Strategies Include a Long-Term Public Commitment to Attract Investment to New York and Spur Development of Clean, Stable Power
June 01, 2015
The New York State Energy Research and Development Authority (NYSERDA) today 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 that continue 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 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 Governor Cuomo’s Reforming the Energy Vision (REV) plan to build a cleaner, more resilient and affordable energy system for all New Yorkers.
Large scale renewables can deliver numerous benefits to residents and businesses alike. Immediate benefits can include economic development and jobs for communities across the state, greater stability in customer bills, cleaner air, and reduced carbon emissions.
"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.
These measures will achieve core policy objectives of minimizing costs while maximizing benefits of large-scale renewables, promoting competition, and increasing the voluntary market. Furthermore, alongside expected Clean Energy Fund (CEF) budget levels, the proposed large-scale renewables funding commitment would enable near-term reductions in total annual collections and significant decreases over time.
A critical focus of the REV strategy is to build a smarter energy grid that integrates a diverse array of energy resources into a strong central backbone. The benefits of large-scale renewables can be further enhanced when complemented by flexible assets such as demand response and energy storage, as envisioned under REV.
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, 2015. Interested parties may view the filing on the DPS website.
About Reforming the Energy Vision
Under Governor Cuomo’s Reforming the Energy Vision (REV), New York State is spurring clean energy innovation and attracting new investment to build a cleaner, more resilient and affordable energy system for all New Yorkers. REV encompasses groundbreaking regulatory reform to integrate clean energy into the core of our power grid, redesigned programs and strategies to unlock private capital, and active leadership in deploying innovative energy solutions across the State’s own public facilities and operations. REV will enable a dynamic, clean energy economy operating at a scale that will stimulate opportunities for communities across the state to create jobs and drive local economic growth, while protecting our environment by reducing greenhouse gas emissions and other pollutants.
Successful initiatives already launched as part of REV include NY Sun, NY Green Bank, NY Prize, K-Solar, and a commitment to improve energy affordability for low-income communities.
To learn more about REV, please visit www.ny.gov/REV4NY