Promote Zero Emissions Energy

Summary of provisions

66-v of the public service law:

Section 1: The bill includes definitions for the following terms: "zero emissions energy systems" means systems, other than renewable energy systems, that generate electricity or thermal energy through the use of technologies that do not increase the concentration of greenhouse gas in the atmosphere in the process of generating electricity; "renewable energy systems" and "greenhouse gas" have the meanings as defined within the CLCPA.

Section 2. Within one year of the bill's effective date, the PSC would establish a competitive program to attract private sector investment in a minimum of one gigawatt of zero emissions energy systems. The PSC would determine, with public input, which technologies would be techni- cally feasible by 2030 and therefore eligible for the program, in order to meet the CLCPA's target of having a statewide electrical demand system be zero emissions by 2040. The PSC would start to implement the program within two years of the bill's effective date. Zero emissions energy systems under the program would commence commercial operation by 2030.

Section 3. Consistent with the provisions of the CLCPA, the PSC would be able to temporarily modify the program, if electric system reliability would be impeded or if consumer costs increase significantly.

Section 4. Within three years of the bill's effective date, the PSC would review the program to determine if the target for the deployment of zero emissions energy systems is being met. 66-w of the public service law:

Section 2. References the definition for "zero emissions energy systems" provides the commission with establishes and implements section 66-s of this article, along with the owner of the zero emissions energy system,it a third party acting on the owner's behalf, as an ongoing agreement with a public entity that implements section 66-u of this

article, comply with 66-r of this article and section 224-d of the labor law.

Section 3: The effective date is immediate upon enactment.

Justification

The Climate Action Council, established pursuant to the CLCPA, has received information from studies on emissions reduction pathways needed to reach the CLCFA goals, while maintaining reliability and reducing costs to consumers. All scenarios that achieve carbon neutrality share 'significant progress on: energy efficiency and end-use electrification; switching to low-carbon fuels; decarbonizing the electricity supply; and the use of negative emissions measures and carbon capture technologies.

The studies, commissioned by the New York Independent System Operator and New York State Energy Research and Development Authority (NYSER- DA),indicate that upwards of 20 gigawatts of dispatchable and emis- sions-free resources will be needed to balance the electric power system. by 2040 as the economy electrifies and reliance on intermittent renewable and duration limited resources increases. Those resources Must be significant in capacity, able to operate continuously over many hours or days,and flexible enough to meet rapid, steep ramping needs. The studies further find that battery storage resources.help address shorter duration variability from renewable resources but, based on current technology, do not provide the long duration power generation that is necessary over seasonal periods of reduced renewable generation.

The CLCPA requires that 70 percent of electricity be renewable by 2030.

The bill is intended ultimately to create a market for the kind of tech- nologies that will comprise the remaining 30 percent of power generation technology needed to maintain reliability as progress is made toward achieving the goal of a zero emissions power system by 2040.

The language of the CLCPA has created a cloud of investment uncertainty that this bill would help clear. The CLCPA prohibits power plant owners from using technologies that are defined to be part of the offsets program, such as: carbon capture and sequestration; anaerobic digesters, which would involve renewable natural gas; and biofuels. As part of the Climate Action Council process, the New York State Department of Envi- ronmental Conservation (DEC) has interpreted the CLCPA to mean that, as long as the DEC does not establish an offsets program, these technolo- gies are available for the use of the generation sector. This bill would help remove uncertainty and promote the development of a market to foster the investment needed to meet the CLCPA's goals reliably.

For example, green hydrogen, produced by carbon-free means as required by the CLCPA, and captured biogas that would otherwise escape into the atmosphere, can be valuable in the energy mix of a decarbonizing economy by providing generators with a dispatchable, carbon-free fuel to backup renewable generation and energy storage. Consistent with the CLCPA's goals, fostering private sector investment in at least one gigawatt of electricity generated by zero emissions energy systems by 2030 that can provide the operating flexibility and longer duration generation that intraday battery storage systems cannot is in the public interest, in order to develop a market for these resources. This program also could

implement the recommendations of the Climate Action Council for how to meet the CLCPA's goals.

Under the bill, the PSC could decide to establish the program for "zero emissions energy systems," in a. manner consistent with NYSERDA's programs for research, development and demonStration of innovative tech- nologies to meet the goals of the CLCPA while maintaining reliability.

There is no impact upon, or conflict with, renewable energy and energy storage technologies, as the definition of zero emissions exempts renew- able energy systems under the PSC's section-of the CLCPA and those renewables have their own program with their own funding. Other programs such as offshore wind and energy storage also have their own goals and are separately funded. The PSC also could decide whether retrofitting existing facilities would qualify under the program. The bill would send a market signal for needed technologies and associated fuels to be developed in a commercially available and cost-effective way.

The costs of the program are addressed by the language that allows the PSC to modify the program, if costs become too high. The PSC would decide program parameters that would be best for the public interest and reach the goals of the CLCPA in a cost-effective way. The source of funding for the program would be decided by the PSC, depending on how the Commission decides to structure the program. The definition of "zero emissions energy systems" states that greenhouse gases, which are defined by the CLCPA to include carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride, and any other air emission that impacts climate change, would not be increased. The CLCPA also defines "co-pollutants" to mean hazardous air pollutants produced by greenhouse gas emissions sources. The DEC's Air Toxics Program already includes requirements for hazardous air pollutants. Emissions of nitrogen oxides and sulfur dioxide already are being reduced by emission control technologies that are commercially available and cost-effective.

New York's power sector has reduced the emission rates of nitrogen oxides by 92 percent and sulfur dioxide by 99 percent. The electric generation sector has decreased greenhouse gas emissions by nearly 55 percent, the most of any other sector of the economy. New York State should become a national. leader in the use. of zero emissions systems, while maintaining reliability, improving the economies and health of local communities, and increasing affordability.

Prior legislative history

2023/24: S2585B- REPORTED AND COMMITTED TO FINANCE

2021/22: S6497 - REPORTED AND COMMITTED TO FINANCE

Fiscal implications for state and local governments

None.

Effective date

Immediately.