Commentary on the New York State Energy Plan "Potentials Study"

Prepared for Alliance for a Green Economy by Jessica Azulay, Program Director

The “Energy Efficiency and Renewable Energy Potential Study of New York State” is not (contrary to its name) designed to provide a straightforward accounting or inventory of the available renewable energy and energy efficiency resources in New York. Such a state-sponsored analysis would have been incredibly helpful to New Yorkers who are wondering if and how we can transition to an environmentally sustainable energy system. Such a study would seem to be a key prerequisite in a planning process to help New Yorker’s conserve energy and develop our renewable energy resources. It would have been invaluable to advocates and policy-makers at every level working toward the state’s greenhouse-gas emissions goals.

Unfortunately, the “Potentials Study,” as it has come to be known, does not include this basic information. Instead, this study attempts to quantify the “potential for increased adoption of energy efficiency and renewable energy technologies in New York State” [emphasis added]. This study is not really about technical feasibility or available resources; it is a prediction of societal, political and economic behavior.

Calling an attempted prediction of human behavior a “potential study” is misleading, particularly given the context of this study within the New York State Energy Plan. The Energy Plan sets a goal of 80% greenhouse-gas reductions by 2050. One could reasonably expect that a logical next step would be for the energy planners to perform an analysis of all available emission-reduction resources (conservation, efficiency and renewable energy) in order to determine whether the state has the potential to meet the state’s greenhouse-gas reduction goals. Assuming the potential exists, a next step would be to determine what policies and activities are necessary to best capture that potential.

While there is a wealth of information and analysis included in this study, its structure and assumptions are counterintuitive to a comprehensive planning process. It starts with a set of assumptions about policies, energy markets, and infrastructure, and attempts to predict how energy consumers and producers will behave within that assumed context. What it finds, predictably, is that if we follow the policy, market, and infrastructure path assumed in the study (which is largely based on the status quo with some improvements in subsidies and outreach), New York is unlikely to meet its climate goals.

These results could be quite demoralizing to anyone who believes the study is about the state’s actual potential for energy efficiency and renewable energy resources. Instead of being demoralized, we should see these conclusions for what they really say: that if we wish to capture New York’s true energy efficiency and renewable energy potential (which is only hinted at in the “potentials study”), we need a fundamental shift in the state’s energy policy, energy markets, and energy infrastructure. The good news is that policy, markets and infrastructure are not givens to be assumed. They are changeable and changing.

Even as it went to print, the study’s assumptions were already being upended by New York’s historic utility reform process. If that process delivers what it promises, state policy to drive system changes and efficiency and renewable development could far surpass the improvements in subsidies discussed in the “potentials study.”

Thus, the conclusions of the “potentials study” are already out of date and will become increasingly obsolete. Another challenge to the ongoing usefulness of this study is that its main conclusions are based on a set of assumptions related to the price of energy, which is historically volatile. A change in energy prices will render the analyses of economic potential useless.
The study also makes unjustifiable assumptions about electricity infrastructure and even the nature of electricity usage. For instance, the study states that “dramatically increasing the amount of intermittent solar energy supplied to the electric system requires additional investment in controls and storage.” The study points to a recent NREL analysis that showed the U.S. grid could accommodate solar generation equal to 27% annual energy consumption. The study authors noted that the NREL analysis did not rule out the possibility of higher levels of solar saturation. Yet the “potentials study” places an upper limit on solar potential in New York at 27% of total electricity generation, totally ignoring NREL’s qualification and also ignoring the possibility of changes in controls and storage in our energy system. There seems to be no true technical basis for placing this hard upper limit.

Even if 27% were a real upper limit for the amount of solar the grid could handle, the study authors should have modeled the conversion of transportation and space heating to the electric system, which would raise total electric demand, thereby raising the amount of solar that could be accommodated. The conversion of transportation and heating to renewable electricity sources is a fundamental piece of a renewable energy transition that should be modeled in all studies related to the state’s greenhouse-gas reduction goals. Yet neither were considered in the “potentials study.” In fact energy used for transportation was left out of the study completely, an omission of almost 30% of the state’s energy consumption.

In its defense, the “potentials study” does contain incredibly detailed information about available technologies, and it projects technological development timelines and adoption rates. Anyone studying how to achieve an efficient and renewable energy system would no doubt find a lot of the analysis in the study very useful, even if they were to disagree with some of the methodologies used. Its value would increase dramatically if the model could be used to test alternative economic and policy possibilities.

New York planners should not take the conclusions from the study as an upper limit on what is possible. This is especially important as New York is considering changes to its Renewable Portfolio Standard and Energy Efficiency Portfolio Standard.

Instead of a study to show what is possible, this study should be seen as a cautionary tale for how we will fall short of our goals if we do not redesign our policies, energy markets, and energy infrastructure with an eye toward capturing New York’s incredible renewable and efficiency resources. But we already knew that.