POLITICO: Calling state’s renewable goal a ‘moral imperative,’ environmental groups oppose likely delay

July 8th, 2024

Read the full article by Marie French here.

The pushback comes as the Hochul administration acknowledges the state’s renewable target is out of reach.

NEW YORK — Gov. Kathy Hochul’s administration has acknowledged for the first time that the state’s renewable target is out of reach.

New York has enough existing and under-development renewables to reach about 44 percent in 2030 — far from its 70 percent goal, according to a review of progress under the state’s climate law released last Monday. Closing that gap is not feasible, state agencies asserted.

So the state’s Public Service Commission will consider a change to the statutory target, Chair Rory Christian said in an interview on Monday, noting the entity “is authorized to do so under the Public Service Law.”

Weakening the statutory target will face staunch opposition from environmental advocates.

“It’s too soon to wave the flag,” said Julie Tighe, president and CEO of the New York League of Conservation Voters. “We need to keep pressing to achieve these goals by 2030, even if we end up a little bit off.”

Growing electricity demand — primarily from large economic development projects and cryptocurrency mining — coupled with rising costs for renewables that led to the cancellation of large offshore wind projects have contributed to the delay. The renewable target is a statutory mandate and underpins the related efforts to cut emissions 40 percent from 1990 levels by 2030.

If New York can’t clean up its grid, the state will have an even harder time slashing overall emissions. New York City’s buildings may also find it more difficult and costly to comply with emissions reduction requirements.

The state’s climate law does say the PSC can “suspend or modify” the targets after conducting a hearing if it “makes a finding that the program impedes the provision of safe and adequate electric service; the program is likely to impair existing obligations and agreements; and/or that there is a significant increase in arrears or disconnections … related to the program.”

But environmental leaders say the Democratic governor needs to do more to achieve the 2019 mandates set in the Climate Leadership and Community Protection Act, or CLCPA.

“New York must use every tool at its disposal to meet the 70 percent renewable electricity target by 2030. This is a legal mandate and a moral imperative for our future,” said Vanessa Fajans-Turner, executive director of Environmental Advocates NY in a statement. “The Hochul administration holds significant power to act. They should. Today.”

But the report simply acknowledges the reality of renewable projects, said Marguerite Wells, head of the Alliance for Clean Energy New York, an industry trade group. “The math clearly shows all those projects can’t be delivered by 2030,” she added.

The analysis also lays out actions to increase flexibility for NYSERDA to procure renewables, which Wells said would help the state move toward its goals.

“Even though it seems bleak, I’m actually very optimistic that there’s a good path forward here,” she said. “I don’t think 2033 is appreciably different than 2030 … We’re still going as fast as we can and that’s all anyone can do.”

For skeptics of the state’s climate law and proponents of NYPA building new renewables, the report was vindication, albeit in different ways.

“Finally, the PSC admits what’s been obvious for a long time,” Assemblymember Bobby Carroll, who sponsored the measure to expand the power authority’s ability, wrote on X. “Now [NYPA] is the only way for NY to hit the goals of the CLCPA.”

Upstate United, a business group representing chambers and companies in upstate New York, said policymakers should reconsider the climate law’s timelines.

“Given the amount of government resources committed to the task and billions of dollars passed on to consumers, this long overdue concession should give policymakers ample reason to press pause and reassess the ambitious timeline and goals,” said Upstate United executive director Justin Wilcox in a statement.

New forecast

The main driver of the increased gap to the 2030 goal compared to previous estimates by NYSERDA is growing demand for electricity from large loads. That includes projects like Micron, but it also includes requests for power from cryptocurrency miners and green hydrogen production.

The large loads increased the 2030 demand forecast by about 10,000 gigawatt hours, or 6.7 percent. That’s nearly a fifth of New York City’s total electricity demand. It’s equivalent to the amount of new onshore renewables NYSERDA could procure over two years, according to the review.

And while the report seeks to spin the growing demand as supporting additional electrification that reduces emissions, the new forecast for 2030 actually anticipates less progress than previous estimates. State policymakers now expect only 4 percent of buildings to be electrified in 2030 versus a forecast for 21 percent four years ago.

Other factors

The report also assumes more “attrition” of the portfolio than NYSERDA previously included in its estimates.

The authority said in January 2024 that the state was still on track to reach 63 percent renewables in 2030, that dropped to about 56 percent when three offshore wind projects canceled their contracts in April.

But those figures did not include a buffer for cancellations of contracted projects, while the new report calls for factoring in a 30 percent attrition rate given recent events.

The Clean Path New York transmission project, which would carry renewable energy from upstate into New York City, is also only contributing about 24 percent of the electricity it is contracted to deliver in this analysis. The project still has a contract but faces questions about its future.

The report flags concerns about hydropower produced in Canada becoming less available.

So, accounting for the higher forecast load, canceled contracts with more expected in future and lower expectations for existing renewables and imports, NYSERDA is now on track to hit just 44 percent renewables by 2030.

Delayed goal

The gap is essentially insurmountable over the next six years, the draft review concludes. No additional offshore wind projects would be able to come online before the end of 2030.

Staff say that NYSERDA would have to close the gap with onshore renewables alone, a daunting task that would require annually procuring double the amount of projects that could feasibly be built in a single year. The amount needed to meet the 2030 goal “may far exceed what the renewables industry could be expected to develop in this timeframe,” the report states.

Instead, Hochul’s administration lays out a path to achieve 70 percent by 2033, with a reliance on both onshore renewables and offshore wind. The review also emphasizes the uncertainty of the load forecast, which could push achievement farther out or make it easier if large economic development projects don’t come online.

“All scenarios reflected in this analysis represent positive and transformative levels of renewable energy deployment across New York State, involving hundreds of renewable energy projects that will mitigate climate change by reducing greenhouse gas emissions, improve local air quality, and foster clean energy careers and economic development,” the report states.

The report is a draft, so public comments are being sought before the Public Service Commission acts.

More renewables still needed

The report calls for increasing the amount of renewables targeted for procurement by NYSERDA each year by about a quarter over current levels. It also suggests annual solicitations be extended by three years to 2029.

NYSERDA and DPS staff should also be given flexibility to procure more than the 2035 target for 9 gigawatts of offshore wind to ensure that goal is achieved and support the 70 percent target. The PSC should also increase the target for distributed solar above 10 gigawatts by 2030.

“The approach suggested by the above scenario analysis does not eliminate future uncertainty on goal achievement, but the more conservative assumptions applied significantly reduce it,” the report states.

There are no cost or benefit estimates or analyses of how much this would add to ratepayers bills. Additional information is expected in an annual report on climate law costs later this year. Staff would report on progress toward the 70 percent target again in 2026 and 2028.

Other changes

Some renewable developers are likely to be pleased by the other changes recommended for consideration in the report. That includes changing how bids for onshore projects are evaluated to prioritize viability more. Currently, price is 70 percent of the criteria.

This has led to less mature projects securing contracts and potentially shutting out more developed projects with a better idea of their costs. The report also proposes some additional options to incentivize onshore wind development, including a technology-specific target for procurement, separate solicitation or price bonus.

Wells said an increased focus on viability and maturity of projects likely eliminates the need for such mechanisms, because many wind projects in New York are in advanced stages of development.

Black swan events

The report also recommend some options to provide NYSERDA more flexibility in contracting to deal with unknown “black swan events” that may impact development of renewables. The delays to achieving the goals from canceling and rebidding projects over the past several months highlights the risk of these types of events.

While NYSERDA now includes inflation and interconnection cost adjustments in contracts, the authority wants even more flexibility from the PSC — including to “offer a strike price adjustment if such an event occurs to all contracted projects affected by it.”

This would have circumvented the need for PSC action when developers requested higher prices last year.

The report suggests allowing 25 year contracts for onshore projects and 30 years for offshore wind.

“The important thing is to come to an RFP and contract structure that’s more durable and can withstand the ups and downs of development and real life,” Wells said. “The state doesn’t want to overpay, and that’s perfectly reasonable … on the other hand developers can’t be left short.”

The report also floats the idea of utilities owning renewables, designated “renewable energy zones” and support for small existing hydropower plants that are struggling.