New York City has a number of operational peaker plans, and if you translate the capacity payments to kWh payments, it comes out to over $2.50 per kWh. For comparison, wholesale power prices for electricity are $0.02 per kWh. These peaker plants not only come at a huge cost to the ratepayers (that’s us, the retail buyers of power) but also come with horrible environmental issues.
Check out some great content from the Young Professionals in Energy summary regarding NYC Peaker Plants and Clean Energy Alternatives:
Clean Energy Alternatives
- Examples of clean energy replacing peakers:
- 2019, Ulster, NY: 20MW battery replaces gas peaker, funded by NYSERDA
- 2019, NYC: NY PSC approved 316MW battery at Ravenswood (not yet approved locally)
- 2019, Oakland, CA: East Bay Community Energy replaced peaker with 20MW battery + 500kW of solar+storage
- 2018: Nevada: NV PUC approved 401MW solar + 100MW storage project
- 2018: California PG&E entered long-term contract for 567MW storage to replace three gas peaker plants.
- Benefits of energy storage
- Resiliency: provide backup power in times of emergency, especially for communities vulnerable to impacts of climate change.
- Sustainability: report estimated that adding 1500MW of energy storage statewide would avoid one million tons of CO2 emissions.
- Affordability: Would reduce costs for ratepayers and mitigate the energy cost burden.
- Today, over 600,000 families in NYC pay more than 6% of annual household income on energy bills and are therefore considered by NYS to be “energy cost burdened.”
Solutions: Investing Locally
- The report argues that the billions of dollars of ratepayer funds currently going to capacity payments could instead be used to invest locally in publicly- and community-owned distributed renewables and energy storage alternatives.
- Renewable Rikers idea: repurposing just 35 acres of land on Rikers could provide 14.6MW of solar and 380MW storage.
Emissions and health
- What are the health consequences of running peakers? Which communities shoulder the burden of peaker plant pollution?
- What are the health consequences of blackouts?
- Does the need for reliability justify the health costs of peakers? Who has “the right” to answer that question?
Capacity markets and reliability
- What is the role of peaker plants in keeping the lights on in NYC?
- Can renewables provide reliable electricity in times of high demand?
- Batteries have limitation on delivering power indefinitely, longer-duration options are rare at commercial scale
- What is the purpose of the NYISO capacity market? Is it achieving the intended result?
Looking toward solutions
- At what point in the clean energy transition should peaker plants be retired, and what should that process look like?
- What is the scale of renewables + storage that would be needed to replace peakers? Where would those new projects be sited? (Front of meter utility scale? Behind the meter building level?)
- How could you envision redesigning capacity markets in a way that prioritizes both reliability and clean energy?
- What are some ways to incentive reduced grid demand to prevent peakers being turned on in the first place? Load shedding/ demand response? Daylighting hours? Energy efficient cooling systems?
- Can utility companies implement a more effective demand pricing structure to de-incentive electricity consumption on peak days?
If you want to support clean energy for New York, and save money while doing so, get in touch with YSG Solar today. Send us an email, or call at 212.389.9215 and we will identify the ideal solar project for your unique energy needs—residential, commercial, or community.
YSG Solar is a project development vehicle responsible for commoditizing energy infrastructure projects. We work with long-term owners and operators to provide clean energy assets with stable, predictable cash flows. YSG's market focus is distributed generation and utility-scale projects located within North America.
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