New York grid operator sees generating margins shrinking, increased reliability risks
Energize Weekly, June 22, 2022
The buffer of extra generating capacity – the reserve or reliability margin – is shrinking in New York State as fossil-fuel plants retire faster than renewable sources are being added, according to an assessment by the state’s grid operator.
While the margins are adequate for this summer, the New York State Independent System Operator (NYISO) in its annual report projects them shrinking by 2024, even moving into a deficit during extreme temperature days.
“We’re taking on a little bit more risk,” Richard Dewey, NYISO President and CEO, said in a call with reporters to discuss the annual report.
NYISO warned that the rate of fossil plant retirements must not exceed the pace of development and deployment of new clean electricity generation.
“Additional generation deactivations, delays in transmission upgrades, and extreme weather threaten grid resilience and present risks to meeting New York’s reliability requirements,” the report said.
The retirement of fossil units, primarily coal-fired plants, is being spurred by concerns about air pollution. The report noted other areas have also seen a generation crunch in the transition.
“As we have seen in California and Texas, operating a reliable electric grid requires a flexible and well-planned transition to the grid of the future,” the report said.
On June 2, the state announced the award of 22 large-scale solar projects with nearly 1.6 gigawatts (GW) of capacity. The state also as five offshore wind projects with 4.3 GW of capacity under development.
The key factors driving the increased risk in the system are:
- Shrinking reliability margins across the New York grid as resource retirements outpace new additions
- Potential resource deficiencies if additional New York power plants become unavailable or consumption is greater than forecasted
- Timely completion of planned transmission projects. If projects are delayed for any reason, the grid’s ability to reliably serve customers could be jeopardized
- Extreme weather events, such as heat waves or storms, could result in deficiencies to service demand statewide, especially in New York City. This outlook could improve as more resources and transmission are added to New York City
For the 2022-23 year, beginning May 1, 2022, the New York grid will have a reliability margin of 19.6 percent. over projected peak demand with 37,991 megawatts of generation capacity. That is down from a margin of 20.7 percent the previous year.
The margin will likely increase with the addition of new wind and solar projects, the report said, but by 2024 the grid will face big challenges in instances where summer temperatures climb above 95 degrees Fahrenheit.
“Heatwave conditions combined with the impact of additional forced generation outages would result in deficiencies to serve demand in New York City in many of the years studied,” the report said.
“A heatwave with a statewide average maximum temperature of 95 degrees Fahrenheit may result in very thin margins in 2023 and significant deficiencies beginning in 2025, while an extreme 98 degrees Fahrenheit sustained heatwave would test the system limits today and exceed grid capabilities beginning in 2023.”
One of the grid challenges is a mismatch in resources and demand between upstate and downstate New York.
Most of the new renewable generation is being built in the upstate New York, while the major demand is in the downstate areas focused on the New York City metropolitan area. Upstate is getting 92 percent of its electricity for zero-emission sources, while downstate still relies on fossil generation for 89 percent of its electricity, according to the report.
“Transmission constraints limit access to clean energy technologies located in upstate New York from serving downstate New York, where most of the electricity demand is located,” the report said. “New transmission capability is under construction and will alleviate some constraints on today’s system, increasing the flow of emissions-free electricity.”
New York State has agreements with developers to build two new transmission projects. The $484 million Smart Path Project will run 200 miles from the North Country to the New York metropolitan area to “unbottle” existing renewable energy resources.
The $181 million Western NY Transmission project will upgrade existing lines and help deliver hydropower across Western New York.
“It will be several years before these projects will be completed,” the NYISO report said.
The two projects are part of a 12-year, $726 million plan to upgrade the state’s grid. The concern, however, is the events and demand will outpace the transition to renewable generation and an upgraded grid.