New York’s public sustainable energy body the New York State Energy Research and Development Authority (NYSERDA) this week unveiled details of its $5 billion, ten-year plan to hit the state’s greenhouse gas (GHG) emission reduction target.
New York has committed to reducing its GHG emissions by 40% by 2030 and by 80% by 2050.
In a report published on Tuesday, NYSERDA said hitting those ambitious targets would not be possible under current renewable energy policies and has asked for permission to introduce a Clean Energy Fund (CEF) from 2016 onwards.
With a focus on distributed generation and on meeting supply-side GHG reductions through business and technology innovation and demand-side solutions by driving awareness of, demand for and access to clean energy solutions for the public NYSERDA says its plans will cost an additional $3.857 billion on top of current funding commitments but can financed at the same time as a reduction in the amount of money levied on energy consumers.
The public body wants permission to spend the significant cash balances it has accrued from current renewable support policies and whose disbursement has lagged due to the slow development of projects a cash surplus which has drawn criticism from opponents who say energy ratepayers are being squeezed to boost NYSERDA’s coffers.
Rising costs will not mean rising bills
By committing to spend those balances within three years, NYSERDA says it can reduce the limit on how much ratepayers contribute to renewables programs from the current $925 million per year to $700 million in 2016, $650 million in 2019, $625 million in 2020 and $400 million from 2021 to 2025 when the CEF would end, although an additional $400 million would be needed in 2026 and a final $174 million in 2027 to achieve all the CEF’s ambitions.
According to NYSERDA’s figures, the 10-year CEF plan would involve total expenditure of $4.946 billion, a rise of $3.857 billion on the $2.092 billion already committed to current programs.
The CEF vision would focus on four key areas, of which two, the New York Green Bank and NY-Sun initiatives, are already up and running.
$2.5bn for demand-side measures
In addition to providing the remaining $781.5 million promised to bring the bank up to its $1 billion capitalization, and supplying $1 billion per year to the NY-Sun program aimed at fostering a subsidy-free solar sector in the state, the CEF would devote $2.5 billion to developing the demand-side market for renewable energy and around $700 million to fostering business and technological innovation to drive the supply-side aspect of the equation.
To supply the flexibility needed to react to changes in the renewable energy market, NYSERDA wants the freedom to re-allocate funds between the two new streams as required.
If the CEF strategy is approved, a Program Investment Plan will be drawn up by NYSERDA for approval and detail work by the state’s Department of Public Service within 120 days, although this week’s 88-page proposal did not give an expected date for initial approval of the scheme.
Private investment to replace taxpayer dollars
Under the CEF strategy, which focuses on distributed generation, energy efficiency and transport solutions but also calls for a new state policy for grid-connected renewables by 2016, private investment will incrementally replace taxpayer funding and changes in the energy mix will bring transmission infrastructure savings.
Echoing recent predictions from global investment banks, the report predicts 60% of the state’s energy mix will have to come from non-fossil fuel centralized generation by 2030 for GHG targets to be met.
NYSERDA’s report predicts successful implementation of its CEF plan will result in 181 million MWh of energy consumption reduced, 55 million MWh of renewable energy generated, 618 million British thermal units (MMBtu) of oil and gas avoided and 57 million tons of GHG reduced, by 2025.
Under the scheme, the public body has also proposed a ‘bill-as-you-go’ approach with utilities to prevent it accumulating cash reserves in future.