Retiring New York City's peaker fleet could be the endgame for fossil fuels
Astoria. Gowanus. Harlem River. Hell Gate. Arthur Kill.
These are the names of some of New York City's 19 peaker plants that dot the landscape of the South Bronx, Brooklyn, Queens, and other low-income communities of color. The plants generate 6,093 MW of fossil-fueled capacity across 89 individual units that are aging and well past retirement, with some still running on fuel oil or kerosene.
A new campaign launched by the PEAK Coalition, a group comprised of environmental justice and clean energy advocates, is hoping to end the long-standing pollution burden on underserved communities with a plan to replace the city's fleet of peaker plants with renewable energy and battery storage by 2030.
On Wednesday, the New York City Environmental Justice Alliance (NYC-EJA), UPROSE, THE POINT CDC, New York Lawyers for the Public Interest (NYLPI) and Clean Energy Group (CEG) released a comprehensive roadmap, representing the first detailed plan that sets forth specific strategies and policies to retire and replace a city’s entire fleet of fossil-fueled peaker plants.
By 2025, about 3.2 GW--approximately half of the city's existing peaker plants--can be replaced with a combination of offshore wind, rooftop solar, energy efficiency measures, and battery storage, according to the report. By 2030, all remaining peaker plants in the city--approximately 2.9 GW--can be replaced using a similar combination of these resources.
The majority of these are already required under the Climate Leadership and Community Protection Act (CLCPA), which establishes specific targets for clean energy development, including 6 GW of rooftop and community solar by 2025, 3 GW of energy storage by 2030, and 9 GW of offshore wind by 2035.
“We’re looking for support for community-based installations, and potentially ownership, so that we have localized energy and resiliency on the grid because we have renewables that are placed in the communities in need,” Hayley Gorenberg, Legal Director at NYLPI, told NPM. “These are the environmental justice communities that have been most affected by everything, from the localized pollution of fossil fuel plants to the ratepayer impacts of having to fork over an outsized percentage of their incomes to be able to pay to get the energy that they need.”
Local generation in New York City is significantly limited by land availability, while the ability to import clean power is restricted by transmission bottlenecks. These challenges have historically impeded the city’s use of clean energy resources, while increasing the need for locally sited, fossil-fueled generators.
But these generators are grossly overpaid--and underused. In 2019, the city's peaker portfolio ran just 5.2 percent of the time, or about 450 operational hours, while receiving full capacity payments of about USD 422m that year, and USD 4.9bn over the last decade.
Yet despite the city’s power plants operating just a fraction of the time, New Yorkers continue to pay some of the highest capacity rates in the country, along with the health and environmental justice costs of keeping them in place.
“We need solutions that are not only providing energy locally, creating more resilience, and reducing pollution, but also building community wealth and self-sufficiency and bringing jobs in," Gorenberg said. "It’s a really comprehensive approach to serving environmental justice communities and rebalancing power, not only in terms of the power people are drawing into their homes, but also power and well-being in communities.”
The potential of policy
New York City's peaker fleet emits nearly 2.7 million tons of CO2 annually, constituting nearly five percent of the city's 2019 CO2 emissions. Based on New York State Department of Environmental Conservation guidelines on the cost of carbon, CO2 emissions from these plants rack up a global cost of more than USD 300m each year.
The good news is that some of these plants are already in the queue for retirement, repowering or replacement. The New York Power Authority (NYPA) recently announced their intention to eliminate emissions from its natural gas fleet by 2035. Other owners, like LS Power, are actively converting their existing fleet to battery storage resources.
The roadmap’s accelerated clean energy transition, while technically feasible and cost-effective, will require measures to ensure alignment with a policy-driven renewable energy framework by public agencies and regulators. Advocates say that agencies like the New York Independent System Operator (NYISO), in coordination with the Federal Energy Regulatory Commission (FERC), will need to establish market rules and mechanisms that support the competitive and cost-effective deployment of energy storage and other clean resources.
“There was movement at FERC around Order 841 to try to make sure that energy storage was more equally valued across systems, and that really leveled the playing field for storage versus other resources,” Seth Mullendore, Vice President of Clean Energy Group, told NPM. “That has not been fully implemented as of yet, and there have been some setbacks where things are being done at the state level in New York and at the ISO level. But then FERC has pushed back as far as minimum bid offers that are establishing a floor for resources like renewables and energy storage that recent FERC rulings have seen as being artificially inflated to state policy.”
Issued in 2018, Order 841 directs regional grid operators to remove barriers to the participation of electric storage in wholesale markets. The Order affirms that storage resources must be compensated for all of the services provided and moves toward leveling the playing field for storage with other energy resources.
“I know there's an ongoing back and forth between FERC, the state and the ISO as far as how to resolve this, so there certainly needs to be some issues ironed out there,” Mullendore said. “But I think it's going to be at the state level that recognizes energy storage and its ability to provide grid services and flexibility, as well other demand side resources that haven't been implemented that need to be explored more.”
Advocates are also pushing for the New York State Energy Research and Development Authority (NYSERDA) and other state agencies to advance policies and procurements around offshore wind, energy storage, energy efficiency, distributed solar, and local and regional transmission and infrastructure.
“I think the targets that are in place are generally good,” Mullendore said. “What we’re missing right now is the mechanism to really achieve those goals. There are a lot of barriers to renewable participation that we’re going to need extra measures to try to overcome.”
The endgame
A bill recently passed in the state Senate could push the initiative over the finish line. Sponsored by New York Sen. Jabari Brisport, the legislation requires fossil fuel power plants located in or near environmental justice communities which operate only during periods of peak demand to convert to renewable energy.
“We very much support efforts that are looking to specifically target power plants that have historically harmed the communities around them, which are primarily low-income communities and communities of color,” Mullendore said.
Local and state legislators will also need to step up to fully implement measures like benchmarking, building retrofits, and distributed energy mandates of the Climate Mobilization Act, or Local Law 97. In the meantime, advocates continue to push for accelerated installation of solar, battery storage, and other clean energy technologies at publicly owned buildings and sites, including Rikers Island and public schools.
“The kinds of ambitious timelines that are reflected in the CLCPA must be operationalized because climate change is upon us," Gorenberg said. “These are frontline communities, and they are already suffering impacts of climate change. The science compels that we have to grapple with this as the crisis that it is and, if anything, the additional impacts of things like the pandemic, which show us that people are getting sick and dying at higher rates because they’re exposed to air pollution generated by fossil fuel plants. This is not a competing crisis but more an accentuating crisis that shows the urgency of making sure that we stick to, and ideally exceed, the goals that we set forth in the law.”