New York throws $5 billion at clean energy, includes nukes in RPS proceeding

22. January 2016 | Financial & Legal Affairs, Markets & Trends, Top News | By:  Christian Roselund

Buried in an announcement of aggressive funding for clean energy, New York regulators have said that they will include nuclear power in the state’s new renewable energy mandate.

New York's 50% by 2030 renewable energy mandate would be one of the most aggressive in the nation, but the details are still being worked out.

The Administration of New York Governor Andrew Cuomo has made a number of very aggressive moves towards renewable energy, including announcing one of the nation’s most ambitious renewable energy mandates, indefinitely extending net metering, supporting SolarCity and 1366 Technologies in locating manufacturing in the state, and embarking on a bold program to restructure the distribution grid.

Yesterday the administration continued on that path by announcing $5 billion in new funding over the next 10 years through the new Clean Energy Fund, including $2.7 billion for “market development" and nearly $1 billion for the NY-Sun program.

However, buried in the press statement was also wording which indicates that the state’s new 50% by 2030 renewable portfolio standard will be transformed into a “Clean Energy Standard” (CES), and will include support for nuclear energy.

This is not the first mention of nuclear energy in relation to the 50% by 2030 goal. Previous statements by the Cuomo Administration had indicated that there would be a separate support mechanism for upstate nuclear power plants. However, the language in a ruling by the New York Public Service Commission (NYPSC) referenced in the press statement takes this a step further.

“By this order, we are expanding the scope of this proceeding to include consideration of a CES and maintenance of non-emitting generation,” reads the January 21 ruling.

While a press agent for the NYPSC stated that generation from existing nuclear facilities is unlikely to be counted in the percentage of renewable energy required by 2030 - which would substantially weaken the ambition of the program - the details are far from clear.

As was the case in previous statements, the press statement repeatedly refers to existing "upstate" nuclear power plants. This designation appears to specifically exclude the Indian Point plant near New York City. There is also no mention of new projects, which would be hard pressed to be completed by 2030 given the very long timelines for nuclear power projects.

“Specifically, some nuclear facilities in the State have indicated an intent to retire, stating, among other things, an inadequacy in the wholesale electric market for valuing zero emission electric energy resources,” notes the ruling. “In assessing a CES, careful thought needs to be given regarding the need to preserve the emission gains made by the State.”

“Unexpected retirement of these units due to economic conditions or other factors beyond the State’s direct control could possibly lead to an increase of over 12 million metric tons in carbon dioxide emissions alone, a truly unacceptable outcome.”

Exelon which is the nation's largest operator of nuclear power plants including two in upstate New York, applauded the move.

More information is expected in a white paper to be issued by the PSC on Monday.

Details on the $5 billion in funding are likewise vague. The $2.7 billion in Market Development will be used to both “stimulate consumer demand for clear energy alternatives while helping to build clean energy supply chains”, which presumably would involve very different mechanisms.

The $782 million for the NY Green Bank will bring the bank to $1 billion in funding, “leverage private sector investment, and expand the availability of capital”. Finally, $717 million will be provided for Innovation and Research. 

The Clean Energy Fund will be administered by NYSERDA, and Governor Cuomo says that it expects the fund to leverage more than $29 billion in private sector funding.

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