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NYC gets greener! What we learned from Tier 4 winners

NYC’s grid is getting greener to meet climate goals.

Published November 17, 2021

In October 2021, we hosted developers of two projects with one goal: to inject New York City with an unprecedented amount of clean electricity. Thanks to NYSERDA’s Tier 4 program, Clean Path NY (CPNY) and Champlain Hudson Power Express (CHPE) have the chance to deliver 18 million MWh of renewable energy to the city. Developers of these transformational projects came together to discuss New York City’s role in meeting statewide climate goals and to share their plans to clean up the power grid.

NYC power today

In 2019, New York’s Climate Leadership and Community Protection Act set mandated targets for decarbonizing the state’s electricity. These mandates call for 70 percent renewable energy by 2030 and 100 percent zero-emission energy by 2040, and they’re to be implemented via the state’s Clean Energy Standard (CES). Renewables currently account for 27 percent of energy generated statewide, with another 23 percent contracted or in development. The two winning Tier 4 projects will contribute to the remaining 20 percent needed to reach the 70×30 goal.

The overall statewide picture, however, doesn’t show the disparity between the upstate and downstate grids. The vast majority of the energy used upstate comes from renewable sources, while downstate is still heavily reliant on fossil fuels, especially after the closure of the Indian Point nuclear facility earlier this year. The Tier 4 program, established under the CES by the Public Service Commission in October 2020, is designed to address this by bringing large-scale renewable energy to the NYC grid.

What is Tier 4?

The CES runs on renewable energy credits (RECs), which are certificates that represent the environmental attributes—e.g. avoided greenhouse gas emissions and air pollutants—of 1 MWh of renewable energy. RECs are created as renewable energy is generated; they can then be bought and sold as commodities to generate revenue for renewable energy projects and transfer emissions reduction value to the purchaser. There are several eligibility tiers that determine which renewable energy projects can generate RECs. To be eligible for Tier 4 RECs, qualifying resources must be either located in NYC or delivered to NYC over a new transmission line.

The winners

During Climate Week 2021, Gov. Kathy Hochul announced two recommended contract awards to be reviewed for PSC approval. Combined, the CPNY and CHPE projects will bring approximately $8.2 billion in economic development investments, $460 million in community benefit fund investments, $2.9 billion in public health benefits and an expected greenhouse gas reduction of 77 million metric tons over 15 years.

At the October 27th event, panelist Luke Falk (EnergyRE) introduced Clean Path NY by highlighting the inherent challenge of meeting the state’s 70×30 goal while also addressing the transmission congestion that has historically created a bottleneck between the upstate and downstate grids. To remedy this, and to maximize co-benefits, CPNY will include:

The anticipated impact is a roughly 22 percent reduction in statewide fossil fuel generation annually. “When you bring that much clean energy online,” Falk emphasized, “and you deliver it into Zone J [NYC], it has a ripple effect across the state’s electric system.”

Source: Tier 4 – New York City Renewable Energy, NYSERDA

NYC will also gain access to existing, reliable hydropower via the Champlain Hudson Power Express. Hydropower is not an intermittent power source, so it doesn’t face the same reliability challenges as some other renewable sources. “24/7, 365 days of the year, this line is going to deliver 1,250 megawatts of clean energy into New York City,” explained panelist Don Jessome, President and CEO of Transmission Developers. This project will include:

By delivering 10.4 TWh of power a year, CHPE will be able to replace over half of Indian Point’s generation. Construction on the line is already permitted and may start as early as 2022. 

What comes next?

If these proposals receive PSC approval, New York City can expect clean power delivery from CHPE in 2025 and CPNY in 2027.

But power isn’t the only commodity of interest to city dwellers; building owners seeking to comply with Local Law 97 may hope to purchase Tier 4 RECs to offset their buildings’ greenhouse gas emissions. Tier 4 RECs will be sold on the voluntary market, and Local Law 97 allows RECs as a compliance option if the power is located in or sinks into NYC. However, the NYC Department of Buildings rulemaking process that will determine eligibility details is still in progress, so keep up with Urban Green’s future programming to gain clarity as new rules emerge.

To learn more about each winning proposal, including investments in disadvantaged communities, public health benefits and environmental impacts, watch the recording of New Green Power in NYC: A Conversation with Tier 4 Winners.