NYSERDA 2018 Renewable Energy Awards – Inconvenient Facts

On March 9, 2018 Governor Cuomo announced the “single largest commitment to renewable energy by a state in U.S. history at $1.4 billion, which will advance 26 large-scale renewable energy projects across New York.”   This sounds great in a news release but when you look at the numbers in more detail there are some inconvenient facts.

Per usual the details are sparse but there is a summary that says the New York State Energy and Research Development Authority (NYSERDA) request for renewable energy standard bids resulted in 26 agreements to develop 1,383 MW of new, clean energy capacity throughout New York State. The total funding committed through the request for proposals is approximately $1.4 billion, and the weighted average price for these contracts was $21.71 for each Tier 1 Renewable Energy Credit. The successful proposals include a hydroelectric project, three wind projects (including one with energy storage), and several solar projects. They also claim 1.6 million metric tons of reductions from these projects.

The NYSERDA Greenhouse Gas Inventory 1990-2014 contains an inventory of historical greenhouse gas emission data from 1990-2014 for New York State’s energy and non-energy sectors. According to this, New York State Greenhouse Gas (GHG) emissions were 235.8 million metric tons in the baseline year of 1990 for the REV goal so the 80% reduction is 188.7 million metric tons and 2050 emissions will only total 47.2 million metric tons if the goal is met. In 2014 total GHG emissions were 217.7 million metric tons so the reduction so far from 1990 is 18.1 million metric tons or only 10% of the 2050 goal.

I believe that one of the weaknesses of the REV process is that there isn’t clear, concise summary with a roadmap to meet the ambitious goal. In order to meet the 80% target NYS emission reductions will have to average over 4.7 million metric tons per year until 2050. If renewable energy standard bids were the only mechanism for achieving reductions, this year’s awards only gets a third of the annual reduction needed and we have to do this for 32 more years. However, the implementation plan combines both reductions in emissions and reductions in loads so this is not a correct comparison.

The New York State Department of Public Service Staff’s White Paper on the Clean Energy Standard did project what renewable energy was needed to meet the interim Reforming the Energy Vision and State Energy Plan goal of 50% renewable energy by 2030. According to the white paper:

To achieve the SEP 50 by 30 goal Staff has initially determined that in order for this goal to be met, slightly more than 33,700 GWh of incremental renewable generation must be added to the State’s fuel mix. Staff arrived at this calculation by determining projected 2030 load statewide. Staff adjusted the projected load growth for expected energy efficiency gains. We then noted that in 2014 the State had approximately 26% renewable energy in its power generation mix, net of exports, or 41,300 GWh of renewable energy. We then calculated that the CES program will be required to add an additional 33,700 GWh of renewable energy to meet the 50% by 2030 mandate.

Note that this white paper defines the needed renewable generation in output with units of GWh. That number is calculated by summing the hourly power produced by a generating facility over a year. After digging around for a while I found that the Frequently Asked Questions link for the 2017 Renewable Energy Standard Results notes that “Once operational, the 26 projects awarded in this RES solicitation are expected to generate more than 3.2 million MWhs annually.” Note that this converts to 3,200 GWh.

Here’s the first inconvenient fact: The “single largest commitment to renewable energy by a state in U.S. history at $1.4 billion” gets less than ten percent of the renewable energy needed by 2030 for the interim 30 by 50 goal. Simple extrapolation means that another $10 billion will be needed for the 2030 renewable energy goal.

Another inconvenient problem is the timing. According to the Frequently Asked Questions link, the target commercial operations date for these projects is 2022. In order to meet the 33,700 GWh projection the annual rate of project developments will have to be greater than the 2018 award level.

There is another inconvenient issue: permitting. Of the 26 projects, eight are large enough (>25 MW) to fall under the NYS Article Ten permitting process. This is an onerous and time-consuming process and it is interesting how many projects fall just short of the threshold capacity limit. Of the eight that have to go through that process, the Article Ten Projects Under Review link indicates that only one has submitted its application and another two have submitted scoping statements. As a result, I believe those three facilities could have their permits within a year or two. Frankly I would be shocked if any of the other five applicants could get through these permitting requirements in less than three years which only leaves a single year for construction.

In addition to the timing issue I have a particular concern relative to the implicit message sent when an award is announced for any project before it is permitted. There is a chance under the Article Ten permitting program that a project could be rejected due to local concerns and home rules. However, in this instance, the Cuomo Administration picks the judges and jury for that decision so it seems that the decision is pre-ordained in favor of the developer.

Moreover, deliberately sizing the project to skirt the Article Ten rules means that 18 local jurisdictions will have to address them and there maybe local issues that have to be addressed. For example, the Middletown recordonline web site describes the surprise of local officials about four projects. Of the four projects, two developers have contacted the town where the facility will be built but have not started the permit application process, one has not started work with the local agency, and the fourth has not even contacted the town. This could affect the viability of any project because, for example, one project does not fit the requirements of the proposed solar law the town is considering. The draft solar law allows for projects of up to 20 acres, generating 2 megawatts of power. The proposed project wants to use 95 acres to generate almost 25 megawatts of power. I think this puts undue and unfair pressure on the towns to approve permitting as quickly as possible because the Cuomo Administration has “approved” these projects.

In conclusion there are inconvenient facts related to this announcement:

  • The investment of over $1 billion covers only ten percent of the 2030 interim goal;
  • The size of the award is smaller than the annual amount necessary to meet the 2030 interim goal;
  • The schedule for this award is ambitious relative to permitting requirements;
  • In addition this timing issue will make subsequent investments successively more difficult to be permitted and constructed in time for the 2030 target deadline; and
  • The announcement of the awards to unpermitted projects puts undue pressure on the affected jurisdictions.

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