New York likely to miss 70 percent renewable target

NEW YORK — New York will likely fail to meet one of its major renewable electricity targets, state officials acknowledged in a report Monday .

The state will miss its statutory target of 70 percent renewable electricity at the beginning of the next decade by three years, as Gov. Kathy Hochul’s administration considers shifting the goalpost to 2033 instead.

The forecasted three year delay is partly driven by higher electricity demand spurred by large manufacturing projects and the decimation of New York’s renewable plans after developers backed out of contracts amid record inflation and rising costs.

“It will be a challenge to achieve the 2030 goal as things currently lay,” said Rory Christian, chair of the Public Service Commission and CEO of the Department of Public Service, in an interview with POLITICO. “We've been hit with a number of supply chain disruptions, a variety of geopolitical developments.”

The review released Monday blames the delay largely on factors outside of the state’s control, particularly economic conditions that led to the cancellation of most of the renewable projects policymakers relied on to achieve the goal.

“What we are proposing here is literally an assessment of the interventions and adjustments and essentially actions that we can take to maximize our progress toward this goal,” said Doreen Harris, president and CEO of NYSERDA. “Clearly the world has shifted significantly since 2019 in directions that produce, I'd say, both headwinds and tailwinds in this program.”

The pending delay underscores global challenges to meet climate targets amid rising costs and concerns about affordability.

Elsewhere in the country, Colorado officials have acknowledged they’re unlikely to hit a 2025 goal. And globally, governments are not expected to achieve commitments to slash greenhouse gas emissions at a rate aimed at keeping expected warming below 1.5 degrees Celsius. Scotland, for instance, abandoned its 2030 emissions reduction targets.

New York’s 70 percent renewable mandate — which would ensure the state relies far less on fossil fuel power plants for electricity in the coming decade — is a key tenet of its nation-leading climate law, approved by the Democratic Legislature and then-Gov. Andrew Cuomo in 2019. Much of the law’s other emissions reduction goals rest on a cleaner electric grid, calling the likelihood of meeting those already tenuous targets further into question.

The review released Monday of the state’s progress, required under the climate law, paints a stark picture of the challenges facing policymakers in achieving the legislative mandate. It includes recommendations by the Department of Public Service and NYSERDA, which will be considered by the Public Service Commission. It will be available for public comment for 60 days before it is finalized and the Public Service Commission considers actions.

“We want to understand whatever recommendations [stakeholders] have for helping us achieve these goals, on target, on time and in an affordable way as possible,” Christian said.

Hochul nominated three women to the seven-member commission this year, reshaping the utility regulator as it faces an enormous challenge in implementing the state’s climate law.

The report raises some potentially controversial options to address the gap, including modifying the statutory target, allowing utilities to build new renewables and increased transmission planning with designated areas for renewable generation.

New York policymakers have tried to achieve the 70 percent goal by relying on a centralized procurement model where NYSERDA contracts with renewable developers through a competitive process. The payments are ultimately collected from New York electric customers.

The process has had some success, as dozens of projects including the South Fork offshore wind initiative are now operational and providing clean electricity to the grid. The report says 20 percent of the 56 large-scale renewables under contract are now operational.

But the majority of contracts were canceled by developers after the Public Service Commission, supported by Hochul, rejected a request for bigger subsidies in October. The developers said they could not continue investing in projects at prices set before the Covid-19 pandemic and Russia’s invasion of Ukraine led to increased interest rates and higher costs for energy-related equipment.

Supporters of the developers’ request warned that delays of these projects would endanger achievement of the state’s renewable goals and make them more costly to achieve.

The commission unanimously rebuffed the request, citing the principles of competitive procurement and concerns about the high costs that developers wanted to pass on to consumers. Christian said it was developers who reneged on their agreements.

Affordability in achieving the state’s climate goals has been a major concern for Hochul, who even proposed weakening the climate law to lower costs. She’s also cited fiscal concerns in pausing a program to charge cars driving into a congested part of Manhattan to raise money for the region’s mass transit system.

Cost is something the PSC has to consider, Christian said when asked how that impacts the timeline for achieving the 70 percent target.

“It's safe to say, with any problem, if unlimited funds are available, money is a viable path towards solving it,” Christian said. “We at the commission, in looking at actions that must be taken, have to balance a variety of considerations, and affordability is one among them.”

The report says the goal of 70 percent renewable was always an ambitious one. Increased load growth — which the report says is a positive sign — makes the denominator larger and the target more challenging.

If electricity demand doesn’t increase as much as policymakers expect, 70 percent renewables could be achieved much sooner. If it increases even more than forecast, it would be pushed out even farther.

New York is seeing several large loads seeking to hook up to the electric grid in upstate New York and economic growth statewide. That includes green hydrogen production, cryptocurrency mining and large manufacturing projects like Micron.

These projects are also putting pressure on the reliability of New York’s grid.

Fossil fuel projects have been retiring faster than new renewables have come online in New York. The state’s independent grid operator has warned that under high demand scenarios there may not be enough electricity available to meet peak electricity needs within the next decade.

The report recommends that the PSC increase the amount of large onshore wind and solar procured by NYSERDA every year, extend those processes to 2029 and give NYSERDA flexibility to procure more than 9 gigawatts of offshore wind to cost-effectively achieve the goal. It also backs increasing the distributed solar target to 10 gigawatts by 2030.

The climate law targets 6 GW of solar by 2025. That is perhaps the only electric sector goal the state is on track to meet. Other 2025 goals for energy efficiency and energy storage are not expected to be reached.

Offshore wind will be a key piece of achieving the delayed 2033 target, which relies on 6 GW of the technology connecting to New York’s grid by that year. The state currently has one project contracted by the Long Island Power Authority online and two others in progress. NYSERDA plans to issue another request for offshore wind projects later this summer.

“The deployment of offshore wind is clearly a game changer when it comes to meeting load growth,” Harris said. “These projects are projects that are unlikely to be 2030 projects at this point.”

The report also puts forward some other options, including modifying the 70 percent target, which the PSC is empowered to do under the climate law.

The report revives an idea that has occasionally been kicked around to designate particular areas for renewable generation and coordinate planning of transmission to unlock those areas.

It’s reminiscent of what Texas did to spur the construction of thousands of megawatts of new renewables. But it’s largely been considered a non-starter in New York due to local opposition to transmission projects and renewables.

It also proposes utility involvement in renewable generation.

Utilities have long fought to be allowed to invest in renewable generation through their regulated businesses, arguing they can do so at lower borrowing costs than independent companies. Costs would be borne by ratepayers. Owners of power plants and renewable developers have opposed that push, but some lawmakers have argued it needs to be considered to meet the state’s targets.

“An all hands on deck approach is something always worth exploring,” Christian said. “It's something being recommended in the report, so we will review it and determine if it makes sense.”