New York energy policy is not for the faint of heart.
Already upturning the century-old electricity industry with its Reforming the Energy Vision (REV), and pursuing the most vigorous community microgrid program in the nation, New York is setting another new bar, this one for renewable energy.
Gov. Andrew Cuomo recently directed the Public Service Commission to figure out how the state can make renewables 50 percent of electric supply by 2030.
It remains to be seen exactly what the renewables mandate will mean to New York’s microgrid market. But on two counts a 50 percent requirement appears to be good news for microgrids.
First and most obvious, microgrids often use renewables, so are bound to be part of the mix to achieve the goal. Second, New York will need to increase its energy efficiency efforts to reach the renewables target more easily. And microgrids are in many ways an energy efficiency play – from their ability to avert line loss, to their energy management practices, to their common use of combined heat and power.
First Shrink the Pie
Simple mathematics shows that the larger the renewable goal in the state, the more important energy efficiency becomes. Energy efficiency shrinks the overall pie of megawatts the state needs to keep the lights on. So as the pie shrinks, so does the slice of required renewables.
Dan Sosland, president of the Acadia Center, sees New York as ripe for more energy efficiency. Its power companies “significantly lag” on investing in this “cleanest, cheapest fuel,” he said.
“These companies could quadruple overall expected efficiency investment savings goals from 0.6 percent annually to 2.5 percent annually — to levels comparable to leading states. Increasing the amount of efficiency procured by the state’s public and privately owned utilities would optimize overall demand, saving consumers money, while shaving approximately 25 percent off the amount of additional renewable electricity needed to meet the new target,” Sosland said.
Cuomo’s renewables target seems particularly daring in light of the fact that the state already is a big producer of renewables, yet still came up short on its 30 percent target for 2015.
New York has developed more renewable energy than any other state in the Northeast. (This excludes hydropower, which several states in the region omit from their renewable portfolio standard, or RPS.)
Even so, New York secured only 56 percent of its 10.4 million MWh goal for 2015, according to a performance report released in March by the New York State Energy & Research Development Authority.
New York divides its renewables efforts into two tiers, a main tier for utility-scale projects and a customer-sited tier for smaller, behind-the meter sources. The state reached 53 percent of its 9,519,765 MWh main tier goal and 96 percent of its 878,089 MWh customer-sited tier.
In all, New York now gets about 25 percent of its power from renewables. To get to the next 25 percent, the state will have to up its game in developing utility scale renewables, according to Anne Reynolds, executive director of the Alliance for Clean Energy New York (ACENY). She estimates that the state will achieve the next 25 percent with 10 percent distributed generation and 15 percent large-scale renewables, including on and off-shore wind.
Reynolds says the state also should institute utility renewable energy mandates, as many other Northeastern states have done. Utilities would be held accountable for securing a certain amount of renewables. New York, thus far, has taken a different approach, largely funding renewable projects through state-sponsored purchases of renewable energy credits.
Fitting the Pieces Together
New York isn’t the only state with aggressive renewable goals. California’s Governor Jerry Brown signed the same requirement into a law in October. But New York is tasked with the big job of both meeting a new renewables requirement and integrating this puzzle piece into the still evolving, new frontier of REV. The kind of decentralized electric grid envisioned under REV has not yet been tried elsewhere in North America – really the world. It creates a whole new business model for utilities. So in and of itself, it is no small task.
Acadia, ACENY, the Natural Resources Defense Council, the Solar Energy Industries Association and other pro-renewables groups are praising Cuomo and the state for braving the new renewables goal. They see it as achievable. Next will come the PSC proceeding to work out the details. It won’t easy. But then easy isn’t what New York energy policy is about.
Learn about New York energy policy at the upcoming Microgrid Knowledge conference, “New York and Beyond: Advancing Microgrids Nationally with Lessons Learned in New York.”