ALBANY, N.Y. — Amid all the talk of electrons and dollars thrown around at the New York Energy Summit, the old chicken and egg metaphor popped up several times during the three-day event on April 4-6.

The state’s lofty climate goals are balanced by the need for the electricity fossil fuel produces, and there are multiple obstacles to replacing fossil fuel with new clean energy.

Chris Stolicky, chief of gas system planning and reliability at the New York Department of Public Service, said rapidly approaching statutory emissions reduction requirements are running into the realistic need to maintain “peaking assets to offset reduced capacity.”

A chicken and egg proposition, in other words.

Panelists applauded New York for modernizing its grid but worried that attempts to decarbonize too quickly without boosting clean energy generation threaten the state’s ability to both reliably keep the lights on and achieve its goals.

Goals vs. Needs 

New York’s conundrum is how to ensure grid reliability and resilience as it calls for fossil fuel resources to be replaced by intermittent resources.

The state must “fill in the gaps for when the sun goes down or the wind breaks,” said Dr. Ingo Stuckman, founder of the Zero Emission think tank, who moderated the summit’s Alignment of Wholesale Markets with Decarbonization Goal panel.

“We have to make sure we have a market that covers the needed resources to maintain a significant amount of supply to meet extreme conditions,” said Mike DeSocio, director of market design at NYISO. But he added that the “outlook is delicate.”

“There are plenty of projects in the pipeline; the issue is we need some projects to be commercial, and that we have not seen yet,” DeSocio said, referring to the ongoing backlog of projects in NYISO’s interconnection queue. (See NYISO Previews Plan to Expedite Interconnection Queue.)

Rachel Goldwasser, general counsel and vice president at Key Capture Energy, contended that energy storage resources could solve many of these problems, but “making sure [storage resources] can be interconnected and that the market signals work … has taken longer than expected.”

DeSocio agreed that storage resources potentially present an elegant solution, but “the jury is still out.”

“We need to make sure that all the pieces are moving together on the chess board,” he said, referring to how one project’s delay in the interconnection queue can impact the timing or viability of another.

NYISO “would love to add storage” he added, but “we want to be careful not to add it too quickly because we don’t have the renewable resources yet to charge storage en masse.”

He also flagged the short duration of most current storage technology: “We haven’t seen storage in the queue that can be expected to run for 10, 12 or 14 hours,” which is the current level of support needed during a grid emergency.

In response to DeSocio’s comments, Goldwasser said, “There’s going to be a transition period where we’re going to be uncomfortable,” and if stakeholders do not address these problems, then “we’ll be in a position where we’re contracting with fossil plants to stay online.”

Cue the Queue

New York’s ability to rapidly integrate emissions-free resources has been hampered by ongoing problems with NYISO’s interconnection queue, which has been pushed to the limit since the state’s Climate Leadership and Community Protection Act (CLCPA) passed in 2019.

The increasing amount of time spent moving through the interconnection queue is the “elephant in the room,” said Jessica Stromback, CEO of Joule Assets and moderator of the Distributed Generation Update: What’s Next for C&I, Community, and Residential Solar Markets panel.

“We’ve grabbed the low-hanging fruit,” said Andrew Bernstein, managing partner at Kearsarge Energy, referring to residential solar projects requiring little permitting or study. “Now the question is how to get commercial and industrial projects interconnected.”

There are “tons [of projects] in queue right now. … The question is how do we reduce costs,” he said.

Daniela Pangallo, director at Nautilus Solar (NYSE: NLS), said interconnection costs are multiplied first by inflation and then by the amount of time the process takes to complete, causing some projects to exit the queue entirely.

Joe White, distributed generation ombudsman with Consolidated Edison Company of New York (NYSE: ED), said in response to these growing challenges state agencies and utilities have increasingly integrated stakeholders into these studies to identify “things that are great about the interconnection process … and what items need improvement.”

“We take that feedback and look at any software enhancements, training and opportunities to reinvent the interconnection process, and we put those into motion,” he added.

But more needs to be done to prepare for the future.

This was a key focus during the Utility Grid Modernization & Resiliency Planning panel, which discussed the growing threat climate change poses to grid operations.

Referring to New York’s transformer shortage, Ryan G. Hawthorne, vice president with Central Hudson Gas & Electric (NYSE: CHG), said the state has a “chicken and egg problem.” Do developers push new projects through NYISO’s queue, which risks costs rising, or invest in aging assets to make them more resilient, which may not necessarily be the best long-term solution but offers a more predictable outcome?

What is a certain, he said, is that to ensure future reliability and resilience “we need [investments] in our system to be able to address more frequent and impactful [extreme weather events].”

“We’re entering a period of a lot of uncertainty related to project development,” said Kyle Collins, director of business development at Hydro-Quebec US, where interconnection concerns and questions about renewables’ ability to meet future peak loads has forced generators to “leverage as much as [they] can out of the existing system.”

Challenges In Focus

New York’s obstacles to decarbonization came into sharper focus during both the Building Electrification/Decarbonization and Transportation Decarbonization Standards, Models & Incentives panels.

In the building discussion, moderated by RTO Insider Editor Rich Heidorn Jr., panelists identified how legal mandates and policies, such as the Local Law 97 or the CLCPA, have pressured developers to decarbonize a sector of society that accounts for 30% of New York’s emissions without impacting consumers. (See NYC Proposes Rules to Implement Building Emissions Law.)

Modernizing New York City’s building stock to these new net-zero requirements will be particularly difficult.

These laws “created some challenges” and forced developers “to think very carefully about anything [they] deliver,” said Michael Daschle, senior vice president of sustainability at Brookfield Properties.

Namely, should developers and building owners invest now to upgrade their buildings to comply with new net-zero energy requirements or suffer financial penalties for not decarbonizing that might be less economically painful in the near-term?

Daschle explained that developers are increasingly concerned about whether all-electric homes will “actually be marketable” because they will “require more equipment … and are significantly more expensive.” 

Additionally, much of the state’s building stock is old, noted Samantha Pearce, vice president and director of sustainability at New York State Homes and Community Renewal, the state’s affordable housing agency. Electrifying them with new technologies, such as heat pumps, is not only expensive but requires a lot of space, she said.

“We now have to accommodate larger mechanical room spaces,” and in some residential buildings this has created economic “domino effects” that place new “limitations and considerations” into affordable housing decisions, Pearce said.

Similarly, Dawn Fenton, vice president at Volvo Group North America, said the transportation sector is undergoing a “paradigm shift” and needs to move “beyond the pronouncements and lofty goals. … Yet there’s not been a realization of what are the challenges behind [a net-zero future] and that it is not as easy as mandating it as so and it will be so.”

She added, “I think people are starting to recognize the challenges of charging infrastructure or the challenges of permitting reform and all the work that needs to be done to actually realize [the state’s] goals.” 

Kara Podkaminer, senior adviser for sustainable transportation at the U.S. Department of Energy, said “there is a misalignment in planning timelines, where in six months you can get an electric vehicle, … but the timeline to get the charging infrastructure or upgrades can be more like a decade.”

Fenton and Podkaminer agreed that consumer education and awareness is the biggest “nut left to crack,” as many people remain skeptical about how decarbonization will impact them, either from an economic, social or environmental perspective. 

They also agreed that informed consumers help guide decision-makers to where the needs are greatest.

We need to “come up with a plan together that meets all of our needs in a way that is more streamlined … and produces less uncertainty” Podkaminer said.

“This is a difficult transition for everybody,” Fenton said, but if New York does not address these unresolved issues and “make it as easy as possible for everybody to take part of this transition” then the state will struggle to reach net-zero.

Hawthorne summarized New York’s chicken and egg problem using an example drawn from the transportation sector, but which could be applied to every sector needing to be decarbonized: Do you “want electric vehicles first or their charging stations?”