The Future of a Sustainable New York

As we move into 2016 and etch closer to the first of several phases for implementation of the Clean Power Plan (CPP) standards, it’s critical to think about fuel diversity in the ever evolving energy dynamics we face. New York State’s fuel mix portfolio is heavily weighted on fossil fuels, both dual fuel and gas (41%) and nuclear (32%), with other renewable resources (27%) making up the difference of power generation.

Renewable Energy Requirements

The Clean Power Plan, announced by the President and Environmental Protection Agency in August of 2015, aims to address climate change through a 32 percent reduction in power sector carbon emissions by 2030 from 2005 levels, beginning in 2020, in addition to decreasing sulfur dioxide and nitrogen oxides by 90 and 70 percent, respectively. Per section 111d of the Clean Air Act, individual states are required to develop and implement programs to meet these requirements, in accordance with the rules and timeline laid out as part of the CPP.

New York’s Response

At the state level, New York historically has been a leader in sustainability and has already begun actions to address its future renewable energy requirements. Included in these actions, Governor Cuomo has tasked the Public Service Commission with ensuring the state obtain 50 percent of its power from renewable resources, reduce overall greenhouse gas emissions 40 percent from 1990 levels, and cut energy consumption 23 percent from 2012 levels – all by 2030.

In addition, the state is an active participant in the RGGI re-evaluation and Governor Cuomo recently committed New York State to the Under2MOU.

The state continued making strides in 2015, working towards planning its energy future through policy discussions as a part of the Reforming the Energy Vision (REV) program which included initiatives such as K-Solar, NY Prize, NY-Sun, Build Smart NY, and NY Green Bank. While these initiatives are critical for the long term goals set forth in the Clean Power Plan, they should not be the only considerations in the state’s clean energy future.

Even with vast improvements and costs reductions to wind and solar technologies, the sun’s not always shining and the winds not always blowing. Frankly speaking, financial resources are not infinite.

As such, we must also focus on how we handle carbon pricing for not just new, but existing resources. New York participates in the Northeast and Mid-Atlantic’s Regional Greenhouse Gas Initiative (RGGI), which is a market-based regulatory program aimed at reduction of greenhouse gas emissions. Right now, RGGI is beginning the 2016 program review, where stakeholders can participate in outlining the programs design. Over the next few months it will be critical to participate in this conversation and pay attention to how we define, as a state and region, the outcome of RGGI and the impacts it has to existing resources – resources that have the bandwidth to supplement clean power while we move towards implementation of longer term renewable resources.

Addressing Operational Costs

Over the last 40-plus years, billions of dollars have been invested in the state’s existing nuclear fleet, which provides nearly a third of the state’s total generation – generation free of carbon emissions. Yet in the current low natural gas price environment, many of these clean, safe, already existing resources are unable to sustain costs of operation. This past November, Entergy announced plans to retire its 847 MW capacity plant Fitzpatrick in Scriba, NY. A few weeks prior, it announced the intent to retire its 675 MW plant in Plymouth, MA. Without proper price signals in place this could be an ongoing trend, and it’s important to understand the implications of that – impacts to local reliability, capacity costs, the local economy, and the states CO2 emissions goals. All must be part of the public policy debate going forward.

To help you better manage your power and natural gas supply this winter and beyond, Constellation offers a variety of products and services that can help you mitigate risk and protect you from market volatility. Contact us today to learn more.