By Marguerite Wells, ACE NY Executive Director
New York is at an inflection point. Seven years ago, New York chose to transition away from fossil fuels as a way to fight the ever-increasing threat of climate change and the economic damage it was doing to our residents and our communities. To some, it seemed like a luxury; a goal we could reach when convenient.
Now, New York faces an even more impending and immediate threat: the twin issues of out-of-control electricity costs driven by volatility in the natural gas market and the expected explosion of demand on our system.
Since this transition began, we've seen how hard it has been to site and build renewable energy projects, and it has only gotten harder with open hostility from the federal government.
But leaders like Gov. Hochul have not turned their back on this energy transition, consistently touting the energy grid she envisions with a nuclear backbone and a diverse array of wind, solar, and energy storage projects. Why? Not because a piece of paper in 2019 said to. Built into the law were common-sense off-ramps in case of unprecedented situations. She and other leaders are staying the course because it really is the only way forward. We at ACE NY believe this and have now quantified it through independent research.
In the new report, “New York Competitive Land-Based Renewables: Customer Value, Market Design, and the Cost of Inaction,” prepared by Power Advisory, it confirms that we are on the right track and lays out specific policies that will enable progress while putting ratepayers first.
The report looks at the harsh realities the industry has faced from supply chain shocks, inflation, changes in federal tax rules, and higher interest rates, and yet clean energy remains the most cost-effective way forward. It acknowledges that the costs of wind and solar projects have gone up, but this industry is not unique. In the report, it says the cost of new-build natural gas has risen from $75/MWh to $129/MWh since 2018, with delays of five years or more on new turbines. This doesn’t even take into account the price surges of fuel for these plants that caused our electric bills to skyrocket last winter, further worsening our affordability crisis.
The report looks at other policy proposals such as -owned utility generation, which can sound good in a one-sentence pitch, but the argument falls apart quickly when you look at the implementation and recognize that any cost overruns for the projects built by utilities would fall onto ratepayers instead of private companies.
The report also looks at NYSERDA’s procurement mechanisms for renewable projects, recommending continuing the system, with minor tweaks.
We will need up-front investments in our electric system, in the form of new transmission lines like those competitively procured through a Public Policy Transmission Need (PPTN). These are investments that are needed regardless of how fast new energy generation is deployed, and delaying transmission investments will only hurt customers down the line, and cost more.
There are some concrete facts in the debate around renewables. New York needs more power, now. Renewables are the most cost-effective and quickest-to-build forms of new energy. Our most vulnerable communities are continuing to suffer from the air and water quality impacts of fossil fuel generation. We are seeing this across our country and across the world.
Yes, it’s hard to build in New York. Yes, we are not where we want to be. But we believe, and have now proven in this report, that the path we are on is the right one. It puts ratepayers first and will pay dividends for generations to come.
