The New York State Public Service Commission announced on July 2 important changes to New York’s Main Tier Renewable Portfolio Standard (RPS) program to help increase the number of large-scale renewable energy projects, such as wind farms, being built in New York.
The changes offer increased revenue certainty and a revised Main Tier solicitation design extending into 2015 which provide the support developers need to help create a more robust renewable energy market in New York State, the commission said.
“Supporting large-scale renewable energy projects highlights New York’s strong commitment to growing the clean energy economy,” said Commission Chair Audrey Zibelman. “With these changes, New York will be able to attract greater private sector investment and create new economic opportunities.”
The commission issued an order on July 2 authorizing the New York State Energy Research and Development Authority (NYSERDA) to award contracts for large-scale renewable energy projects, known as the Main Tier, of up to 20 years in length, doubling the current contract length for future solicitations. Further, the PSC directed NYSERDA to issue one Main Tier solicitation this year, and at least one additional solicitation in 2015.
Providing developers of large renewables projects with longer-term contracts provides greater certainty of future revenues and reduces the risks related to financing the project, the commission noted. Developers have consistently stated a preference for stable, longer-term contracts to hedge risk.
“Today’s action by the Public Service Commission underscores New York’s ongoing commitment to increasing the deployment of large-scale renewable energy that will provide environmental and economic benefits to communities across the state,” said John Rhodes, President and CEO of NYSERDA. “As the State, under Governor [Andrew] Cuomo’s direction, seeks solutions that spur demand and enable scale in the clean energy sector, it is sending a signal to the market that New York’s investment in renewable energy is long-term in thinking and innovative in action.”
The changes made in the renewable energy program complement two important proceedings now underway, initiated by the commission and New York State: Reforming the Energy Vision (REV) and the Clean Energy Fund. The new initiatives will examine the role of utilities and the establishment of markets in procuring and deploying clean energy resources. REV and the Clean Energy Fund will determine the future of the RPS program beyond 2015, including consideration of the use of alternative incentive mechanisms.
The bulk of the energy needed to reach the current 2015 RPS program target (approximately 10 million MWh) is obtained through competitive solicitations in the Main Tier of the RPS program. To date, NYSERDA has conducted eight Main Tier solicitations resulting in contracts for the annual production of approximately 4.6 million MWh of renewable energy.
While the Customer-Sited Tier, a subset of the RPS program which focuses on smaller projects, including those used by residential and small business customers, has undergone modifications to its incentive structure and budgets, updates to the Main Tier have not kept pace with evolving energy market conditions. The changes made by the PSC on July 2 bring the RPS Main Tier into closer alignment with the current market.