September 1, 2020
According to a recent article from Politico, reporting on analysis from Brattle, the status quo means of ensuring there is always enough electricity to keep the lights on could cost consumers an additional $400 to $900 million annually in 2030, compared to choosing a new approach.
This review of resource adequacy options is part of Governor Cuomo’s aim to find the least costly method of achieving New York’s ambitious renewable energy goals. As mandated by the Climate Leadership and Community Protection Act (CLCPA), the state’s goal is 70% renewable energy by 2030.
The application of ‘buyer side mitigation’ in the NYISO capacity market is seen by policymakers and environmental groups as a threat to achieving New York’s renewable energy goals—and the Trump administration could negatively impact New York’s clean energy efforts if the Federal Energy Regulatory Commission (FERC) were to deliver an order to NYISO regarding the application of an offer floor to all state-supported renewable resources.
According to Brattle, as reported by Politico, the expansion of the ‘buyer side mitigation’ policy through an order from the FERC could see consumer costs rising by somewhere between $1.3 billion and $2.8 billion per year, in comparison to a scenario where no mitigation is applied.
In a hypothetical scenario, evaluated by Brattle on request of the Department of Public Service, where the state takes authority over resource adequacy, mitigation costs would rise where nuclear plants retire or electricity load growth is higher.
For consumers, approaches including buyer side mitigation would lead to increased costs, as ratepayer subsidies for new renewables would have to rise in order to achieve the CLCPA goals. This is compared to a scenario in which those projects could access revenue from capacity markets. A spokesperson for Brattle suggested that carbon pricing, if high enough, could reduce the costs of mitigation.
In Brattle’s status quo analysis, mitigated renewable resources total roughly 3,000 MW (mostly storage), as well as imported Canadian hydropower, and some offshore wind. More gas turbines are kept online as a result of those resources being excluded from the capacity market.
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