The state Independent System Operator is calling for small natural gas peaker plants to remain open past their 2025 retirement dates while also highlighting growing risks to the state electric grid’s reliability.

Two reports issued recently by the ISO show how power producers are trying to deal with the state’s climate change agenda and the slow build-out of green energy projects.

The ISO’s 2023-2032 Comprehensive Reliability Plan highlights growing risks to electric system reliability, including: projected increases in peak demand due to electrification of the transportation and building sectors; additional generator deactivations; delayed implementation of planned infrastructure projects; and extreme weather. The reliability plan is released every two years and is the ISO’s plan to maintain a reliable bulk electric grid based on expected changes and conditions over a 10-year planning period. The plan also includes the addition of several large commercial projects in upstate New York that are in development and are projected to significantly increase energy use over 10 years. S state legislation enacted in 2022 will require the phase-out of the New York Power Authority’s small natural gas plants located in New York City by Dec. 31, 2030.

If demand on the grid grows at a rate greater than the buildout of new generation and transmission, reliability deficiencies could arise within the CRP’s ten-year planning period. Potential risks and resource needs identified by the ISO may be resolved by new capacity resources coming into service, construction of additional transmission facilities, increased energy efficiency, integration of distributed energy resources and/or growth in demand response participation.

“Our latest report demonstrates the continued importance of the NYISO’s in-depth planning process and the need to closely monitor the rapidly changing electric grid,” said Zach Smith, ISO vice president of system and resource planning. “In this CRP, we highlight several risk factors that could adversely affect system reliability in the months and years ahead.”

The plan underscores the importance of the timely completion of planned transmission projects – primarily the Champlain Hudson Power Express (CHPE) project – to maintain system reliability. Without the CHPE project in service by May 2026 or other offsetting solutions, reliability margins within New York City would be deficient beginning in 2026.

TROUBLING TRANSITION

Transition from a summer peaking system to a winter peaking system also poses challenges to grid reliability. This shift, driven by the electrification of the building and transportation sectors, is forecasted to occur within ten years. A winter peaking system introduces new reliability concerns, particularly around fuel availability for gas-fired generators. Based on a recent assessment of New York’s fuel and energy security, the CRP states the following:

Preliminary results of the 2023 Fuel and Energy Security study demonstrate that the ISO will need to rely significantly on dual-fuel generation resources to support winter system reliability into the next decade and changes to the resource mix may complicate system operations during multi-day cold snap conditions. The frequency and severity of projected potential loss of load events grow over the modeling time horizon as the generation mix evolves and the demand for electricity increases.

Dispatchable emission-free resources are proving to be a tough nut to crack right now. In May, the state Public Service Commission initiated a proceeding to identify technologies that can close the anticipated gap between the capabilities of existing renewable energy technologies and future system reliability needs, including asking how to define “zero-emissions” for purposes of the 2040 zero-emissions target and whether that definition should include advanced nuclear, long duration energy storage, green hydrogen and demand response.

PEAKER PLANTS

The ISO’s Short-Term Reliability Process Report recommends peaker plants scheduled for retirement in May 2025 must remain in service temporarily to keep the grid reliable in New York City. Peaker plants are relied upon as a last resort when consumer demand is highest.

As The Post-Journal reported earlier this year, the ISO’s second quarter Short Term Assessment of Reliability found reliability margins in New York City would be deficient by as much as 446 megawatts starting in May 2025. The reliability deficiency is being driven by increased demand for electricity, economic activity, and recent generator retirements per emissions requirements set forth by the state Department of Environmental Conservation. Overall, the deficiency improves if the Champlain Hudson Power Express (CHPE) project from Hydro Quebec to New York City enters service in the spring 2026.

As of May 1, 2023, 1,027 megawatts of peaker plants have deactivated or limited operation in New York City. An additional 590 MW of peakers are expected to become unavailable beginning May 1, 2025, per DEC emissions requirements, known as the “peaker rule.” With the additional peakers unavailable, the bulk power transmission system will not be able to serve the forecasted demand securely and reliably under normal weather conditions. Extreme weather, which is often accompanied by increased demand for electricity, raises the risk of outages.

“The NYISO is committed to a reliable transition of the electric grid to emission free resources,” said Emilie Nelson, the ISO’s executive vice president and chief operating officer. “The electric system supports the health and safety for all New Yorkers and the state’s economy. We must also be cognizant of the impacts peaker plants have on surrounding communities. This means running these units only when conditions require and closing them when no longer necessary for reliability.”

SEVERE WEATHER WORRIES

The Comprehensive Reliability Plan discusses the ability of the New York generation fleet to serve the increased winter demand the state will face as it electrifies its power grid. While the New York grid is transitioning to zero-emissions by 2040, the reliability of the grid will continue to significantly rely on dual-fuel generation resources to support winter system reliability into the next decade, and changes to the resource mix may complicate

system operations during multi-day cold snap conditions. Dual-fuel generation currently represents three quarters of the downstate generation fleet; additional deactivations of dual-fuel generation beyond what is

planned will exacerbate the winter reliability risk.

Those worries nearly became reality last winter during Winter Storm Elliot, according to the Federal Energy Regulatory Commission. The storm was the fifth in the past 11 years in which unplanned cold weather-related generation outages jeopardized grid reliability. Twice in 11 years the reliability of natural gas delivery to homes and businesses has been jeopardized to the point that a break in the weather is all that kept natural gas flowing to homes in the midst of life-threatening cold snaps.

“These recurring failures make clear that America’s natural gas infrastructure and electric grid continue to be severely challenged during extreme cold weather events, repeatedly jeopardizing reliability during life-threatening

conditions, even when technology exists to protect the vulnerable components,” FERC’s October inquiry into Winter Storm Elliott states.

FERC has made several recommendations aimed at better planning and communication amongst power grid operators and natural gas companies to prevent such situations, but are also calling FERC officials are calling for an independent research group to study whether additional natural gas infrastructure, including interstate pipelines and storage, is needed to support the reliability of the electric grid and meet the needs of natural gas Local Distribution Companies. The study should include information about the cost of the infrastructure buildout. If that study shows additional pipelines and storage are needed, it would contradict New York state’s policy preference over the past several years of limiting natural gas infrastructure development in favor of renewable energy development.

The ISO’s Comprehensive Reliability Report also touches on similar issues, noting the state’s electric generators ability to serve increased winter demand will be more challenging if faced with a natural gas shortage.

“While the New York grid is transitioning to zero-emissions by 2040, the reliability of the grid will continue to significantly rely on dual-fuel generation resources to support winter system reliability into the next decade, and changes to the resource mix may complicate system operations during multi-day cold snap conditions. Dual-fuel generation currently represents three quarters of the downstate generation fleet; additional deactivations of dual-fuel generation beyond what is planned will exacerbate the winter reliability risk. The frequency and severity of projected potential loss of load events grow over the planning horizon as the generation mix evolves and the demand for electricity increases,” the ISO’s CRP states. ” During even extreme cold snaps, the as-planned statewide system margins are sufficient in winter assuming fuel is available to the generation fleet. However, if natural gas is unavailable to the generation fleet, a statewide deficiency would occur in winter 2029-30; this would accelerate to winter 2027-28 for an extreme one-in-100-year cold snap.”

RELIABILITY RECOMMENDATIONS

The ISo states New York’s current reliance on neighboring systems is expected to continue through the next

ten years. Without emergency assistance from neighboring regions, New York would not have

adequate resources throughout the next ten years. Extreme events, such as heat waves or storms, pose a threat to grid reliability throughout the next 10 years and could result in deficiencies to serve demand statewide, especially in New York City. The outlook could improve as more resources and transmission are added to New York City.

The New York statewide grid is reliable for normal weather in the winter for the next ten years, but

deficiencies would arise as early as winter 2027-2028 for an extreme 1-in-100-year winter cold snap coupled with a shortage of gas fuel supply. This deficiency would grow to a 6,000 MW shortfall by winter 2032-2033. Additional deactivations of dual-fuel generation beyond what is planned will exacerbate the winter reliability risk.