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New York's "50 By 30" renewable energy: A model for the rest of America

By Ed Krapels

Hillary Clinton and Donald Trump rolled out their very different energy policy platforms during the election campaign last fall—with now-President Trump promoting production of traditional energy. But it's useful to look at activities at the state level.

Among the progressive states, New York is worth watching. Governor Andrew Cuomo has advanced a "50 by 30" (50 percent of electric energy must come from renewables by the year 2030) climate and energy policy. Due to its rich existing endowment of energy resources, New York has the luxury to choose from contending forms of renewable and zero- or low-carbon energy resources. In 2015, 45 percent of New York's electricity came from oil, gas, and coal. That means 55 percent of the state's electric power already comes from low- or zero-carbon emitting resources. Here is the breakdown of that 55 percent.

Some 31 percent of New York's electric energy in 2015 came from New York's nuclear plants. Whatever one's view of nuclear, it does produce carbon-free electric power. The problem is, some of the nuclear plants are in dire straits economically, and some are quite far along in the 60-year expected life span of these facilities. If New York could keep its nuclear plants open, maintaining "50 by 30" will be easier; if all of the nuclear plants close, it will be much, much harder.

In 2015, 19 percent of New York's power came from hydro, anchored of course by the huge facility at Niagara Falls. Only 2.8 percent of New York's electricity in 2015 came from wind. It has the potential for much more wind development, most of it located upstate. Additional wind capacity could be developed assuming a build-out of north-to-south and west-to-east transmission to get the clean power to downstate markets. New York can also import more clean power from Quebec and from PJM (the Pennsylvania-New Jersey-Maryland market). New York could also ultimately be home to several thousand megawatts of offshore wind.

Solar energy is expanding rapidly, although most of it is "behind the meter" or a "retail" form of renewable energy. As the idea of "microgrids" takes hold as a result of New York's regulatory reforms, solar will continue to expand in New York.

It's worth asking what New York will ultimately get from this portfolio of renewable and carbon-free initiatives. One answer comes from the old idea of "comparative advantage." What does New York have that makes it competitive in the renewable energy business? To be sure, it has finance, and it has technology and first class educational systems. It seeks to be a 21st century high-tech manufacturer.

Perhaps its most important attribute, however, is its location. The state's electric infrastructure-its transmission and microgrid assets—can, with modest investment, capitalize on New York's comparative advantages to create a booming, region-wide, renewable energy trade. With New York City and Long Island as the fulcrum, New York should be at the center of commerce between its own energy-rich upstate, the massive power market of PJM (essentially the area from New Jersey to North Carolina, westward to Illinois), New England, Quebec, and Ontario. The greater northeast of North America abounds with intelligence, capital, and natural resources. New York can uniquely be the hub of regional renewable energy trade.

At first glance, the argument that New York will be the hub of an interregional market in renewable energy seems old-fashioned. But it isn't for two reasons. First, a regional renewable energy market, anchored in expanded trading links between New York and its neighbors, will provide electricity users throughout northeastern North America with access to the affordable renewable energy that is all around us. Second, an open market where energy and technology are traded is critical for the adoption of innovation. When markets are closed—whether it be by actions of utilities or regulators—innovation is stifled and along with it the economic growth that New York expects to get out of its renewable energy initiatives. Only with a regional renewable energy market linking producers and consumers of energy can New York and northeastern North America secure large amounts of carbon-free energy at affordable prices.

What's true for the Northeast would be even more true for the nation as a whole. It's unfortunate that the Obama Administration's clean energy programs were largely thwarted. But the result of New York's effort provides other states with a roadmap on how to transition from vision to action, from the old fossil-fuel-based power system to the new one based on renewable and sustainable power sources.

Ed Krapels is founder and CEO of Anbaric (www.anbaric.com), an electricity infrastructure development company focused on upgrading and enhancing the U.S. power grid.

 


July/August 2017