New York Proposes US$1.5bn Investment For Renewables Sector

NYSERDA has proposed a long-term commitment to next-generation large scale renewables.
Published: Mon 22 Jun 2015

New York’s Reforming the Energy Vision (REV) is set to transform the state’s energy system with distributed resources and a consumer-centric approach. [Engerati-Distributed Energy Resource Markets Coming To New York] However, central generation will continue to serve as the backbone of New York’s power grid for the foreseeable future.

To this end the New York State Energy Research and Development Authority (NYSERDA) has put forward proposals, including a US$1.5 billion public investment over ten years, to the next generation of large scale renewables. This is comparable to the level of investment made over the past decade through the existing Renewable Portfolio Standard (RPS), which has enabled developers to build nearly 1,900MW of renewable generation capacity since 2004.

“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."

Meeting clean energy goals

According to NYSERDA 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 long-term budgetary commitment should stimulate greater investment in New York and put large-scale renewables on a path to grid-parity, while enabling significant reductions in overall collections.

Other proposals include:

  • Bundled power purchase agreements (PPAs) to reduce costs and electricity price volatility. Such cost reductions could enable 70-120% greater deployment than current policies for the same investment.
  • Flexible procurements to increase competition and ensure the selection of the lowest-cost projects.
  • Centralized project solicitation/evaluation by a third-party, to ensure fair and successful implementation.
  • Procurements based on planned budgets, system needs and other considerations. Consistent with REV principles, strategies to integrate large scale renewables with distributed energy resources, such as storage and demand response, to increase the system and consumer benefits should also be explored.
  • New mechanisms to facilitate voluntary market activity, as the voluntary market currently suffers from insufficient demand volumes, contract durations, and credit supports.
  • Securitization to lower the cost of project debt.
     

Minimizing costs, maximizing benefits

These measures should achieve core policy objectives of minimizing costs while maximizing benefits of large-scale renewables, promoting competition and increasing the voluntary market, according to NYSERDA. 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.

The proposals will now be reviewed by the New York State Department of Public Service (DPS).

Further reading

NYSERDA: Large-Scale Renewable Energy Development in New York: Options and Assessment