New York State adopts aggressive renewable energy policy
SYRACUSE, New York, US, 2004-09-29 (Refocus Weekly)
The Public Service Commission of New York State has adopted a renewable energy policy that will require 25% of electricity to come from green power facilities by 2013.
To meet the target, the state must add 3700 MW of capacity from renewables,
which will reduce emissions of nitrogen oxide by 6.8%, sulfur dioxide by 5.9%
and carbon dioxide by 7.7%, with a greater proportion of reductions in New York
City and Long Island.
The Renewable Portfolio Standard will include a main tier for large generation
facilities that use wind, hydro, biomass, biogas, liquid biofuel, ocean or tidal
power facilities, and a customer-sited tier for “behind-the-meter”
technologies that include fuel cells, solar PV and wind. Trash incineration is
excluded from the definition of renewable energy, despite lobbying by
incinerator operators who said they generate clean sustainable energy.
“The development and use of more renewable energy resources has been a
long-standing policy objective of New York State, and Governor Pataki
strengthened that commitment when he proposed the 25% goal in his 2003 State of
the State address,” says PSC chairman William Flynn. “The policy we are
adopting today balances a wide range of interests. Not only will it help us meet
our growing demand for electricity, but it also will provide additional benefits
by increasing fuel diversity for our state's generation portfolio, reducing our
exposure to fossil fuel price spikes and supply interruptions, increasing
economic development activity from a growing renewable energy industry, and
improving our environment.”
“Our decision today is based on a detailed examination of the costs, benefits
and potential impacts on system reliability of implementing an efficient and
forward-thinking renewable energy policy for New York State,” he adds.
The state currently generates 19.3% of its electricity from renewables, mainly
from hydro projects at Niagara Falls and on the St. Lawrence River.
The RPS will facilitate development of eligible renewables by using revenues
derived from a non-bypassable, volumetric charge on the delivery portion of
customers' electric bills. Collection of this charge will begin late next year
and will be based initially on the estimated market price of the renewable
resources needed to meet the 2006 RPS target of 1.3 million MWh. RPS funds
collected by regulated utilities will be transferred to the New York State
Energy Research & Development Authority which will administer an
incentive-based procurement program.
The impact of the RPS on customer costs is expected to be modest, and wholesale
energy prices likely will decline as a result of adding substantial amounts of
renewable resources which offset some of the program costs, the PSC explains.
For residential customers, cumulative bill impacts will range from a reduction
of 0.9% to an increase of 1.68% over the life of the program, while commercial
customers can expect their bills to drop from 0.78% or increase by 1.79%, with
industrial consumers ranging from -1.54% to +2.2%. The cumulative cost of
premium payments for green power projects will range from US$582 to $762
million, but will be offset by $362 million in wholesale energy cost reductions
as New York reduces its reliance on fossil fuels.
A major objective of the RPS is “to sustain a market for renewables without
perpetual dependence upon government-mandated subsidies,” and the PSC
concluded that “an approach incorporating and supporting the growth of
competitive retail markets for renewable resources and customer choice for
renewables has a greater chance of producing a self-sustaining renewable energy
industry that can build upon successes in developing renewable resources through
the RPS program.”
“Ultimately, New York's ability to meet or exceed the ambitious goals we have
laid out today will depend only in part on the design of this Program,” says
Flynn. “Equally critical to our success is the willingness of consumers, our
business community, green energy marketers and renewable technology
manufacturers to support this initiative.”
The PSC says system reliability is of “paramount importance” and directed
that implementation plans should include a process for review and analysis of
potential reliability impacts associated with wind and other intermittent
resources. Although all energy customers in the state will benefit from the RPS,
it agreed to exempt from contribution those customers currently exempt from
System Benefits Charge contributions.
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