

Even more gob smacking is the NYS Reforming the Energy Vision (REV) goal of a 40% reduction of 1990 emissions by 2030. NYS 1990 emissions were 205.8 million tons so the 2030 goal is 123.5 million tons. In 2015 NYS emissions were 178.9 million tons so for the next 15 years annual emission reductions have to be just under 3.7 million tons per year to get to the target goal. It would take over $3 billion per year to be invested in these programs to get the 3.7 million tons needed each year to meet the 2030 REV goal.

Conclusion

Actually looking at the performance of the RGGI investments and determining the cause of electric sector emission reductions tells a completely different story than that presented by NYSERDA and DEC at the NYS RGGI operating plan stakeholder meeting. RGGI investments are not providing anywhere near the emission decreases necessary to meet the additional 30% RGGI cap reduction that New York championed. As shown elsewhere, fuel switching was the primary reason emissions dropped since 2005 and the problem is that there are limited opportunities for further reductions. Given that simply using their own numbers to determine the effectiveness of their investments tells a different story than the public overview does not portend well for the ambitious goals of Governor Cuomo.