In The News
By Marie French
Renewable energy developers and existing power plant owners are pushing a proposal to price carbon in the state’s electricity markets. Although some residual funds might flow to utilities and ultimately electricity customers or programs from that proposal, the main goal is to send location-based market signals for where renewable power should be built and more efficiently support the state’s goal of 70 percent renewable electricity by 2030.
The proposal is on ice at the New York Independent System Operator until the Cuomo administration gives its blessing. Officials have been mum on that point.
It would work by charging fossil fuel plants for their emissions at a price set by the state.
Those plants would then bid into the energy market to account for that charge, raising the price of electricity that gets paid to all resources in the region if emitting plants are needed to meet demand. The increased costs of electricity for consumers is projected to be minimal. Newer and more efficient gas plants could benefit as well as hydroelectric, solar and wind resources who get the higher price and don’t pay as much (or anything) for their emissions.
The proposal faces some concerns from consumer groups, particularly downstate where more fossil fuel plants are relied on for power, and environmental groups, which see state subsidies for new renewables as a more viable path to achieving the goals.
For some, including the heat pump industry and those focused on electrifying vehicles, pricing carbon in the electric sector risks making the transition off fossil fuels in other parts of the economy more difficult by potentially raising prices.
On the flip side, pricing carbon — or other planet-warming emissions — across the economy on a single-state basis would be complex and take longer than the ready-to-go NYISO proposal.
“We think the state is missing the solution right in front of their face. They keep overlooking carbon pricing as a way to achieve many of the goals they’ve laid out,” said Gavin Donohue, president and CEO of Independent Power Producers of New York.
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