About Tier 4
New York’s Commitment to Clean Energy
Climate change presents a real, grave challenge to our planet, and New York State has committed to taking action through comprehensive legislation.
In 2019, the historic Climate Leadership and Community Protection Act (Climate Act) was signed into law, requiring the State to achieve a 100 percent zero-emission electricity system by 2040 and an 85 percent reduction in greenhouse gas emissions below 1990 levels by 2050, setting a new standard for states and the nation to expedite the transition to a clean energy economy. The law mandates that at least 70 percent of New York's electricity come from renewable energy sources by 2030.
Greening New York’s City
New York’s Climate Act goals necessitate the state shed its fossil-fuel dependency. Consuming approximately one-third of the New York State’s annual electric consumption, New York City’s power originates from nearly 90 percent fossil fuels, despite abundant renewable energy statewide. Without displacing a substantial portion of the fossil fuel-fired generation currently operating within New York City, the statewide 70 percent renewable energy by 2030 goal will be difficult to achieve.
As New York State moves forward with bold plans to implement the Climate Act’s Final Scoping Plan, it is critical that sufficient transmission capacity is available to deliver clean energy, especially to New York City.
What is Tier 4?
To tackle this challenge, the New York State Public Service Commission (PSC) approved a new first‐of‐its‐kind program known as Tier 4, aimed at addressing the imbalance of renewable energy access within the State’s grid. This program, administered by the New York State Energy Research and Development Authority (NYSERDA), procures renewable energy attributes in the form of Tier 4 Renewable Energy Certificates (RECs) which are tied to the delivery of renewable generation in New York City. Tier 4 is an innovative approach to supporting the development of transmission infrastructure at the state level while also providing clean energy to the State’s most challenging load center.
Establishing the Tier 4 Program
Tier 4 was established by The Public Service Commission’s October 15, 2020 Order [PDF] in response to NYSERDA’s Clean Energy Standard White Paper [PDF] with a goal to increase the penetration of renewable energy into New York City (NYISO Zone J).
NYSERDA issued a Tier 4 solicitation in January 2021.
After a thorough project evaluation and negotiation process, two contract awards were recommended – the Clean Path NY project (CPNY) and the Champlain Hudson Power Express project (CHPE).
The Public Service Commission approved the contracts by Order of April 14, 2022 [PDF], subject to limited contract clarification and similar requirements as laid out in the Order. These projects will deliver wind, solar, and hydropower to New York City via new high-voltage direct current (HVDC) transmission lines.
NYSERDA does not purchase energy; it procures clean energy’s renewable energy attributes called Renewable Energy Credits (RECs) that are created through the delivery of clean energy on a per-Megawatt hour (MWh) basis.
Under their Tier 4 contract, Clean Path NY and the Champlain Hudson Power Express will deliver renewable energy to New York City (NYISO Zone J) thereby creating Tier 4 RECs that will be purchased by NYSERDA and then made available for sale to a voluntary market.
The Tier 4 Program is required to develop an implementation plan that describes the administration of Tier 4 including compliance calculations, process and structure. The New York Generation Attribute Tracking System (NYGATS), an online certificate-tracking system that records information about electricity generated, imported, and consumed within New York State, generates, and administers the purchase and sale of RECs statewide, including Tier 4.
The Tier 4 program is a complex and entirely new component of New York’s clean energy strategy and therefore requires a thorough analysis of the many new requirements to develop the Tier 4 implementation plan. NYSERDA has established regular, ongoing engagement with internal and external stakeholders on the workstreams necessary to develop the implementation plan.
Energy delivery from the two Tier 4 contracts is expected in 2026 and 2027, allowing ample time for a thoughtful and considered planning process to address the complexities associated with the Tier 4 program without risk to program delivery.
NYSERDA will file the Tier 4 implementation plan for stakeholder comment and Commission approval.
Payments for Renewable Energy Credits will only commence for each respective Tier 4 project after it has obtained all required permits and local approvals, completed construction, and is delivering power to New York City.