The NYS Public Service Commission recently approved the NYS Energy Research and Development Authority’s expanded Clean Energy Standard (CES). It includes 25,000 MW of renewable energy procurements, additional procurements for legacy renewable energy projects like hydropower, and a new Tier 4 for renewable energy projects that feed directly into New York City.
With the expanded CES, New York is on a path to transforming our power sector. As we reported this summer, it comes as part of standards established by the Climate Leadership and Community Protection Act (CLCPA) – New York’s ambitious and comprehensive climate and clean energy law. One of the main goals of the Act is to move the state toward achieving the 2040 Zero Emission Target, meaning there will be zero emissions associated with electrical demand in that year. An important step toward this goal is meeting the “70 by 30 Target,” whereby the New York State Public Service Commission will secure renewable energy resources to cover at least 70% of energy demand in 2030. The 70 by 30 Target pushes the Commission’s 2015 State Energy Plan, which set a target that 50% of electricity in 2030 should be generated by renewables.
In New York, 25% of greenhouse gas (GHG) emissions come from homes and buildings and 16% of GHG emissions come from power generation, making these sectors the second two largest polluters in the state. The expanded Clean Energy Standard will create new incentives and requirements to push power utilities toward zero-emissions generation and building energy efficiency using both previously built infrastructure and new sources. It will therefore help meet our state’s climate action goals, decrease impactful air pollution, and improve air quality-related public health issues. The existing CES uses a Renewable Energy Credit (REC) system to drive the power sector toward the 2040 Zero Emission Target. The expanded CES will expand that tier system from three to four levels while expanding the scope of the credits.
The current Tier 1 RECs require power utilities to purchase a certain number of credits per year to encourage the development of new renewable energy sources. The expanded CES will extend and expand Tier 1 RECs to create more renewable energy, namely an additional 24,990 gigawatt hours (GWh) from Tier 1 resources already procured. Between existing and new resources, the proposed Tier 1 procurement of energy from 2021–2026 is estimated to yield a net benefit of $7.7 billion, including avoided carbon emissions benefits.
Presently, Tier 2 is used to award support contracts for renewable resources that began operations before the CES. Recognizing the importance of these resources and the fact that many 10-year contracts entered in the 2010s will shortly expire, the proposed Competitive Tier 2 Program would provide additional support to mainly existing hydropower and wind power renewable energy sources. Keeping these power generators online is necessary to reach the 70 by 30 Target.
Previously established Tier 3 credits, also known as Zero Emission Credits, go to support upstate nuclear power plants. Similarly to the existing hydro and wind power sources addressed by Tier 2, these need to be kept operational in order to realize the 2040 Zero Emission Target.
The brand-new proposed Tier 4 RECs would go towards creating up 3,000 megawatts of renewable energy delivered directly into New York City. The Commission notes that New York City consumes roughly a third of the state’s total energy demand—nearly 52,003 GWh per year—and almost all of it is generated from fossil fuels. New York City therefore must increase its use of renewable energy to make the statewide 70 by 30 Target possible. New York City faces a significant challenge in the quest to convert to renewable energy given the lack of developable land. The addition of new upstate sources can’t meaningfully increase New York City’s renewable energy consumption without new transmission capacity to move renewable energy. Tier 4 would address this issue by providing direct financial support for renewable energy delivered into New York City.
In addition to moving the state toward the 2040 Zero Emission Target, Tier 4 RECs would address issues associated with New York City’s local air quality. Fossil fuel combustion-related pollutants, fine particulate matter, and ozone continue to impact public health. Even though the average annual levels of many pollutants are declining, high levels of fine particulate matter, nitrogen dioxide, and nitric oxide continue to be observed in areas of high traffic density, building density, and industrial areas. Additionally, most of New York City’s fossil fuel power plants are found in communities of color and historically working-class neighborhoods. Plants emit noxious gases that pollute the air along with ozone and particulate matter, leading to high rates of asthma, respiratory conditions, and heart disease. Replacing New York City’s fossil fuel power plants would improve the region’s local air quality and reduce public health and environmental justice concerns.
Under the CLCPA, the expanded CES will increase state financial support for renewable energy sources to move New York toward the 70 by 30 Target and the 2040 Zero Emission Target. By expanding the tiered Renewable Energy Credit system, New York aims to drive the development of new renewable energy sources while utilizing previously existing sources. The program will improve local air quality in affected regions, protect local environments, and help us combat climate change.
We need an all of the above strategy to clean energy and reducing climate pollution. Our ability to meet our climate goals hinges on greening our grid and the expanded CES is a significant step forward. Advancing it so swiftly shows that Governor Cuomo’s administration is responding to the climate crisis with necessary urgency.