U.S. to Withdraw from Paris Agreement, but Many CSG/ERC States Committed to Carbon Reductions

President Trump today announced that the United States will exit the historic Paris Agreement, whose 195 signatories agreed to reduce their greenhouse-gas emissions in an effort to combat climate change. Only two other nations in the world are not party to the accord: Syria and Nicaragua.

In a memo released by the White House, Trump called the pact “a bad deal for Americans.”

The Paris Agreement seeks to limit the rise in Earth’s temperature to 2 degrees C (3.6 degrees F) above pre-industrial levels. Under the Obama administration, the U.S. had committed to lowering nationwide carbon emissions 26 to 28 percent below 2005 levels by 2025.

Several northeastern states have policies in place that would meet or exceed those targets, and have been implementing programs to reach their goals (see chart below).  

In a letter last month, governors from 12 states, including five in the CSG/ERC region, urged the President to remain in the agreement, noting their successful track records in lowering carbon emissions while growing their economies and producing jobs. “Given the progress our states have made in reducing greenhouse-gas emissions, we are convinced that the United States’ goal of 26-28 percent below 2005 levels is readily achievable,” they wrote.

The Paris accord lays out a four-year exit process starting in November 2016, when the agreement took effect.

During the upcoming 2017 CSG/ERC Annual Meeting in Uncasville, Connecticut on August 13-16, CSG/ERC’s Energy & Environment Program will bring together policymakers from the northeastern U.S. and eastern Canada to discuss the challenges, and opportunities, for state clean-energy and carbon policies in the absence of the U.S.’s participation in global efforts to address climate change.  

 

Carbon and Renewable Energy Policies in the Eastern Regional Conference

State/Province Carbon-Trading Program Statewide Carbon-Reduction Goals & Participation in International Efforts Renewable Portfolio Standard
Connecticut RGGI[i] 10% below 1990 levels by 2020 (goal reached in 2012); 80% below 2001 levels by 2050.
Signatory of the “Under 2 MOU.”[ii]
Member of the Zero-Emission Vehicle (ZEV) Alliance.[iii]
27% by 2020
Delaware RGGI 30% below 2008 levels by 2030 (target recommended by a cabinet committee). 25% by 2026
Extra credit for solar or customer-sited renewables.
Maine RGGI 10% below 1990 levels by 2020; 75% -80% below 2003 levels in the “long term.” 40% by 2017.
Maryland RGGI 25% below 2006 levels by 2020; 40% below 2006 levels by 2030; 80% below 2006 levels by 2050.
Member of the Zero-Emission Vehicle (ZEV) Alliance.
25% by 2020.
Massachusetts RGGI 25% below 1990 levels by 2020; 80% by 2050.
Signatory of the “Under 2 MOU.”
Member of the Zero-Emission Vehicle (ZEV) Alliance.
15% by 2020 (new resources) and additional 1% per year thereafter; 6.03% by 2017 (existing resources). Mandated in-state solar PV target of 1600 MW by 2020. Legislation enacted in 2016 requires distribution companies to enter into cost-effective long-term contracts for 1,600 MW of offshore wind power by 2027 and 9,450,000 megawatt-hours of hydropower or other renewables by 2022.  
New Hampshire RGGI 20% below 1990 levels by 2025; 80% by 2050. Signatory of the “Under 2 MOU.” 24.8% by 2025.
New Jersey None 20% below 1990 levels by 2020; 80% below 2006 levels by 2050. 20.38% by 2020, plus 4.1% solar by 2027. Legislation enacted in 2010 requires that at least 1,100 MW of Class I renewable power come from offshore wind.
New York RGGI 40% below 1990 levels by 2030 from the energy sector; 80% below 1990 levels economy-wide by 2050.  
Signatory of the “Under 2 MOU.”
Member of the Zero-Emission Vehicle (ZEV) Alliance.
50% by 2030.
Pennsylvania None No clear targets. 18% by 2021
Puerto Rico None No clear targets. 20% by 2035
Rhode Island RGGI 10% below 1990 levels by 2020; 45% by 2035; and 80% by 2050.
Signatory of “Under 2 MOU.”
Member of the Zero-Emission Vehicle (ZEV) Alliance.
38.5% by 2035
U.S. Virgin Islands None No clear targets. 20% by 2021.
Vermont RGGI 50% below 1990 levels by 2028; 75% below 1990 levels by 2050.
Signatory of the “Under 2 MOU.”
Member of the Zero-Emission Vehicle (ZEV) Alliance.
20% by 2025; 75% by 2032; 90% by 2050.
Canada      
New Brunswick None 10% below 1990 levels by 2020; 75%-85% below 2001 levels by 2050. 40% by 2020.
Nova Scotia None 10% below 1990 levels by 2020; 80% from “current levels” by 2050. 40% by 2020.
Ontario Cap-and-trade program currently being developed.[iv]  Plans to link to Québec and California programs. Manitoba is expected to join as well. 15% below 1990 levels by 2020; 37% below 1990 levels by 2030; 80% by 2050.

Signatory of the “Under 2 MOU.”

2009 Green Energy Act created feed-in-tariffs for a number of energy sources. Goal for 20,000 MW of renewable energy by 2025, representing half of Ontario’s installed capacity.
Prince Edward Island None 75%-85% below 2001 levels by 2050. 15% renewable energy per year, beginning in 2010. Requirement eliminated in 2016. (25% of PEI’s electricity currently comes from wind energy.)
Québec Cap-and-trade program[v] linked to California and in the future, Ontario and potentially, Manitoba. Covers 85% of province-wide carbon emissions. 37.5% below 1990 levels by 2030.
Signatory of the “Under 2 MOU.”
Member of the Zero-Emission Vehicle (ZEV) Alliance.
Increase renewable energy production 25% by 2030. (99.5% of Québec’s electricity comes from hydropower, wind and residual biomass.)

 

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[i] RGGI applies to fossil-fuel fired electric power generators with a capacity of 25 megawatts or greater.

[ii] Signatories of the “Under 2 MOU” agree to either reduce greenhouse gas emissions 85% to 90% below 1990 levels by 2050 or achieve a per-capita annual emissions target of less than 2 metric tons by 2050. As of April 2017, 170 governments had signed the agreement, representing 37% of the global economy.

[iii] The Zero-Emission Vehicle (ZEV) Alliance is an effort among 13 North American and European governments to make all new passenger vehicles sold in their jurisdictions emission free by 2050.

[iv] According to proposed Bill 172, “The Climate Change Mitigation and Low-Carbon Economy Act of 2016,” the program would apply fossil-fuel distributors, industrial and large commercial operators and institutions that emit at least 25,000 metric tons of equivalent CO2 per year.

[v] Québec’s cap-and-trade program applies to businesses that emit at least 25,000 metric tons equivalent of CO2 per year. This includes the industrial and electricity sectors and fossil-fuel distributors.

Amid a Spate of Nuclear Plant Closings, State Officials Mull Economic, Environmental Impacts

Nuclear power has long been a mainstay of the Northeast’s energy mix, but a wave of planned retirements has fueled a debate about the fate of aging reactors, and their value to the region’s economy as states work to achieve a variety of energy and climate goals.

In New York and Connecticut, independent analyses have shown that if nuclear plants were to close prematurely, much of the replacement power would come from the burning of fossil fuels, because it would be impossible to ramp up enough wind and solar generation to offset the electricity, at least in the near-term. That would lead to an increase in emissions of carbon and other pollutants, making it challenging to meet states’ climate objectives.

The studies advise that discussions around the future role of nuclear power consider a full accounting of the avoided costs of carbon-free generation compared with fossil fuels – to consumers, the environment and public health.

New York’s Policy

Last year, New York regulators assessed those costs before they approved subsidies to help the James A. FitzPatrick, R.E. Ginna and Nine Mile Point nuclear plants, located upstate. The plants were considering closing because of stagnant energy demand, and fierce competition with rock-bottom natural gas prices in interstate energy markets. Audrey Zibelman, chairwoman of the New York Public Service Commission, told The New York Times last August that the social and economic benefits of New York’s program — including reduction of carbon emissions, lower prices for electricity and jobs in the power-generation industry — would be much greater than the cost to ratepayers, which state officials estimate will total less than $2 a month.

The reactors provide more than 3,300 megawatts of power combined, some 15% of the state’s electricity output. They also supply 61% of the state’s carbon-free generation, and if they shut down, their power would be primarily replaced with natural-gas generation, according to an analysis from The Brattle Group.

Zibelman said the resulting rise in emissions would detract from Gov. Andrew Cuomo’s goal of cutting carbon emissions 40% below 1990 levels by 2030, and 80% by 2050. The economic toll would be high, too: consumers would be expected to pay $15 billion more in electricity prices over the next ten years, and the costs to the environment and human health from increased emissions of carbon dioxide, sulfur dioxide, nitrogen-oxides and particulates would total an estimated $736 million.

The New York policy and a similar one that would help two struggling plants in Illinois is opposed by electric generators, who made two filings at the Federal Energy Regulatory Commission (FERC) arguing the subsidies distort and undermine wholesale power markets.

Elsewhere in the Northeast, the Vermont Yankee plant retired in 2014, and two more reactors are scheduled to close in 2019, nearly a decade or more before their scheduled license expirations: Entergy Corporation’s Pilgrim plant in eastern Massachusetts, and Exelon’s Oyster Creek plant in eastern New Jersey.

Legislative Efforts in Connecticut: Assessing the Avoided Costs of Carbon-Free Power

In Connecticut, which gets 60% of its power from the 2,111-megawatt Millstone Nuclear Power Station, state lawmakers are debating a proactive strategy to ensure the plant stays in operation in the coming years.

Although Millstone’s owner, Dominion Energy, has not announced plans to close, lawmakers are considering a measure that would enable the plant to compete in a state renewable energy procurement program, as a way to lock in long-term power prices for a portion of its output. Proponents stress the bill’s intent is to enhance affordability for ratepayers, and guarantee a continued supply of zero-emission power to help the state meet its target of reducing greenhouse gas emissions 80% below 1990 levels by 2050. Millstone provides 98% of Connecticut’s carbon-free electricity.

Instead of offering subsidies to support nuclear output as New York and Illinois have done, the bill’s sponsors have made it clear that their approach is market based, and is intended to encourage the growth of renewables, too.

The legislation, which passed the joint Energy and Technology Committee last week, would enable the plant to secure long-term contracts for nearly half of its output, avoiding the volatility of daily wholesale power markets. Millstone had been insulating itself from the highs and lows of the spot market by selling energy through a series of futures contracts that run for three years. But the daily market is so volatile that the futures market has faltered, the Connecticut Mirror reported last year. Company officials have said the bill will lead to lower electricity prices for consumers.

The proposal has led to a heated debate in Connecticut, with opposition coming from petroleum industry, consumer advocates, and environmental groups worried that allowing nuclear power to compete in a market reserved for renewables will undercut prices for wind, solar and other emerging energy sources, just as natural gas prices have undercut nuclear power.

But the version that was voted out of the Energy and Technology Committee included language specifically intended to prevent cheaper nuclear power from jeopardizing the state’s growing clean-energy industry. The bill would enable Millstone to sell 950 megawatts of power – a little less than half its total output — through a state-run bid process, but limits its contract to five years. That compares with the 20-year contracts permitted for renewable generation. The legislation specifies that Millstone’s proposal must be in the “best interest of ratepayers.”

The bill also calls for an escalation of clean-energy development. It would extend, for at least one more year, the state’s popular zero-emissions (ZREC) and low-emissions (LREC) programs, which offer incentives for the deployment of distributed generation through a competitive reverse auction. In addition, it ramps up the state’s clean-energy mandate, requiring that by 2040, the state obtain 40% of its power from renewables, which is double the 2020 goal. Lawmakers are still negotiating to add some additional renewables “encouragers” as well, said Rep. Lonnie Reed, House chair of the Energy and Technology Committee.

Their thinking is that encouraging Millstone to keep running, at least in the near-term, would avoid an increase in emissions from fossil fuel generation while new capacity comes online from solar installations, wind turbines, fuel cells and other sources. Reed said that if Millstone were to shut down, there is a real danger that duel-fuel natural gas and oil plants would be built to replace the reactor’s massive output in order to meet Connecticut’s and New England’s electricity capacity needs. Those plants can be constructed much faster than the equivalent capacity from renewable generation, for a variety of reasons, but they emit carbon and other pollutants.

“Gas plants are ISO New England’s back-up plan, since air quality is not their mandate,” said Reed, referring to the nonprofit entity that oversees the region’s wholesale electricity markets. “Reliability and capacity are.”

Studies show that if Millstone were to close in the near future, consumers would pay more.

According to a report last year from the Analysis Group, a private economics consulting firm, if Millstone remains open until its operating license runs out in 2030, consumers throughout New England will reap $6.2 billion in net benefits. That includes an average $500 in annual savings for residential electricity customers in Connecticut over the next thirteen years, and $1.5 billion in avoided costs to the region’s wholesale electric capacity markets.

Conversely, if Millstone were to close prematurely, average consumer electricity prices would be 21% higher by 2030. Replacing the plant’s power over the short-term would require a mix of existing and new natural gas generation, both from in-state generators and in the region. That would stress the local natural gas markets, which supply heat and industrial fuels in addition to electricity, and lift costs.

Emissions of greenhouse gases and other pollutants would rise, too. The carbon-dioxide pollution avoided through Millstone’s operations is roughly equivalent to taking nearly 470,000 passenger cars from the road each year. Early retirement of the plant would boost greenhouse-gas emissions by 2.2 million metric tons annually, some 33%, making it challenging for the state to meet its climate targets. Nitrogen-oxide pollution would increase 38%, thus contributing to worsening air quality.

While the research did not quantify the economic impacts from higher emissions, a number of studies have shown that avoided pollution leads to improved health and economic outcomes for society, because fewer air-pollution-related illnesses means less money spent on medical treatments and lower absenteeism among American workers.

The report’s authors note that their analysis was based on conservative assumptions. They assumed that Connecticut and the other New England states will be able to fully meet their current energy and climate goals, in terms of adding increasing supplies of renewable energy. That includes contracting for hydroelectric imports from Canada from the Northern Pass electric transmission project by June 2020, though the project has yet to receive state and federal approvals. Additional supplies of renewables would make the economy more energy efficient, and thereby mitigate natural gas price increases, the report explains.

“But if natural gas prices spike higher than expected, if there’s slower than hoped-for progress in other things you’re doing in your transition, then the value to Connecticut customers is larger” if Millstone remains in operation, said Sue Tierney, senior advisor at the Analysis Group, during a televised hearing on January 24 in Hartford.

Those who favor policies to keep the region’s nuclear plants up and running observe that concerns about rising emissions in New England aren’t hypothetical. In 2015, the year after the Vermont Yankee nuclear plant closed, the region saw emissions rise for the first time in five years, The Boston Globe reported.

“I wasn’t a particular fan of nuclear plants, but I feel they are so important for affordability of a decarbonization strategy that I think it’s important to tell this economic story: That it’s good for consumers, that it’s good for avoiding global warming to think about keeping these safely operating plants online as much as you can,” said Tierney during her testimony. “And to rely on market based principles as a way to get there…to focus on the power of competition.”

A Question of Priorities

Many of those engaging in the policy debate over the future of the region’s nuclear fleet emphasize that it is a question of priorities, and choosing from an imperfect set of options. There are safety issues associated with nuclear power, and costs surrounding the storage of nuclear waste, which is being held in pools and dry casks on the site of the nation’s 99 commercial reactors, given the lack of a national long-term repository for spent fuel.    

Some environmentalists insist that it is possible to address climate change without nuclear power, by promoting an energy mix based on wind, solar, hydroelectricity and storage. They point to officials’ aggressive push to accelerate clean-energy development in a number of states.

In Massachusetts, where the 680-megawatt Pilgrim Nuclear Power Station is set to shut down in two years’ time, officials are hoping to dramatically increase imports of Canadian hydroelectric power, and take advantage of the nascent offshore wind industry here. Last year, Gov. Charlie Baker signed legislation requiring utilities to procure 1,600 megawatts of electricity from offshore wind in a little over ten years, enough energy to power half a million homes. The law also calls on the state to competitively solicit long-term contracts of up to 20 years to procure 1,200 megawatts of hydropower or other renewable resources, and authorizes the state to secure an energy-storage procurement goal.

More than half a dozen transmission lines have been proposed to bring lower-cost Canadian hydropower into New England and New York state, though so far, only one has obtained all of the required siting permits, a proposed 1,000-megawatt cross-border transmission line known as the Clean Power Link.

In New York, officials’ approval of subsidies for the three upstate nuclear plants contrasts with Gov. Cuomo’s recent announcement of a deal to close the Indian Point Nuclear Plant, located less than 30 miles north of Midtown Manhattan, a decade ahead of schedule. Cuomo has said his administration has identified replacement sources of power for the plant, including offshore wind, hydroelectricity and efficiency.  Cuomo has set a target for the state to get half of its power from renewables by 2030.

Others have argued that given the short window of time to available to address climate change in order to avoid devastating global impacts, nuclear power must play a critical role. “The key time frame for mitigating the climate crisis is the next decade or so,” warns a 2013 study  from James Hansen at the NASA Goddard Institute for Space Studies and Columbia Earth Institute. The research calculated that global nuclear power has prevented an average of 1.84 million air pollution-related deaths that would have resulted from fossil-fuel burning, and avoided 64 gigatonnes of carbon-dioxide-equivalent greenhouse gas emissions.

In Connecticut, Rep. Reed said it should be possible to include nuclear power in a strategy to help renewables thrive.

She noted that two of the largest grid-scale renewables projects built in Connecticut in recent years were financed by Dominion Energy, Millstone’s owner:  a 14.6-megawatt fuel-cell project on a brownfield in Bridgeport, and a 5-megawatt solar array on a farmer’s field in Somers.

“I see the potential to create some more intelligent synergies that allow Dominion to help grow our renewables capacity, while also receiving the economic certainty they are looking for to keep Millstone around and churning out our baseload zero-carbon electricity until our renewables are ready for prime time here in New England, where siting anything is a nightmare,” said Reed.

 “We need a realistic transitional plan,” she added. “This requires thinking outside the usual rigid silos that seem to accompany energy industry planning.”

Wind Generation Surpassed Hydroelectric Power in 2016 – U.S. EIA

Last year, wind energy generation in the United States edged out conventional hydroelectric output, which has historically been the nation’s largest source of renewable energy, the U.S. Energy Information Administration said in a brief published March 6.

Wind power now generates 5.5% of the nation’s electricity, four times more than solar power, and enough to power 24 million homes.

Five states got at least 20 percent of their electricity from wind last year – Oklahoma, Iowa, Kansas, North Dakota and South Dakota, according to the American Wind Energy Association (AWEA). Overall, 13 states generated at least 10% of their electricity from wind, including two northeastern states: Vermont, where turbines produced 15.3% of the state’s electricity mix, and Maine, with 13.1%, AWEA said.

Courtesy of the American Wind Energy Association.

In Texas, by far the leader in U.S. wind production, the Electric Reliability Council of Texas (ERCOT) system, which covers most of the state, continues to set records for the highest level of wind generation on any U.S. electric system, EIA said. The system set the most recent record on the morning of December 25, 2016, when turbines produced 16,022 megawatts (MW) of electricity, accounting for slightly more than 47% of the generation mix at the time.

Another major wind producer is the Southwest Power Pool, which extends from northern Texas to North Dakota and Montana. In the early hours of February 12, wind power supplied more than half of the system’s generation mix for a brief period, reaching 52.1% (11,419 MW). That is considered a first for any of the seven U.S. regional transmission organization (RTO) electric systems that together serve two-thirds of the country’s electricity consumption, the brief said.

While wind generation is most abundant in the Midwest, the National Renewable Energy Laboratory found that there is significant room for expansion in the East. The Eastern Interconnection, the grid serving most of the Eastern U.S., could integrate at least 30 percent wind and solar power, the agency said.

Many states in the Northeast have aggressive Renewable Portfolio Standards, as follows:*

State Renewable Energy Goal
Vermont 75% by 2032
New York 50% by 2030
Maine 40% by 2017
Rhode Island 38.5% by 2035
Connecticut 27% by 2020
Maryland 25% by 2020; plus 2.5% solar electric by 2020
Delaware 25% by 2026; plus 3.5% solar PV by 2026
New Hampshire 24.8% by 2025
New Jersey 20.38% by 2020; plus 4.1% solar electric by 2028
Pennsylvania** 18% by 2021; plus 0.5% solar PV by 2021
Massachusetts 15% by 2020; plus 400 MW solar PV by 2020

*Source: North Carolina Clean Energy Technology Center.

**Includes non-renewable alternative resources.

The EIA brief notes that compared with other electricity generating sources such as nuclear, geothermal, and combined-cycle natural gas, hydro and wind have lower average capacity factors (i.e., generation output as a percentage of total generating capacity). Both sources are sensitive to fluctuations in weather conditions such as droughts, heavy precipitation, and changes in regional wind patterns. You can see data showing seasonal wind generation patterns across regions here.

Despite the industry’s gains in 2016, hydroelectric generation is expected to exceed wind production this year, given the hydroelectric fleet’s higher average capacity factors and the above-normal precipitation on the West Coast so far this year, the report said. The Pacific Northwest and California produce about half of all hydropower in the U.S.

Report Finds Efficiency Could Replace Power from Indian Point Nuclear Plant in New York

Last month, when New York Gov. Andrew Cuomo announced a deal to close the Indian Point Nuclear Power plant by 2021, some experts questioned whether the plant’s output could be replaced without relying on large quantities of natural gas. Indian Point supplies one quarter of the electricity consumed by New York City and Westchester County.

Under Gov. Cuomo, New York has established aggressive renewable energy and carbon-reduction goals, and the governor said the state had identified zero-emitting sources to replace the plant’s generation, including  investing in offshore wind, and adding new transmission lines to deliver large quantities of hydropower from Québec.

A new report from Synapse Energy Economics, Inc., estimates that more efficient energy use alone could replace all of Indian Point’s annual energy production of roughly 16 terawatt-hours (TWh) by 2023, and lead to efficiency gains that are more than double the plant’s output, by 2030.  In addition, through deployment of energy efficiency and renewable energy, the state can “easily” exceed its goal of cutting electric-sector greenhouse gas emissions 40% below 1990 levels by 2030, said the report, which was prepared for two environmental groups, Riverkeeper and the Natural Resources Defense Council.

Under New York’s Clean Energy Standard, energy efficiency measures must yield energy savings equivalent to 1.5% of annual retail sales, or 2.2 TWh of electricity, by 2025. The researchers found that by ramping up the energy-efficiency requirement to 3% of retail sales by 2021 — an energy savings of 4.6 TWh a year — all of the consumption that would otherwise be met with power from Indian Point could be met through more efficient energy use, within eight years from now. The report stresses that the more aggressive energy savings are achievable, and points out that in recent years, utilities in multiple New England states, including Massachusetts and Rhode Island, have achieved annual efficiency savings of roughly 3% of retail sales.

The researchers also modeled various other scenarios, including the completion of a transmission line to carry hydroelectric power from Québec to New York State, known as the Champlain Hudson Power Express. The project has reportedly received most of the state and federal approvals it needs to begin construction.

The analysis showed that hydropower supplied by the transmission line would make up around 43% of Indian Point’s power. If there were no changes to the state’s energy-efficiency requirements, in order to bridge the supply shortfall – and avoid importing non-Québec energy or boosting in-state fossil fuel generation — the state would need to increase power production from renewables beyond the requirements in its current Clean Energy Standard, a situation that would cost more than the aggressive energy efficiency scenario, the report said. (Québec hydropower cannot be used to achieve compliance with the state’s Clean Energy Standard.)

Ultimately, the overall costs to the electricity system to replace the generation supplied by Indian Point are estimated to range from 0.2% to 2.1%, and will hinge on the technologies that are used, as well as total demand in the state, said the report.

NY Gov. Cuomo Announces Deal to Close Indian Point Nuclear Plant

The Indian Point Nuclear Plant will close in four years, more than a decade ahead of schedule, a deal that “eliminates a major risk” to the safety of New Yorkers, Gov. Andrew Cuomo announced in his State of the State address in Lower Manhattan on Monday.

The plant is located less than 30 miles from Midtown Manhattan, and Cuomo has long advocated for its closure, noting that in the event of an accident, evacuation would be all but impossible for the more than 20 million people who reside in New York City and its surrounding areas. 

“New York City sits 30 miles from a ticking time bomb,” said Cuomo during the address. “This agreement eliminates a major risk, and provides welcome relief. New Yorkers can sleep a little better.”

The deal between the state and Entergy, the plant’s operator, calls for the reactor to shut down by April 2021, fourteen years ahead of schedule. An Entergy official told the The New York Times the company had assented to closing the plant early because cheap, abundant natural gas had made nuclear power less profitable.

Some industry sources questioned how the state would replace the 2,000 megawatts of power produced by the plant, which supplies about a quarter of the electricity used by New York City and Westchester County, while meeting the state’s carbon-reduction goals and its requirement that utilities get half of their power from renewable sources by 2030. Some experts expressed skepticism that the power could be replaced without relying on large quantities of natural gas.

Cuomo said the state had identified replacement sources of power for Indian Point, including investing in renewable energy.

The governor has prioritized investments in renewables as part of his administration’s energy-system overhaul, Reforming the Energy Vision, or REV, which was launched in 2014. The state has established a number of incentive programs and financing vehicles, including a 10-year, $5 billion Clean Energy Fund and a $1 billion New York Green Bank, a state-sponsored entity that was launched to partner with private-sector lenders to support renewable-energy projects.

New York has also pledged to lower its carbon emissions 40% below 1990 levels by 2030, and 80% by 2050. The state participates in the nine-state Regional Greenhouse Gas Initiative (RGGI), which caps emissions from large power plants. In his address on Monday, Cuomo said that New York would reduce its RGGI cap by 30% by 2030.

In a statement on the Indian Point closure plan that provides some details on replacement power options, the governor said that transmission upgrades and efficiency measures have already produced over 700 megawatts of power, and that several new sources of generation are fully permitted and readily available to come online by 2021, after the plant’s closure, including up to 1,000 megawatts of hydropower.

In his speech, Cuomo specifically mentioned plans to invest in offshore wind, and to add new transmission lines to deliver large quantities of hydropower from Québec.

Here is a brief overview of efforts related to those energy sources in New York, and elsewhere in the region.

Offshore Wind

Cuomo is among several officials in the Northeast who have been working to establish a thriving offshore wind industry here, though the sector is in its infancy in the U.S., with only one project currently in operation, a 30-megawatt pilot off the coast of Block Island, Rhode Island. That project went online in December. Although other projects are in the early stages of development up and down the Eastern Seaboard, it is expected to take several years, or even a decade or more, for a utility-scale wind farm to be built and operational in U.S. waters. Still, New York is among several east-coast states that are forging policies to attract the massive supply chain that is critical to supporting a robust offshore wind industry here. 

The Cuomo administration is developing an Offshore Wind Master Plan, expected to be released this year. Officials are studying a 16,740-square-mile area of the ocean, from the south shore of Long Island and New York City to the continental shelf break, for potential future sites for offshore wind, according to a report released last year. The report found that offshore breezes along the state’s Atlantic coastline could produce enough electricity to power 15 million homes. Last July, Cuomo announced his support for a proposed 90-megawatt wind farm 30 miles east of Montauk, which would provide power to the South Fork of Long Island. In December, Statoil provided the winning bid in the federal government’s online lease sale of more than 79,000 acres in another offshore wind area, some 14 to 30 miles off the New York coast. The lease grants the company the rights to explore the potential development of an offshore wind farm to supply power to New York City and Long Island. In a press release, Statoil said the area could potentially accommodate turbines producing up to 1 gigawatt of power.

Hydropower

More than half a dozen transmission lines have been proposed to bring lower-cost Canadian hydropower into New England and New York state, but so far, only one has obtained all of the required siting permits, a proposed 1,000-megawatt cross-border transmission line known as the Clean Power Link. 

The project is a 154-mile underground transmission line that that is being developed with private-sector financing by TDI New England. It will originate at the U.S.-Canadian border, and extend some 154 miles under Lake Champlain, to Ludlow, Vermont, the company said in a statement last month.

Sean Klimczak, senior managing director of Blackstone group, the project’s lead investor, said the approval makes the company well positioned to respond to Massachusetts’ upcoming clean-energy solicitation for 1,200 megawatts of base load hydropower and onshore wind, according to the statement. Legislation approved by the Massachusetts Legislature last year requires the state to solicit long-term contracts of up to 20 years to procure 1,200 megawatts of hydropower or other renewable resources, and 1,600 megawatts of offshore wind power.

TDI is developing another project, the $2.2 billion Champlain Hudson Power Express, which would bring up to 1,000 megawatts of hydropower to the New York City metropolitan area. As proposed, the line would be buried along railroad right-of-ways and under waterways, including Lake Champlain and parts of the Hudson River.

Cuomo’s address on Monday, which was held at the World Trade Center in New York City, was one of six planned State of the State speeches that the governor will deliver across New York this week.

You can watch Monday’s address here.

Benefits of State Clean Energy Mandates Outweigh Costs, Federal Report Finds

The costs associated with implementing state renewable-energy standards between now and mid-century will be far outweighed by the benefits to public health and the environment, a new federal report finds.

The report was released jointly by the Lawrence Berkeley National Laboratory and the National Renewable Energy Laboratory, and is the third in a series of federal studies assessing state clean-energy policies.

Currently, 29 states and the District of Columbia have Renewable Portfolio Standards (RPS), which require utilities to derive an increasing share of power from clean-energy sources over time.

These policies have been a key driver for the growth of non-fossil-fuel generation, and have been responsible for more than half of all renewable capacity additions since 2000, according to the study. (Other drivers include federal tax credits and other state policies.)

Electricity from solar, wind, hydroelectric power and other renewable sources comprised about 14% of U.S. electricity generation in 2015. As the policies currently stand, most states are expected to reach their maximum targets for renewable generation between 2020 and 2025, though eight states have targets that increase until 2030 or beyond.  

In recent years, many states have raised their RPS requirements, with seven states raising and extending them in 2015 and 2016 alone, and one state—Vermont—enacting a new RPS. There have also been efforts in a number of states to repeal or freeze existing RPS policies. In late December, Ohio Gov. John Kasich vetoed legislation that would have effectively extended a freeze on that state’s RPS that had been in effect for two years.

The report notes that officials in some states will likely look to expand and strengthen state RPS programs in the coming years, while efforts to repeal or freeze existing policies may persist in other states.

Quantifying Future Benefits

The new analysis seeks answers to two questions not covered by the previous reports: What are the potential future costs, benefits, and impacts of renewables used to meet state RPS programs from 2015-2050, as they are currently structured? And, how would the costs and benefits change with greater levels of renewable deployment?

The study considers two different scenarios: an “existing RPS” scenario, in which renewable energy requirements continue to grow based on current state RPS policies as of July 2016; and a “high RPS” scenario, in which most states adopt relatively aggressive targets in the coming years. Those two scenarios are measured against a hypothetical baseline which assumes no further growth in RPS requirements beyond 2015.

Under the “existing RPS” analysis, renewables will account for 26% of total U.S. electricity generation by 2030 and 40% by 2050, compared with the baseline scenario of 21% by 2030 and 34% by 2050.

In the “high RPS” analysis, renewables reach 35% of total electricity generation by 2030 and 49% by 2050.

In both the “existing RPS” and “high RPS” scenarios, fossil-fuel generation declines, compared with the baseline. This leads to lower quantities of sulfur dioxide, nitrogen oxides and fine particulates spewing from smokestacks, which in turn improves air quality and avoids premature deaths from pollution. Less fossil-fuel generation also lowers greenhouse-gas emissions and reduces electricity-sector water use.

The researchers estimate that the monetary benefits associated with these public health and environmental improvements will exceed the costs of greater penetration of renewable generation in the nation’s electricity system, “even when considering the highest cost and lowest benefit outcomes.”

For example, in the “existing RPS” scenario, incremental electricity-system costs range from plus or minus $31 billion during 2015-2050, while the air-quality benefit is estimated at $97 billion. During that same period, life-cycle greenhouse gas emissions fall by 6%, which lead to $160 billion in global benefits.

This translates to a levelized, high-end cost of 0.75¢ per kilowatt-hour of electricity, which is outweighed by air pollution and health benefits of at least 1.2¢ per kilowatt-hour, and greenhouse-gas-reduction benefits totaling at least 0.9¢ per kilowatt-hour.

For the “high” renewable energy scenario, estimated incremental electricity-system costs range from $23 billion to $194 billion from 2015-2050, while air-quality benefits are estimated at $558 billion.  Cumulative life-cycle greenhouse-gas emissions decrease by 23%, resulting in $599 billion of global benefits.

This translates to a levelized, high-end electricity cost of 1.5¢ per kilowatt-hour, compared with air pollution and health benefits totaling at least 2.7¢ per kilowatt-hour, and greenhouse-gas-reduction benefits of at least 1.2¢ per kilowatt-hour.

Compared with the baseline scenario, water consumption falls in both analyses. By 2030, annual water consumption savings are equal to the water demands of 420,000 U.S. households under the “existing RPS” scenario, and to those of 1.9 million households in the “high RPS” scenario.

Both scenarios lead to more jobs in the renewable-energy sector and to a drop in demand for natural gas, though the study considers those impacts to be resource transfers rather than societal benefits – explaining, for example, that the rise in jobs will be offset by a decrease in employment in other economic sectors.

The authors mention a number of caveats and limitations in the scope of the study, which does not take into account recent changes in state renewable-energy policies since late summer. The analysis was completed before New York officials increased the state’s RPS last August to 50% by 2030, up from 29% by 2015, and prior to a vote among Michigan lawmakers last month to approve legislation expanding that state’s RPS to 35% by 2025. The report also notes that aside from state mandates, a variety of other policy and market forces may contribute to renewable-energy growth over the study’s horizon, and to the associated benefits.

You can read a fact sheet that details the report’s findings here.

First-in-the-Nation Offshore Wind Farm Comes Online in Rhode Island

Last week, America’s first offshore wind farm, a 30-megawatt project situated off the coast of Block Island, Rhode Island, began to deliver electricity into the New England Power grid. Proponents of the industry hope the pilot will jump-start a thriving U.S. industry in the coming years.

The $300-million, five-turbine wind farm, developed by Deepwater Wind, will supply the bulk of the power used by Block Island, and end its reliance on diesel generation. In a statement, Deepwater Wind CEO Jeff Grybowski said he was confident the project will be the first in a series of larger, utility-scale wind farms that will employ thousands of workers up and down the East Coast, and send abundant, low-carbon power into the region’s power grid. Deepwater Wind is reportedly planning larger offshore wind projects some 15 to 25 miles from the coast to serve multiple states, including New York, Maryland, Massachusetts, Rhode Island, and New Jersey.

Studies show the region is well-situated for ocean-based wind power, given the existence of powerful coastal air currents along the U.S. coastlines, which, if harnessed, could produce enormous quantities of clean power for U.S. residents and industry. According to the U.S. Energy Department, offshore wind has the potential to produce 2,000 gigawatts of power per year, nearly double the nation’s annual energy use. This means that even if only 1% of the technical potential is recovered, ocean-based wind could power nearly 6.5 million homes, according to the agency.

In recent years, offshore wind-industry representatives, federal agencies and policymakers in the Northeast have been engaged in efforts to promote an ocean-based industry along the Eastern Seaboard, in the hopes that a robust, domestic offshore wind sector could transform the region’s energy economy and help to achieve multiple public-policy goals, such as: helping states meet their renewable-energy and pollution reduction goals; creating high-paying jobs that cannot be outsourced; and, through economies of scale, lowering electricity rates, which are among the highest in the nation.

But the industry lags far behind Europe, long the leader in offshore wind, where ocean-based turbines have been producing power since 1999. As of the end of 2015, there were more than 11 gigawatts of installed wind-generation capacity operating in the waters of 82 countries, according to the European Wind Energy Association.

Federal Action

Under the Obama administration, the federal government has engaged in a number of actions to promote offshore wind and collaborate with the states. The administration has funded a multi-state effort with Maine, Massachusetts, Rhode Island and New York to create a regional roadmap on offshore wind, aimed at large-scale deployment of ocean-based turbines and development of a supply-chain with high-paying jobs. By the end of 2015, the U.S. Department of the Interior had awarded 11 commercial leases for offshore wind development in the Atlantic Ocean that could support a total of 14.6 gigawatts of capacity, according to the U.S. Department of Energy’s 2016 National Offshore Wind Strategy Report. The Obama administration estimates that by 2030, offshore wind farms along the U.S. coastlines, in the Gulf of Mexico and the Great Lakes will be supplying 22 gigawatts of electricity annually, enough to power 4.5 million homes.

The agency cites a number of potential benefits to states and the electricity system from ocean-based wind. Along many regions of the coastline, winds blowing offshore tend to be strong at times of peak power demand, which could help lower wholesale electricity prices in many markets, and also provide a hedge against fossil-fuel price volatility. The development of utility-scale offshore wind projects could potentially serve as a replacement for baseload power supplied by aging nuclear power plants set to retire in the coming years, and help states meet their clean-energy mandates. It could also decrease transmission congestion and reduce the need for new, land-based long-distance transmission.

Nevertheless, cost continues to be a deterrent here. Currently, offshore wind is still too expensive to compete in most U.S. electricity markets without subsidies. In Rhode Island, power supplied to residents from the Block Island Wind Farm will cost $1.07 a month more than their current rates, or 24.4 cents per kilowatt-hour, and increase by 3.5% annually for 20 years. However, the Department of Energy was optimistic that as the industry establishes itself and develops economies of scale, it could vie with other forms of generation within the next ten years.

An encouraging example is the industry’s experience in Europe, which has benefited from significant cost reductions as ocean-based wind power and its supply chain have grown and matured. Between 2010 and 2014, the levelized cost of energy from offshore wind projects installed in the United Kingdom dropped by 11%, according to the Department of Energy report. (The levelized cost of energy is a commonly used metric for the cost of electricity produced by a power generator over the life of a project, and generally takes into account capital expenditures, operating and maintenance costs, cost of capital, and the expected annual energy production of an offshore wind farm. It is different from the price of energy in a power purchase agreement).

A study released last March by the University of Delaware’s Special Initiative on Offshore Wind found that in Massachusetts, where several ocean-based wind projects have been proposed in recent years, a commitment to produce 2,000 megawatts of offshore wind power, combined with ongoing industry and technological advances, would lower the cost of the energy source by 55% below previous projections. The study also says that offshore wind has the potential to produce all of the electricity used by northeastern states – a resource far greater than onshore wind or solar.

Developing a Regional Ocean-Energy Economy

The promise of harnessing an abundant source of carbon-free power that could spur an entire new industry has led officials in a number of states to devised policies to attract developers to the region.

Earlier this year, Massachusetts Gov. Charlie Baker signed a bill requiring utilities to procure 1,600 megawatts of electricity from offshore wind in a little over ten years, enough energy to power half a million homes.

In New York, which has a mandate to produce 50% of its energy from clean sources by 2030, the administration of Gov. Andrew Cuomo is developing an Offshore Wind Master Plan, expected to be released next year. The state is studying a 16,740-square-mile area of the ocean, from the south shore of Long Island and New York City to the continental shelf break, for potential future sites for offshore wind, according to a report released earlier this year. The report found that offshore breezes along the state’s Atlantic coastline could produce enough electricity to power 15 million homes.

A study released last year from University of Delaware researchers found that New York State could take a number of steps, independently or with other states, that could lower costs for offshore wind power as much as 50 percent.  Among the companies investing in the industry there is Statoil, which last week provided the winning bid in the federal government’s online lease sale of more than 79,000 acres some 14 to 30 miles off the New York coast. The lease grants the company the rights to explore the potential development of an offshore wind farm to supply power to New York City and Long Island. In a press release, Statoil said the area could potentially accommodate turbines producing up to 1 gigawatt of power.

One of the key findings in the University of Delaware study was that using larger, more efficient turbines, along with other technology and supply-chain advances, could help reduce the high cost of construction, which has been a major impediment to the industry’s establishment here.

Lowering costs has been a chief goal of researchers at the University of Maine’s Advanced Structures and Composite Center. For more than a decade, they have been developing floating turbines that can operate in waters more than 150 feet deep, harness the powerful winds in the Gulf of Maine, and be built for a fraction of the expense of a conventional turbine. The Gulf of Maine is considered to have the best offshore wind resource in North America, where strong, consistent winds have the potential to produce 156 gigawatts of power. (For the sake of comparison, consider that a nuclear power plant generates roughly 1 gigawatt of energy.)   

Last May, their efforts received an important boost from the Department of Energy, which awarded $43.7 million toward an offshore wind project they are spearheading, known as New England Aqua Ventus 1. Along with two project partners, Emera Inc. and Cianbro Corporation, the consortium plans to build a 12-megawatt floating offshore wind farm in 2018 using proprietary turbine technology patented by the University of Maine. The turbines were specifically devised to float in Maine’s deep waters without the need to be tethered to the sea floor, and utilize technology that could reduce the cost of hull construction by 50%, according to Habib Dagher, director of the University of Maine Advanced Structures and Composites Center, during a presentation at the CSG/ERC Annual Meeting last August. Developers hope the demonstration project will lead to the creation of a much larger, utility-scale wind farm further offshore, and help comply with the goals set out in the Maine Ocean Energy Act of 2010, which calls for developing 300 megawatts of ocean-based wind by 2020, and 5 gigawatts by 2030.

In the long-term, Dagher envisions a day in the future when utility-scale turbines in the Gulf of Maine churn out more than enough electricity to heat all of Maine’s homes, and power the entire vehicle fleet. Currently, 70% of residents heat their homes with heating oil, at an average cost of $4,000 annually, and a typical household spends another $5,000 on gasoline to run their cars and trucks. All of that money – some $6 billion annually — flows out of state, said Dagher. Creating large-scale ocean-based wind farms would lead to economies of scale that could dramatically lower the cost of power, making it far more economical for residents to transition to electricity for heat and to electric vehicles for transportation. As an added benefit, the money spent on energy would stay in the state, he said.

“Our goal is to not just create electricity with offshore wind,” said Dagher. “Our goal is to fill up the vehicles and heat the homes.”

In New York’s Fast-Growing Solar Market, A Focus on Assessing “Value”

As New York proceeds with its energy-system overhaul, solar power is booming, and regulators and industry sources say that finding a way to accurately value solar’s contribution to the grid will be key to sustaining that growth.

Gov. Cuomo’s Reforming the Energy Vision, or REV, aims to incentivize utilities to incorporate solar, wind and other distributed resources into their operations, as an alternative to traditional grid investments. The goal is to create a more resilient, greener, more affordable grid, and help New York achieve its ambitious clean-energy and climate targets, including getting half of the state’s energy from renewable sources by 2050.

By all accounts, the market is soaring.  Solar development has climbed from 74 megawatts (MW) in 2011 to more than 600 MW today, enough to power around 100,000 homes, and the state has the fastest-growing solar workforce in the country. That upward trajectory has been propelled in part by NY-Sun, a $1 billion program that offers incentives to homeowners, businesses and commercial establishments to install solar panels.

Requests from residents looking to host solar arrays have skyrocketed in some utility territories. “We went from receiving about 1,000 applications a year to about 1,000 applications a month,” said Michael Voltz, director of energy efficiency and renewables for PSEG Long Island, during a solar summit organized by the City University of New York on June 20. “I’m not really surprised about the change; what I’m really surprised about is the pace,” he said.

North of New York City, some utilities in Orange County have been inundated with applications from solar developers looking to participate in the state’s new Shared Renewables program, which launched on May 1. The program enables New Yorkers to purchase a portion of their power from a solar installation located in their community. It’s aimed at the nearly three-quarters of the state’s residents who are renters or otherwise can’t host solar panels on their property.

Land in Orange County is relatively cheap, and power demand is high, which makes the investment in community solar projects attractive to solar developers there, said utility leaders speaking at the conference. But they cautioned that cost and logistical issues mean it simply isn’t possible to incorporate the quantity that has been proposed.

For example, Central Hudson Gas & Electric Corporation has received applications to build a total of 700 MW of solar, 12 times the current solar generation in its service territory. The utility serves nearly 380,000 electric and gas customers in a region stretching from the suburbs north of New York City to Albany. Interconnection costs in its distribution area are so steep that to integrate that amount of new solar power, the utility would have to raise rates by 37 percent, said Anthony Campagiorni, vice president of business development and government affairs. “It’s just not feasible,” he said.

“The [Public Service Commission’s] order on community distributed generation has opened up the floodgates,” said Campagiorni. “Now we have to get to the granular level of focusing on the value of these projects…and how we can incorporate [them] most cost-effectively.”

Utility leaders at the conference said it is critical that new installations get added to the grid where they are needed most – for example, in places where the additional power can reduce grid congestion during demand peaks, and avoid the need for utilities to fire up dirty, costlier “peaking” plants that are brought online occasionally, when extra supply is required.

“You want to incentivize customers to put distributed resources in the right place so that you lower overall costs and provide the best value to the grid,” said Matthew Ketschke, vice president of distributed resource integration at Consolidated Edison, during the conference.

Fostering a Competitive Marketplace

Indeed, regulators stress that one of REV’s central missions is to properly align incentives among utilities and providers of solar and other distributed resources. Under the traditional regulatory model, distributed generation competes with the standard practice of supplying power from centralized power plants that are often located far from demand centers. Utilities have little or no incentive to enable new markets or encourage providers of products that create value for their customers, like energy efficiency, rooftop solar panels and demand-response programs, which enable customers to trim their energy usage at peak demand times, and often receive financial incentives for doing so.

Under REV, regulators aim to enable a marketplace that allows distributed energy resources to thrive.  The utilities would provide the “wires” for the system and serve as the essential “intelligent platform.” They would be compensated for integrating diverse resources into the grid, and connecting suppliers of demand management and other innovative services to the public in a competitive marketplace.

“No longer is the role of the utility just to deliver electrons. If they embrace this, then a solar provider is no longer a third party – it is a customer of the utility,” said Scott Weiner, deputy for markets and innovation at the New York Public Service Commission, during a panel discussion.

Moving Beyond Net-Metering

Last December, the New York Public Service Commission issued a proceeding in which it requested proposals for a more precise way to value distributed energy resources, which regulators consider to be “a cornerstone REV issue.”

As part of this effort, they hope to develop an “interim successor” to the practice known as net-metering by year-end. Net-metering enables owners of solar panels to sell their excess energy back to the grid and be compensated for it at the retail electricity rate, in most cases. The practice has been under fire in a number of states, where utilities have complained that as solar proliferates, net-metering increasingly represents an unfair transfer of costs to utilities and non-solar customers.

Last April, six investor-owned utilities and three solar companies filed a proposal with the Public Service Commission that offers an alternative to net metering.

The proposal suggests valuing distributed resources through a formula known as “LMP+D+E.” “LMP” is the locational marginal price of electricity, or what any wholesale generator in that location would earn for an equivalent kilowatt-hour of power. “D” is the value of the specific resource – solar, wind or other forms of renewables — to the distribution system. That can include load reduction, resilience, such as being able to maintain power during a larger grid outage, and avoiding “line losses” – the energy losses that occur when electricity is sent from a centralized power plant over high-voltage transmission wires that can run for hundreds of miles before they reach demand centers. “E” is the external societal value – the social benefits, like avoided pollution, that are not captured by current energy markets.

During the conference, utility representatives noted that finding a way to properly value “D” – a distributed resource’s contribution to the distribution system– is particularly tricky, and could change over time. “That’s the one we’re all struggling over: How much value can you place on a particular solar or wind installation?” said Ketschke of Con Edison. For example, a distributed generation facility could have a high value because it is located near a manufacturing plant. But if the plant closes, the value would drop, he said.

In a heavy-demand area of Brooklyn and Queens, Con Edison has launched a $200 million REV demonstration project that could yield some answers to these questions around value. The utility is hoping to forgo a $1.2 billion investment in a traditional substation to supply 52 MW of power, and instead deliver the energy through innovative efficiency measures. Aside from a dramatic reduction in costs, the project would avoid harmful emissions and lower demand on the grid. Elsewhere, the utility is also looking to site 4 megawatt-hours of solar, coupled with battery storage, on around 300 residential homes, and aggregate the power like a virtual power plant. Con Edison would be able to deploy excess power not being used by those homes for grid services. It will also be able to capture data about how best to dispatch power during an outage and provide resiliency benefits for customers, said Ketschke.

These efforts are among several demonstration projects that regulators have directed the state’s six investor-owned utilities to undertake across New York. The hope is that through innovation, the projects will create new business models that enable utilities and third-party providers to derive new revenue streams through collaborative approaches, and drive down costs for consumers.

Large-Scale Building Retrofits Seen as Key to Meeting New York Climate Targets

As New York State forges policies to achieve its ambitious clean energy and climate goals, its buildings could be in line for a major efficiency upgrade.

Gov. Andrew Cuomo has pledged to reduce greenhouse-gas emissions 40 percent below 1990 levels by 2030, and 80 percent by 2050 — in line with the “Under 2 MOU,” an international agreement among subnational governments that have vowed to meet strict climate targets. Considering that buildings comprise 40 percent of carbon emissions throughout the state, and nearly three-quarters in New York City, policymakers say that finding a way to minimize their reliance on polluting fuels will be a critical step in the transition to a low-carbon future.

The challenge is a daunting one. New York City alone has one million buildings, and the lion’s share of greenhouse-gas emissions are generated by onsite combustion of natural gas and fuel oil to provide heat and hot water, said John Lee, deputy director for green buildings and energy efficiency in the New York City Mayor’s Office of Long-Term Planning and Sustainability, during a conference earlier this week. A large portion of those buildings use steam heat, whose systems date back to the Victorian era. Many function inefficiently, underheating some apartment units and overheating others, leading residents to open their windows in the dead of winter for relief.

The result is a tremendous amount of waste. A report last year by the Energy Efficiency for All Project, a collaboration between the Natural Resources Defense Council, the National Trust and other organizations, found that in the city’s multifamily housing, which comprises the largest building sector, upgrading steam systems throughout the city would save $147 million in fuel and maintenance annually and lower carbon emissions by nearly 312,000 tons.

“If we could optimize every steam heat [system] in the city, we’d get a four-percent reduction in greenhouse-gas emissions citywide,” said Lee.

A long-term goal, he said, is to stop bringing fossil fuels into buildings altogether, and transition to solar and other renewable sources. Making New York a renewable-energy leader is central to Gov. Cuomo’s energy strategy, known as Reforming the Energy Vision, or REV, which is working to transform the regulatory process so that utilities will be incentivized to promote energy efficiency, and incorporate larger quantities of clean, distributed energy located on or near the source they are powering. That scenario would represent a dramatic break from the traditional business model, in which utilities reap financial gains by building costly, centralized power plants and expensive transmission lines located far from demand centers.  Gov. Cuomo has set a goal of deriving half the state’s energy from renewable sources by 2030.

Given the widespread inefficiency of existing buildings, the first step toward a greener housing stock is to shrink overall energy consumption, said Lee during the conference, which was organized by the North American Passive House Network. Gov. Cuomo has pledged to cut energy consumption in buildings nearly one quarter below 2012 levels by 2030. The superefficient “passive house” technique involves air-tight construction and heavy insulation, and can slash a building’s energy use by more than 70 percent, compared with conventional construction. The practice has been employed for years in Europe, but has been much slower to catch on here – though it has grabbed the attention of policymakers in New York and elsewhere who are looking for transformative strategies to bring their ambitious climate goals within reach.

In his climate action plan, New York City Mayor Bill DeBlasio calls for the use of “leading edge performance standards,” such as passive house, to dramatically reduce energy use in all new construction. The plan estimates that carbon emissions from buildings will need to fall by 60 percent to meet New York’s 2050 climate target.

Lee said that starting next year, New York will require all new buildings to use a minimum of 50 percent less energy than conventional buildings, and that officials expect to see big efficiency gains in the commercial space. But given that the majority of today’s buildings will still be standing in 30 years, the biggest challenge involves finding an affordable, technically and logistically feasible pathway for performing deep energy retrofits on a massive scale, he said.

“The bulk of this problem is existing buildings,” said Lee. “How are we going to get to all of them?”

Opportunities in the Affordable Housing Market

The Cuomo administration has devoted considerable attention to the issue, and is thinking big: in the next few years, it hopes to create a large-scale, private-sector driven, self-sustaining market for deep energy retrofits in the multifamily sector, starting with affordable housing. The initiative, which is subject to approval by the New York State Department of Public Service, seeks to engage the building and finance sectors in a process that will overhaul large numbers of housing units at once, rather than taking an incremental approach.

New York has 1.7 million affordable housing units, and “all of them need to come into a new [more energy efficient] state by 2050 to meet our climate goals,” said Greg Hale, senior advisor to the chairman of energy and finance in Gov. Cuomo’s office, during the conference. Officials calculate that if New York retrofitted half of those units, the sheer size of the effort would generate an annual retrofit market of at least $1.2 billion, whose costs could be financed through the energy savings over time. Aside from the climate benefits, there would be significant economic gains: jobs would proliferate in the building sector, and tenants would enjoy lower energy costs, healthier indoor air quality and improved comfort.

The initiative would entail a competitive design process, modeled after a successful Dutch initiative, which significantly reduced the costs of deep energy retrofits by aggregating demand in the sizeable affordable-housing market there. The program offered secured long-term contracts, and brought together builders and housing associations, challenging them to design net zero-energy retrofits, without subsidies, in more than 100,000 housing units.

The result was a process that was quick, affordable and replicable. The retrofits involved wrapping houses in insulated panels around the existing shell of a building, topping them with pre-fabricated insulated roofs with high-efficiency solar panels, and installing heat pumps, hot water storage tanks and ventilation units outside. The upgrades were completed within 10 days, financed through the energy cost savings, and came with a 30-year warranty. Such a rapid, whole-house solution represents a sharp break from today’s typical, incremental approach to improving efficiency in multifamily buildings here, like switching out an old boiler or other appliance for a more efficient one. It is attractive to officials looking to create large-scale retrofits without causing major disruptions to tenants or requiring their relocation for long periods of time.

In the Netherlands, the upfront capital for the retrofits is supplied by the WSW social bank, which has provided €6bn to underwrite government-backed 40-year loans to housing associations. Tenants are charged the same amount they had previously paid for rent and energy bills together, until the debt is repaid, according to The Guardian.

Since the project started in 2010, the cost of retrofitting buildings in the Netherlands to a net zero-energy standard – meaning they can produce as much energy as they consume – has dropped by 40 percent.

Officials here believe the successful Dutch experience can be reproduced on this side of the Atlantic.

Gov. Cuomo announced the design-build competition in his 2016 State of the State policy book, “Built to Lead.” The goal is to retrofit 100,000 affordable housing units by 2025, by fostering the right policies and incentives needed to spur a supply chain, overcoming regulatory barriers, and creating financial tools that will encourage investment over a 20-year horizon, financed by the energy savings. The effort will be jumpstarted with a $75 million investment from the state’s Clean Energy Fund over the next three years to help offset the costs of efficiency upgrades.

“To go to scale, we need to create the right environment,” said Loic Chappoz of the New York State Energy Research and Development Authority, during the conference.

Through grants and a competitive design process, the hope is to spur the private sector to provide deep energy retrofits for a variety of multifamily building designs that slash energy use by approximately 70 percent. Officials hope to have the first round of solicitations out this year, and for the first pilot to be built next year, said Chappoz.

CSG/ERC Seminar at Penn Addresses Carbon Policies, Sustainable Water Infrastructure and Renewables

On May 6, CSG/ERC brought together legislators from around the Northeast and eastern Canada to discuss policies to reduce carbon emissions, expand access to renewable energy and electric vehicles and promote sustainable practices for managing urban water resources.

The meeting was hosted by the Kleinman Center for Energy Policy at the University of Pennsylvania, and allowed participants to share strategies for addressing a range of common policy goals, and discuss opportunities for collaborative approaches.

Mark Alan Hughes, faculty director of the Kleinman Center, provided an overview of the international climate accord completed in Paris last December, which was signed by the U.S. and nearly 180 countries last month. The accord marks the first time the global community has consented to a target for cutting planet-warming emissions. The historic agreement seeks to limit the rise in Earth’s temperature to 2 degrees C (3.6 degrees F) above pre-industrial levels. In reality, though, most scientists agree that the targeted cuts are not sizeable enough to prevent temperatures from exceeding that threshold, which creates greater urgency for the international community to accelerate their efforts to keep warming in check.

Hughes, the former sustainability director for the city of Philadelphia, discussed the collective action problem that economists often cite in relation to carbon policies: Almost all of the benefits of climate reductions tend to flow those residing outside of the location where those cuts were made. On a global scale, he noted, more than half of the pledges contained in the Paris agreement require actions among state and local governments to limit carbon emissions. He advised that officials in those “subnational” bodies focus on local strategies that will assist their economies the most, because often, they will produce the biggest net benefits for local populations, and the environment.

For example, policies driven by indigenous goals, like limiting harmful pollution to reduce respiratory-related illnesses and enhance human health, will likely lead to deeper emissions cuts than policies focused solely on climate benefits. Efforts to enhance building codes to encourage greater energy efficiency, or programs encouraging electricity system resiliency, like microgrids, are designed to yield immediate, tangible benefits, and tend to encourage greater enthusiasm, and compliance, Hughes said.

In recent years, 16 states — including nine in the Northeast — and 35 cities have resolved to lower their greenhouse gas emissions 80% from a 2005 (or lower) baseline by 2050. Hughes noted that despite these shared goals, it is probably not efficient to require that every state and urban center meet the same global target, given that local conditions will dictate the most effective strategies for making emissions cuts.

At the federal level, the Obama administration has devised policies intended to help meet a goal announced last year of cutting national emissions 26-28% below 2005 levels by 2025. The U.S. Environmental Protection Agency’s Clean Power Plan, which calls for a 32% reduction in carbon emissions from the nation’s power plants by 2030, is intended to help achieve that target. The rule was finalized last year, but in February, it was stayed by the Supreme Court pending judicial review. Other policies include increased vehicle fuel efficiency for cars and trucks, which will rise to 54.5 miles per gallon in 2025 under rules issued in 2012. It is generally understood that even if the Clean Power Plan is upheld by the Court, additional federal, state and local policies will be needed to meet the nation’s reduction goals.

During the meeting, participants discussed legislation that has been introduced at the state level, including revenue-neutral carbon pricing bills in Massachusetts and Rhode Island. The bills would levy a fee on fuels that emit carbon dioxide, and rebate 100% of the proceeds equally to all households. Both states participate in the nine-state Regional Greenhouse Gas Initiative (RGGI), which caps emissions from power plants that generate 25 megawatts or more of electricity.

Massachusetts State Senator Michael Barrett, who sponsored one of the proposals, S. 1747, noted that 80 percent of carbon emissions in the state come from cars and trucks, which are not covered by RGGI. His bill is intended to help Massachusetts meet the targets contained in the 2008 Global Warming Solutions Act, which calls for reducing economy-wide carbon emissions 25% below 1990 levels by 2020, and 80% by 2050.

Click here to view a presentation on the “Economic Impacts of Carbon Fees at the State and Local Level” from Scott Nystrom, Senior Economic Associate, REMI, Inc.)

Treating Water as a Sustainable Commodity

Participants also heard from former Philadelphia Water Commissioner Howard Neukrug, who addressed what he considers to be the biggest environmental problem in the U.S. today: the overflow of rainwater from impervious surfaces into our sewers.

“The challenge is that the world takes rainwater and doesn’t make it into a commodity—it has no value – and treats it as wastewater,” said Neukrug, who is currently a senior fellow at the US Water Alliance and a fellow at the Penn Institute for Urban Research.

As landscapes become increasingly urbanized, they are characterized by the steady replacement of pervious surfaces with impervious ones – e.g., asphalt roads cover former forests and farmland – leading to increased stormwater runoff and combined sewer overflows. Rainfall that once filtered through the soil gets funneled along manmade surfaces into underground sewers and dumped into waterways used for recreation and drinking water, picking up pollutants along the way.

The bottom line, said Neukrug, is that investing in a landscape-based approach to stormwater management, through the use of green infrastructure, offers a more cost-effective, environmentally friendly, and sustainable method for managing water resources compared with conventional “gray infrastructure” practices that favor expensive investments in tunnels and sewers. Tools include stormwater planters, green roofs and rain gardens that soak up some of the runoff and filter pollutants before the remaining stormwater flows into sewers.

Neukrug explained how the internationally acclaimed Green City, Clean Waters Plan that he developed for Philadelphia is helping the city comply with the Clean Water Act, and saving more than $5 billion that would have been spent on building pipes, tunnels and storage basins. The program is eventually expected to reduce the stormwater pollution flowing into local waterways by 85%.

“We’re looking at this as a major positive change for how Philadelphia is managing its water resources for several centuries to come,” he said.

During a roundtable discussion, participants also discussed efforts to broaden access to renewable energy in their states, through legislation to raise New Hampshire’s net-metering cap, a proposal to make solar power in Maryland cost-effective for low-income communities, and a recent agreement between investor-owned utilities in New York and solar companies to revise net metering for solar installations. Net metering is the compensation system that credits owners of solar installations for the excess power that they generate and sell to the grid. They also heard about Québec’s aggressive policies to promote an infrastructure for electric vehicles and to decarbonize the economy.

For more information, please contact rcohen@csg.org.