New York authority proposes $1.5bn in new investment in renewables

The New York State Energy Research and Development Authority (NYSERDA) on June 1 announced submission of its proposal for new and improved strategies to support large scale renewables such as solar, wind, and other clean technologies.

These strategies would build upon New York’s clean power legacy, which began in the 1950s with major public investments in hydroelectric dams thatcontinue to provide low-cost, zero-emissions electricity for New Yorkers to this day. As part of the submission, NYSERDA proposes a long-term commitment to the next generation of large-scale renewables through a $1.5 billion public investment over ten years, which is comparable to the level of investment made over the past decade through the existing Renewable Portfolio Standard (RPS).

Each year, New Yorkers collectively spend tens of billions of dollars on electricity. This investment in large scale renewables made over time would represent a small fraction of total electricity costs and is structured to lead to net customer savings similar to those New York’s clean, affordable hydropower provides today, the authority said.

The new strategies and commitment will enable New York to make meaningful progress towards the State’s clean energy goals at the lowest possible cost, while setting large scale renewables on a path to a subsidy-free market and providing opportunities for customers to more easily procure clean power on their own. The proposal responds to local industry and market feedback and advances innovative approaches built off of best practices from around the country and aligns with Gov. Andrew Cuomo’s Reforming the Energy Vision (REV) plan to build a cleaner, more resilient and affordable energy system for the state.

“A strong and healthy New York economy requires a clean, modern and reliable power grid,” said Richard Kauffman, Chairman of Energy and Finance for New York. “NYSERDA’s proposed strategies usher in a new era of New York’s support of large scale renewables and will help build an integrated energy system able to meet our evolving economic and environmental needs.”

Since 2004, NYSERDA’s current RPS program has enabled developers to build nearly 1,900 MW of renewable generation capacity and has proven to deliver benefits far exceeding the costs. While this program has made meaningful progress, responding to changing market conditions and capturing opportunities for improvement through new strategies can result in greater impact at a lower cost.

“Large scale renewables continue to play a critical role in advancing New York’s clean energy goals and its economy,” stated John B. Rhodes, President and CEO, NYSERDA. “While building upon the success achieved to date, the State is developing strategies to engage greater private sector involvement to continue the growth of renewable energy that will protect the environment and stimulate economic development.”

Over the course of its analysis, NYSERDA examined a range of policies, frameworks, and financing structures to support large scale renewables. Based on the analysis of these options, NYSERDA recommends the following program design principles for consideration through public comment:

  • Bundled Power Purchase Agreements (PPAs) to reduce costs and electricity price volatility;
  • Flexible procurements to increase competition and ensure the selection of the lowest-cost projects;
  • Centralized project solicitation/evaluation by a third-party;
  • Procurements based on planned budgets, system needs, and other considerations;
  • New mechanisms to facilitate voluntary market activity;
  • Securitization to lower the cost of project debt; and
  • Long-term budget commitment to stimulate greater investment in New York and put large-scale renewables on a path to grid-parity, while enabling significant reductions in overall collections.

The New York State Department of Public Service (DPS) will convene a technical meeting to discuss the strategies and options presented by NYSERDA. Written comments will also be accepted, with initial public comments due July 22.

Since its inception in 2004, New York’s Renewable Portfolio Standard (RPS) has been a driver of clean energy investment and highly cost effective for New York ratepayers, the Sierra Club said in a June 2 statement lauding the NYSERDA proposal. New York’s large scale renewable energy projects will contribute a total of $2.7 billion in direct economic investments statewide, have added about 670 jobs annually to New York’s workforce, and will reduce harmful carbon dioxide emissions by 50 million tons over the life of the projects.

A June 2 joint statement from the Sierra Club, Alliance for Clean Energy New York, Environmental Advocates of New York, Natural Resources Defense Council and Pace Energy and Climate Center: “New York’s current Renewable Energy Standard expires at the end of 2015. We applaud NYSERDA’s proposal to extend and enhance the State’s support for large scale renewable energy with a 10 year, $1.5 billion commitment that is designed to ensure the certainty, longevity, and scale necessary to attract continued private sector investment in these valuable renewable resources.”

With this proposal, coupled with a strong renewables target such as 50% by 2025, Gov. Cuomo can cement New York’s status as a national leader on clean energy and climate policy, the environmental groups added.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.