Arijit Sen, Sabin Center Summer Intern
Governor Andrew Cuomo released the final version of the much-anticipated New York State Energy Plan on June 25th, 2015. The Plan includes emission, generation, and consumption targets that would significantly advance the state’s clean energy ambitions. The Plan lays out a clear roadmap to achieving the state’s 2014 Reforming the Energy Vision (REV) goals and is centered on coordinating the efforts of state agencies to improve market-driven adoption of clean energy technologies and reduce the financial burden on ratepayers.
There are three “pillars” to the energy plan: The Public Service Commission’s (PSC’s) REV Regulatory Docket, the New York State Energy Research and Development Authority (NYSERDA’s) Clean Energy Fund, and the New York Power Authority’s “leading by example with investments in innovative solutions.” The overarching goal of the plan is to meet the following targets by 2030:
- 40% reduction in GHG emissions from 1990 levels
- 50% generation of electricity from renewable resources
- 23% decrease in building energy consumption from 2012 levels
The plan outlines a clean energy future for New Yorkers with “smart” zero net energy homes, retrofits contributing to reduced electricity and heat consumption financed through energy savings, extensive community solar and microgrid projects, competitive retail energy market, and advanced demand management services. At the same time, it recognizes challenges in implementation such as affordability, environmental justice, reliability and resiliency, and outdated utility business models. The remainder of the plan attempts to address these issues through seven broad initiatives: Renewable energy; Buildings and energy efficiency; Clean energy financing; Sustainable and resilient communities; Energy infrastructure modernization; Innovation and R&D; Transportation; and Clean Energy Goals. The three technical appendices to the Plan address end-use of energy, impacts of usage, and sources of energy and offer useful quantitative grounding to the largely qualitative main text.
The remainder of this blog post will evaluate the pathways to meeting the Plan’s overarching objectives and discuss how potential implementation challenges are addressed.
The Positives
The State Energy Plan is fairly detailed in describing what is expected of various organizations in relation to the seven broad initiatives. More than forty specific objectives are described in the Plan in a fair amount of detail. Highlights include:
- The redesigning of NYSERDA’s renewable portfolio standard (RPS) program. The plan makes a budgetary commitment of $1.5 billion for a 10-year period. It also calculates the program’s impact on electricity costs and renewable energy deployment at around $11-$12 per MWh lower and 70-120% higher than current policy initiatives, respectively.
- The use of diversified policies such as K-Solar (community solar in schools) and Shared Renewables (community net metering) to improve the uptake of distributed generation. The plan also has provisions for utility level programs, programs for affordable housing, and updates for existing building and appliance codes.
- Updates to the financial and operational status of existing programs such as NY Green Ban, Property Assessed Clean Energy (PACE), and the Five Cities Energy Plan (for Albany, Buffalo, Rochester, Syracuse, and Yonkers)
- Improvement of both physical and business infrastructure for utilities. This would be accomplished through plans for upgrading and modernizing transmission grids and restructuring the utilities as distribution system platforms as per REV.
- Focus on innovation and R&D investments particularly for energy storage, new business models for utilities, and smart grid technologies.
- A comprehensive transportation plan focusing on infrastructure and regulatory support for electric cars, improved electricity utilization for public transportation, and financial mechanisms to incentivize ownership of clean fuel vehicles and reduce the use of petroleum.
- Detailed quantitative analysis on energy use patterns and costs in various segments, primarily buildings and transportation, with forecasts of energy and cost savings for buildings.
The reaction to the Plan has been largely positive from the environmental community. The Natural Resources Defense Council has stated that the plan “can not only help us build a healthier future for New Yorkers, but create thousands of local jobs and save consumers serious money on their energy bills.” The Environmental Advocates of New York praised Governor Cuomo and his team “for such an aggressive plan.”
Room for Improvement
There are certain aspects of the plan that can be improved to strengthen its effectiveness. The most significant issue with the Plan is the fact that it is non-binding. A corresponding assembly bill, A06072, which establishes greenhouse gas limits and a greenhouse gas reporting system, was delivered to the senate on April 22, 2015, but the senate has yet to take it up for a vote. If the specific targets of the State Energy Plan are not codified, they are unlikely to be realized.
The Sierra Club and Environmental Advocates of New York pointed out that the plan remains silent on the retirement of old fossil fuel plants and recent moves to cut funding from the Regional Greenhouse Gas Initiative. The Plan also makes a number of qualitative suggestions that are largely unsubstantiated.
Finally, while the Plan forecasts energy savings and electricity prices, these forecasts are not comprehensively linked to the sub-objectives. As such, it is difficult to determine their role in achieving the targets. Forecasts are not provided for other important parameters such as energy mix, emissions, and energy consumption by segment.
Recommendations
The final State Energy Plan effectively builds on the draft version published in 2014 in terms of setting ambitious targets and outlining the objectives being undertaken to meet them. However, several recommendations can be made to improve implementation of the Plan:
- The sub-objectives should be quantified to determine how they will help meet the Plan’s overall targets. The PSC recently attempted to do this, issuing a white paper quantifying the relative value of distributed technologies. The PSC’s analysis should be augmented by quantitative forecasts of how successfully accomplishing a sub-objective would contribute to meeting the overall target (e.g. Reducing X MWh of peak energy demand by year Y would lead to Z percentage reduction of greenhouse gas emissions in that year as compared to the baseline period).
- The plan focuses on positive targets such as improving energy efficiency and deploying distributed generation resources. However, certain undesirable aspects of the energy mix need to be dealt with as well, such as re-powering of older fossil fuel plants and using public funds in fossil fuel investment holdings.
- Interim targets should be set for the sub-objectives and the three high-level mandates. To ensure that the various sub-objectives are actually on-track to meet these targets, a comprehensive implementation plan should be charted.
- Any quantitative targets established as part of the Plan should be codified by the state legislature to ensure their implementation.
The State Energy Plan does a good job in setting up clean energy targets for New York and provides an excellent roadmap for achieving them. The onus is now on the various stakeholders to coordinate their efforts and design an effective implementation system to ensure that various sub-objectives are quantifiable and met on a timeframe that is consistent with the overarching objectives.
