New York City’s electricity is primarily generated by fossil fuel-fired power plants which typically produce higher levels of greenhouse gases than generators in the rest of the state. Physical bottlenecks in the City’s electrical transmission infrastructure have limited its ability to receive additional power from zero-emission generators located in other parts of the state or neighboring regions. The lack of downstate renewable generating assets and physical constraints have created a challenge for the state in reaching its carbon reduction targets established in the Climate Leadership and Community Protection Act (CLCPA).
3 min read
In October we discussed heating oil in New York City and the potential liabilities purchasers may have in the future given the city’s established clean energy policy goals in the Climate Mobilization Act (CMA) and the state’s Climate Leadership and Community Protection Act (CLCPA). As New York continues to focus on winter heating needs and the city's energy mix continues to evolve, the NYC district steam network, like fuel oil, may stand in the crosshairs of carbon policy in the years to come.
Topics: Markets NYISO Renewables Resiliency
3 min read
Heating oil is facing an image issue in New York City. Pressure continues to mount against fossil fuels from many angles including environmental groups, policymakers, and competing energy sources that are either cheaper, cleaner, now or potentially both cleaner and cheaper in the future. With the Climate Mobilization Act serving as the primary platform for the city’s campaign against carbon emissions, many are wondering, “is the writing on the wall for heating oil in New York?”
4 min read
New York, like many states across the country, has a standard by which certain qualifying renewable generation assets are awarded one Renewable Energy Certificate (REC) for each MWh of electricity delivered to the grid. RECs provide two main functions to the market:
3 min read
For as long as we can recall, there has been a significant difference between the price of capacity in upstate New York compared to capacity prices in New York City. It was common for capacity to trade at $3 to $5/MW-day in upstate New York and $15 to $18/MW-day downstate.
2 min read
It comes as no surprise to energy managers that their electric bills are often the highest during the summer months. This is due, in large part, to the additional electric loads required to keep buildings and facilities comfortable during the hottest days of the year. While the impact on those summer bills may be obvious from a consumption perspective, a less obvious but equally important factor that affects electricity expenses is the installed capacity (ICAP) tag set each summer. In New York, every electricity customer’s ICAP tag is determined by the amount of electricity used when the power grid reaches its system peak. Current New York Independent System Operator (NYISO) rules state that the system peak must occur in the months of July and August on a non-holiday weekday. Last summer, the peak hour occurred at 5:00 PM on July 27, 2020, when the electricity demand on the grid was 30,660 MWs.
2 min read
The State of New York may be a microcosm of our nation’s energy past and future. New York has been trying to balance nuclear power plant retirements with new gas-fired generation while also encouraging the development of renewable power assets. On Friday morning, April 30, the last functioning nuclear reactor at Indian Point was shut down. For the past 60 years, electricity from this nuclear power plant provided New York with 565 Terawatt-hours of electricity. Before the second reactor was shut down last year, Entergy, the operator of Indian Point, estimated that the output of the two reactors supplied the Lower Hudson Valley and New York City with approximately 25% of its electricity. Environmentalists and politicians alike have described Indian Point as a threat to the safety of the millions of people who live near the plant, located 35 miles north of New York City, and many cheered its removal from service.
Topics: Markets NYISO Sustainability Renewables Resiliency
3 min read
Wholesale electricity prices in New York City have been rising for the last several months. Figure 1 shows how forward prices for calendar years 2022 through 2025 have been trading over the last five years. Note that wholesale prices were at a low at the start of the pandemic in March 2020. Despite a correction in the late fall when the market dropped, the overall trend has been bullish for nearly a year. Additionally, this is a classic example of a contango market, where prices get more expensive with each subsequent time period in the forwards. Figure 1 also shows that the least expensive calendar year is 2022 and that 2025 is the most expensive.
3 min read
On Tuesday, March 16, 2021, the New York State Energy Research and Development Authority (NYSERDA) released a status report on “Regulations Establishing Energy Efficiency Standards.” In addition to reporting on the status of energy efficiency regulations, this report includes recommended amendments to New York law that would add new categories to the state’s energy efficiency performance standards. These recommendations have been crafted into a “Program Bill” – legislation written by the Governor’s administration – which is being shopped around in the State Legislature for a sponsor.
Topics: Markets NYISO Resiliency
4 min read
Electricity prices in NYC are starting to show signs of consolidation. Earlier this winter, mild temperatures in the months of November and December placed downward pressure on both near-term gas and power futures prices. This can be seen in Figure 1, which shows wholesale forward electricity prices in NYC for calendar years 2022 through 2025. This market correction, which lasted through the end of December, created good purchasing opportunities for many in NYC. Since the beginning of the year, prices have rallied, increasing between 2.5% and 5.1% across all calendar years except 2023. Note the flat to downward slope of electricity prices for calendar year 2023 (black line). While near-term prices in 2022 have rallied, falling prices in 2023 and have produced a degree of consolidation and created good purchasing opportunities.