On January 20, 2022, the New York Public Service Commission (Commission) issued its Order on Power Grid Study Recommendations concerning investments in the State's electric transmission and distribution system that are necessary to meet the mandates of the Climate Leadership and Community Protection Act (CLCPA). The Order focused mainly on changes to New York's offshore wind program, but also addressed future onshore bulk transmission planning needs, the proposal to consider Renewable Energy Zones (REZs), and approaches to deploying advanced technologies.
The Order is the latest step in a process that began in 2020, when the Accelerated Renewable Energy Growth and Community Benefit Act directed State agencies and other stakeholders to undertake a comprehensive study of transmission and distribution system needs. In January 2021, the Department of Public Service Staff, working with NYSERDA, filed the Initial Report on the power grid study (Initial Report).
The Order adopts key transmission-related modifications to New York's offshore wind program, signaling strongly and for the first time in New York that it will move toward a "meshed" offshore wind transmission system instead of the previously favored "radial" interconnection lines from individual generation facilities. With such a network, projects are interconnected to an offshore grid, which is further connected to the onshore system at two or more interconnection points. The Commission stated, "[W]e are not in a position today to decide on whether to modify the Commissions existing preference for a direct radial approach to the offshore wind transmission. However, the information and comments in the record to date suggest that it is time to consider a different approach." That different approach, the Commission ordered, should include at the outset that NYSERDA's future offshore wind renewable energy credit (OREC) procurements require offshore wind projects be designed to accommodate a meshed transmission network, and that NYSERDA will include in its form OREC purchase and sale agreements pricing provisions to accommodate the possibility of injection into multiple zones within the New York Control Area. The increasing amount of offshore wind developers and available lease sites, the potential savings of a meshed network, and the relatively small increase in project costs due to future-proofing (noted by the Commission to be .4% of project cost for the construction of a mesh-ready substation), influenced the Commission's decision.
The Order also directs NYSERDA to include eligibility criteria in its offshore wind procurements that would require the use of high voltage direct current (HVDC) transmission where appropriate to preserve maximum efficient use of constrained cable corridors, which has been a particular issue in New York City's harbor and rivers. While cheaper to build, alternating current (AC) lines carry less capacity than DC lines of the same physical size, and using HVDC lines provides significant technical benefits over high-voltage AC, including power flow controls and easier black start capabilities.
After reviewing the Initial Report, the Commission also found that additional work is needed to identify plausible scenarios for interconnecting offshore wind generation into New York City. Noting that "recent developments call into question . . . assumptions in the base case" of the Initial Report, particularly related to proposed interconnection locations of Tier 4 and currently under development offshore wind projects the Commission determined that "additional work is needed to identify plausible scenarios for interconnecting offshore wind generation into New York City at levels identified . . . ." The Commission further authorized Con Edison to file a petition on its proposed "Clean Energy Hub" that could accommodate 3,000 MWs of offshore wind capacity in New York City.
With respect to energy storage, the Commission noted the study's projection that by 2040 over 4,000 MWs of storage will be needed in New York City alone and over 3,000 MWs on Long Island, and authorized NYSERDA to award additional scoring credit in the economic-benefits-and-viability categories for energy storage facilities integrated in offshore wind proposals, provided they are located in New York City or Long Island.
With respect to the "Renewable Energy Zones" that some have proposed, the Commission stated that its coordinated planning processes will timely support achievement of the CLCPA's goals, and determined no need to create a separate REZ process.
In terms of what comes next, NYSERDA will integrate these changes concerning mesh network optionality, OREC redesign, and energy storage into the next OREC solicitation, which is expected to be released in 2022. Con Edison will file a petition on its proposed Clean Energy Hub, which interested parties will likely have an opportunity to comment upon. New York's transmission planning continues to be dynamic on the policy front so we expect further changes and refinements as markets develop and the State's energy transition continues.
To view Foley Hoag's Energy & Cleantech Counsel blog please click here
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.