New York State Could Set a National Trend with its Clean Energy Standard

by | Aug 1, 2016

New YorkNew York State is moving forward with an idea that could become a harbinger of things to come, nationally. It’s the Clean Energy Standard, which focuses more on producing clean power and less on renewable energy standards.

Now, the purpose of New York’s Clean Energy Standard is to help the state generate half of its electricity from sustainable energy sources by 2030, which includes not just wind, solar and hydro — but also nuclear energy. At the same time, the proposal would require that coal plants be retired by 2020.

“If you care about climate change, and don’t just have an ideological stand on a particular energy source, then you know that we need all low-carbon sources as fast as possible to have any hope of reigning in the most adverse environmental effects of burning fossil fuels,” writes Jim Conca, in Forbes.

According to Conca, a geochemist, New York gets about 30 percent of its electricity from nuclear and 26 percent from renewables. Beyond making green energy half of the state’s energy portfolio in 15 years, it would also subsidize nuclear energy to prevent closure of plants in the northern part of the state.

The clean energy plan would cost $965 million, the state says, but produce $5 billion in benefits.

Specifically Exelon Corp. has said that it would close two plants there if this clean energy proposal is not enacted by the autumn. Entergy Corp., meantime, says it could close one plant next year. By way of background, Exelon announced that it will close two plants in Illinois within the next two years, noting that those units can’t compete with natural gas. 

It should all be viewed in the context of the Paris accords, which would keep global temperatures from rising more than 2 degrees Celsius by mid century. To get there, Conca says that there are basically two options: enacting a carbon tax or using a Clean Energy Standard.

To that end, EPA’s former administrator under George Bush II, Christine Todd Whitman, says that carbon must have a price — whether it is a tax on the front end or a penalty on the back end. That would make cleaner energy sources such as nuclear energy competitive in the market while also creating jobs and wealth in the communities where the components are assembled.

Nuclear energy, of course, is now being challenged more than at any time in its history. Five such plants have already closed and Whitman says that as many seven more might be shuttered in the near future. In today’s economic environment, the regional transmission organizations that order up electric generation and schedule the flow of electrons over the wires are looking for the cheapest energy sources. And right now, that’s natural gas, which is besting every fuel source.

“Ultimately, it means penalizing companies that emit too much pollution or putting a price on carbon,” Whitman says, also the former GOP governor of New Jersey and currently the co-chair of the CASEnergy Coalition. “The regulatory structure does not now give an added value to clean power.”

Realistically, a carbon tax is off limits, for now. A Clean Energy Standard is more realistic, depending on how broadly it is defined.

A Congressional Budget Office (CBO) report found that such a national standard would reduce greenhouse gases. However, in that analysis, coal is replaced by natural gas, as well as wind, solar and biomass facilities. Prices, too, would rise, although such increases would be mitigated as more homes and businesses apply new energy efficiency technologies.

The Obama administration has defined a clean energy standard to include not just all green fuels but also natural gas, nuclear and coal plants if they they have carbon capture and sequestration. Such an advanced coal technology remains elusive.

 “Either a renewable energy standard or Clean Energy Standard would reduce carbon emissions in the United States compared with the amount that would occur in the absence of the policy,” says the CBO report.  Either one would “raise the average cost of generating electricity … because, in the absence of the standard, regulators and generators would generally choose the lowest-cost method of producing electricity.” 

The CBO goes on to say that giving exact figures is impossible because it is unknown what form any prospective policy would take. It’s all complicated by the fact that utilities could replace their old coal plants with anything from wind to natural gas to biomass, all of which would have a varying effect on emissions. 

It adds that the most effective way to cut carbon emissions is through cap-and-trade program where industries trade credits to remain in compliance.

Likewise, 31 states as well as the District of Columbia have renewable standards already in place, which may be more onerous than a federal rule. CBO does say that a single federal policy would more efficient and it could be accomplished at a lower cost than having numerous states do the same. 

If New York State enacts its Clean Energy Standard, it may set the example for other states to follow, or at the national level once the next president is sworn in. It is certainly less controversial than a federal renewable portfolio standard, not to mention a cap-and-trade program or a carbon tax. Still, with all the partisanship, any federal legislative or regulatory solution will remain a challenge. 

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