By Rich Heidorn Jr.
SARATOGA SPRINGS, N.Y. — The last panel of the Independent Power Producers of New York’s fall conference last week featured an environmental activist and representatives of the energy storage, wind and solar industries.
And then there was Karen Moreau, charged with making the case for the long-term future of natural gas. She decided to try humor.
“If natural gas was on an online dating site … the profile would be ‘clean, reliable, affordable and flexible,’” said Moreau, executive director for the American Petroleum Institute in New York. “I don’t know how many people would take a look, at least not at first. They’d probably go to some of the other, more attractive, sexy forms of energy like wind and solar.
“But then again, online dating does involve a certain element of hope and fantasy, and so let’s talk about statistics,” she continued.
And the statistics, she said, indicate gas will be needed for the foreseeable future to help balance intermittent renewables.
Reserve Margins and Ancillary Services
Moreau quoted a 2016 National Bureau of Economic Research study that concluded a 1% increase in fast-reacting fossil fuel generating capacity was needed to support a 0.88% increase in renewable capacity. She also cited NYISO’s controversial prediction that full implementation of the state Clean Energy Standard will require increasing the installed reserve margin to at least 40% from the current 17.5%.
And renewables are not well suited to provide ancillary services such as voltage support, regulation and frequency control, operating reserves and black start, currently provided by gas-fired generation, she said.
Anne Reynolds, executive director of the Alliance for Clean Energy New York, agreed that gas will have a role. Jackson Morris, Eastern energy director for the Natural Resources Defense Council, said that role could persist even through midcentury under the state’s plan to reduce greenhouse gas emissions by 80% by 2050.
Stranded Assets?
But Morris said policymakers must beware of overinvesting in gas infrastructure that could become stranded assets.
“What’s going to happen is if we’re not careful — if we’re building out 40- to 50-year infrastructure, whether its pipelines or combined cycle plants — we could easily be either running into a brick wall and not meeting the necessary climate trajectory we need to be on, or alternatively … you could end up with a ton of sunk costs.
“If you don’t have that time horizon right, if you don’t build out a regulatory framework that has the right foresight, you could literally be on a path that looks really promising and run square into a giant brick wall when you get to 2030.”
Need for Storage
Moreau acknowledged that gas’s future is tied to the cost curve for energy storage. If storage gets cheap enough, it could compete particularly with simple cycle gas peaking plants, some say.
New York’s climate goals also will require as much as 4 GW of energy storage by 2030, said Denise Sheehan, senior advisor to the New York Battery and Energy Storage Technology Consortium. The group is proposing a “no regrets” target of 1 GW of multihour storage by 2022 and 2 GW by 2025.
“These projects are happening. They’re real,” she said.
Offshore Wind Essential to 2030 Target
While conceding a continuing need for gas, Morris and Reynolds were far more bullish on the role offshore wind will play in New York’s future.
“You cannot get to 50% [renewables] by 2030 without offshore wind. Period,” Morris said. “If we lay the groundwork right now [for] 2030, could we have potentially thousands of megawatts of over 50%-capacity-factor, carbon-free resources located close to the highest load pockets in the state? We absolutely could. There’s no question.”
Levelized costs for offshore wind in Europe have dropped 50% in the last seven years, with recent projects coming in below 8.5 cents/kWh, Morris said. A June 2016 paper by the National Renewable Energy Laboratory and Lawrence Berkeley National Laboratory forecast that offshore wind costs will drop as much as 30% more by 2030.
But that assumes a pipeline of projects, according to Reynolds, who said that “critical mass” could be reached by developments in New York, Massachusetts, New Jersey and Maryland.
Offshore wind, common in Europe, has been slow to gain a foothold in the U.S. The Cape Wind project in Massachusetts, which advertised itself as the first offshore project in the U.S., has stalled following years of litigation, local opposition and legislative battles.
But the potential — particularly in the shallow waters of the Atlantic coast — is compelling and advances have begun occurring at a faster pace.
The U.S. Bureau of Ocean Energy Management has awarded 11 commercial offshore wind leases, including two sites each off New Jersey, Maryland and Massachusetts, one off Virginia and two off the Rhode Island-Massachusetts border.
In June, BOEM identified New York’s first “wind energy area,” 12 miles off Long Island. BOEM is expected to auction off development rights in December.
Construction of the nation’s first offshore commercial wind farm, off Block Island, R.I., was completed in August and is expected to begin operations by the end of 2016.
Earlier this month, the U.S. departments of Energy and the Interior released their second National Offshore Wind Strategy.
On Sept. 12, Reynolds’ group, which represents wind and solar developers, announced a spinoff organization, the New York Offshore Wind Alliance.
And on Thursday, New York Gov. Andrew Cuomo and the New York State Energy Research and Development Authority released an offshore wind blueprint outlining the state’s plan to identify the most promising wind development sites within a 16,740-square-mile area.
Meanwhile, the Long Island Power Authority could vote as soon as Wednesday to authorize a 90-MW offshore project 30 miles northeast of Montauk.
Morris said he was undaunted by the fate of Cape Wind. “You had technology in a different place. You had public policy in a different place,” he said. “We’ve learned a lot from Cape Wind.”
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