Cuomo State of the State 2018: Climate Agenda

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. This is directly related to Reforming the Energy Vision (REV), his plan to “rebuild, strengthen and modernize New York’s energy system. The ultimate goal of REV is to change the energy system of New York to reduce greenhouse gas (GHG) emissions 80% from 1990 levels by 2050 (“80 by 50”). In order to achieve that goal specific programs have to be implemented and this agenda lists another round. I will address each of the seven items in the aptly named agenda.

 Expand Regional Greenhouse Gas Initiative (RGGI) and Reduce Emissions Equitably From the Highest-Polluting, High Demand “Peaker” Power Plants

According to the announcement: “In 2013, Governor Cuomo led the nine RGGI states in reducing the cap on greenhouse gas emissions from power plants 50 percent by 2020. Since that time, RGGI has continued to exceed expectations, providing over $2 billion in regional economic benefits and public health benefits of $5.7 billion while reducing emissions more than required by the declining cap. In August 2017, the other RGGI states agreed to Governor Cuomo’s 2017 State of the State call to reduce the cap another 30 percent by 2030.”

RGGI is a pollution control program that auctions authorizations to emit each ton of CO2 from power plants. New York took the lead in recent revisions to the operating rules of RGGI that include an additional 30% reduction in emissions from 2021 to 2030. In my other blog I have posted technical evaluations of various aspects of RGGI. In late 2017 the Department of Environmental Conservation (DEC) and the New York State Energy Research and Development Authority (NYSERDA) released and asked for comment on documents that I used to determine the potential effectiveness of programs that use auction revenues to, in Cuomo’s words, “fight climate change and protect our environment, while supporting and growing 21st century jobs in these cutting-edge renewable industries.” I found that the program investments will only provide 10% of the reductions that Cuomo agreed to. Fuel switching from coal and residual oil to natural gas 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 does not portend well for this aspect of the State of the State climate agenda.

The agenda also includes a component to include peaker units in RGGI. Currently, 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”. There are approximately 100 of these peaking turbines in New York City and on Long Island. My initial estimate is that those turbines emit about 1.4% of the total CO2 emissions from units already covered by RGGI. The term much ado about nothing springs to mind.

Issue Solicitations in 2018 and 2019 to Develop at Least 800 MW of Offshore Wind Projects and Foster Offshore Wind Industry and Workforce in New York State

According to the announcement: “In the 2017 State of the State, Governor Cuomo took the bold step of establishing a target of up to 2.4 gigawatts of offshore wind by 2030, the largest commitment to offshore wind power in U.S. history. To position New York as the leading offshore wind market in the United States and to drive competition, reduce costs and create new well-paying jobs, this year Governor Cuomo is calling for a procurement of at least 800 megawatts of offshore wind power between two solicitations to be issued in 2018 and 2019, resulting in enough clean, renewable energy to power 400,000 New York households.”

Cuomo’s offshore wind proposals are pretty vague about the costs. Steve Gorham notes that “the Deepwater Wind Block Island project of Rhode Island takes first prize for outrageous renewable electricity cost. The five-turbine offshore system went into operation in 2016 at a contracted price of 23.6 cents per kW-hr, with an annual increase of 3.5 cents, placing the future price at over 40 cents per kW-hr.” According to the Energy Information Administration the October 2017 New York City wholesale electricity prices annual range was between 2.1 cents per kW-hr and 12.1 cents per kW-hr. Another analysis of offshore wind concluded as a rule of thumb “offshore wind capex wind costs to be about double onshore wind costs, and offshore maintenance costs to be somewhat unknown, but definitely higher than onshore wind costs.” The fact that the State has not provided costs is troubling but I fear these costs will significantly affect ratepayer costs.

 $200 Million Investment to Meet Unprecedented Energy Storage Target of 1,500 Megawatts by 2025 In Order to Increase Transmission of Clean and Renewable Energy

According to the announcement: “The Governor is also proposing a commitment of at least $200 million from NY Green Bank for storage-related investments to help drive down costs and to strategically deploy energy storage to where the grid needs it most. Finally, the Governor is directing NYSERDA to invest at least $60 million through storage pilots and activities to reduce barriers to deploying energy storage, including permitting, customer acquisition, interconnection, and financing costs.”

Under another related heading the announcement notes: “The Governor is also proposing a commitment of at least $200 million from NY Green Bank for storage-related investments to help drive down costs and to strategically deploy energy storage to where the grid needs it most. Finally, the Governor is directing NYSERDA to invest at least $60 million through storage pilots and activities to reduce barriers to deploying energy storage, including permitting, customer acquisition, interconnection, and financing costs. In addition to utility procurements and regulatory changes, these investments will be critical to jumpstart the market and support robust and cost-effective project development on the way to achieving the 1,500 megawatt goal.”

Because renewable energy is intermittent, storage is an absolute requirement to provide dispatchable power when the wind is not blowing and the sun is not shining. I suppose that the “plan” is to use renewables to replace the high demand peaker turbines. As noted there are about 100 of these turbines and they are at least 20 MW each for a total output of 2,000 MW. More importantly those turbines can run as long as needed to cover the peak generation requirements. If that is just four hours that means they produce 8,000 MWh. I have been unable to find out the equivalent output for the batteries but strongly suspect that it is short. For example the much acclaimed giant Tesla battery just installed in Australia has a capacity of 100 MW but only 129 MWh. So the question is just how much capacity will these investments get?

 Create the Zero Cost Solar for All Program for 10,000 Low-Income New Yorkers

According to the announcement: “Reducing the energy burden of low-income households and ensuring their participation in the clean energy economy are central goals in Governor Cuomo’s energy policies. The Governor’s REV strategy aims to ensure that the economic, environmental and health benefits of clean energy are accessible to New Yorkers who are most in need. In 2016, Governor Cuomo also unveiled the Energy Affordability Policy to limit energy prices and provide direct cost relief for low-income New Yorkers, and expanded it the following year to bring the total program benefits to $260 million.”

The testimony of William D. Yates, CPA for the Public Utility Law Project of New York, on August 25, 2017 in the Niagara Mohawk Power rate case listed the poverty rates of Upstate New York cities. For example the City of Albany has a poverty rate of 26.8%. The population of Albany is 97,856 so there are 26,255 low-income New Yorkers in Albany alone. As a result the 16,255 New Yorkers in Albany that don’t get the zero cost solar for all benefits will have to subsidize those that do. Raising energy prices is amounts to a regressive tax that is particularly harmful to those least able to pay. Claiming that “reducing the energy burden of low-income households” is clearly not going to happen overall.

 Reconvene Scientific Advisory Committee on Climate Change Disbanded by the Federal Government

According to the announcement: “In June 2017, Governor Cuomo formed the U.S. Climate Alliance with the Governors of California and Washington State to ensure that New York State and other willing partners continue to meet or exceed the targets of the Paris Agreement on climate change. After announcing its withdrawal from the Paris Agreement, the federal government took another misguided step by disbanding the Federal Advisory Committee for the Sustained National Climate Assessment, a group of leading scientists and stakeholders tasked with providing recommendations to the federal government on scientific information to support state and local governments, communities, and the private sector in planning for the effects of climate change. In the absence of guidance from the Advisory Committee, decision-makers will have limited ability to know how climate change will impact their organizations and communities, and what they can do to better plan for those impacts. Therefore, Governor Cuomo, as co-chair of the U.S. Climate Alliance and in collaboration with partners, will reconvene the Advisory Committee to develop recommendations to navigate the challenges of climate change. As a result, the Advisory Committee will continue its critical work without political interference and provide the guidance needed to adapt to a changing climate.”

The scientists on the scientific advisory committee have provided fodder for Cuomo’s agenda so it is not surprising that they have figured out a way to continue that work. Personally, because it was a political decision to stop funding the committee that existed only to fan the flame of catastrophe as a rationale for all the programs, claiming that it will continue its work “without political interference” is laughable.

 Governor Directs the Establishment of Energy Efficiency Target by Earth Day

According to the announcement: “Building on the progress made through utility programs and cutting-edge work to reduce energy use in state facilities, Governor Cuomo launched the $5 billion Clean Energy Fund in 2016 to support investment in energy efficient technologies. This initiative is already demonstrating significant progress across New York State, from Upstate farms and greenhouses to commercial buildings in Manhattan. These activities are expected to save New Yorkers a remarkable $39 billion in energy costs over the next 10 years while significantly reducing greenhouse gas emissions.”

 I support energy efficiency programs because it represents a “no regrets” policy and because it can be targeted for the low-income ratepayers most in need of reducing their energy bills from what I see as inevitable major increases with these renewable energy policies. Unfortunately, New York has been pushing energy efficiency for years so I suspect that most of the low-hanging fruit available for big reductions has already been picked. I also note that I understand that the weatherization assistance program has an over four year waiting list for services. Therefore, despite my reservation I believe this is the best of the options proposed by the governor.

 Regulations to Close all Coal Plants to be Adopted

According to the announcement: “Moreover, in order to immediately reduce emissions from New York’s highest-polluting power plants Governor Cuomo directs the DEC to adopt regulations ending the use of coal in the state’s power plants by 2020. At the same time, Governor Cuomo created the Electric Generation Facility Cessation Mitigation Fund to address the needs of the local communities affected by any closure.”

Normally a Governor asks the DEC to propose regulations but note that Cuomo has directed DEC to adopt the regulations. Needless to say even if Moses brought down an eleventh commandment saying ye shall not close the coal plants that or any other argument would sway DEC from its political directive to shut down coal. I have worked in New York for over 35 years and we used to be proud of the fuel mix of hydro, coal, natural gas, oil and nuclear. Those fuels enabled the power plants to provide dispatchable power (i.e., supply energy whenever needed whatever the weather) and play off one fuel against the other to give NY residents cheaper power. The shale gas revolution (despite the Governor’s ban on NY drilling) has flipped that approach completely upside down but I think it would be more appropriate to let the market dictate fuel use rather than the politicians. It also should be pointed out that now the state is very reliant on natural gas. Aside from the real threat of a supply disruption from some unforeseen event (an earthquake could affect pipelines) the Governor has also been blocking the development of natural gas infrastructure even to the point of blocking a pipeline to a nearly complete power plant.

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