State says no to natural gas

By Tim Knauss

Syracuse.com

After losing a five-year battle with state officials, the owners of an aging Hudson Valley power plant finally gave up last year on their plans to modernize the facility.

The Department of Environmental Conservation won a protracted legal battle with Danskammer Energy, blocking the company from investing $500 million to replace the 70-year-old boilers at its power plant with cleaner-burning, state-of-the-art equipment.

Even though the project would have improved the plant’s air emissions, the DEC refused to issue a permit because of a 2019 state law that aims to eliminate all greenhouse gas emissions from the electric grid by 2040.

Two other aging power plants had similar projects squelched by the DEC.

But now the experts who run New York’s electric system say projects like Danskammer are exactly what the state’s power grid requires – urgently.

The state needs more generation, and renovating existing natural gas-fired plants is a quick and efficient way to add power, according to the New York Independent System Operator.

NYISO also suggested the state look at building new gas-fired plants.

One could forgive the folks at Danskammer for rolling their eyes.

The disconnect between DEC rejections and NYISO forecasts points to a difficult reckoning ahead for policymakers: Should New York add renovated or new natural gas-fired power plants to the system in spite of its commitment to a zero-emission power grid?

So far, state officials are tiptoeing around that question.

New York’s climate goals call for massive additions of clean, renewable wind and solar power. But the pace of development has been sluggish.

Even if all the renewable energy comes online, NYISO has warned for years that there is a missing link in the plan to reach zero greenhouse gas emissions. To balance out intermittent generation from wind and solar farms, the state must develop a clean source of power that can be dispatched at will, regardless of whether the wind is blowing or the sun is shining.

That’s a role currently played by natural gas plants.

Now that Micron Technology and other planned developments are poised to send demand zooming, some experts say it’s critical to reconsider bringing new natural gas generation into the electric system.

“It’s just time to rethink,” said Cornell University Professor Lindsay Anderson, who chairs the Department of Biological and Environmental Engineering. “The question for me is, how are they going to work with these (gas-fired) generators to make them less intense emitters?”

NYISO is a nonprofit organization that runs the state’s wholesale power market and manages the minute-by-minute transmission of electricity around the state. The organization does not set energy policy but provides detailed forecasts to help plan improvements to the grid.

Looking out at the coming two decades, here’s what NYISO sees: Demand for power will surge 50% to 90%, requiring more generating capacity than we have now. And there is a special need for electricity that can be dispatched on demand.

In its annual “Power Trends” report, issued last month, NYISO said New York should facilitate the renovation of old, inefficient power plants, whether or not they burn fossil fuels. Those renovations, also called “repowering,’’ often amount to installing all-new equipment in the shell of an old plant, increasing its output and efficiency.

NYISO also suggested it would be a good idea to site some brand-new “conventional” – that is, gas-burning – power plants.

“Every plausible option … should be on the table,’’ wrote Rich Dewey, president and CEO.

‘We know it exists’

Natural gas is a tricky issue for New York.

State law passed in 2019 requires the electric system to be “zero-emission” by 2040 to help slow the calamitous effects of climate change. Guided by that goal, state agencies have discouraged fossil fuel companies from investing in new capacity.

Unless state officials signal a change in their approach, the companies that invest in natural gas plants will stay away, industry representatives say. There are plenty of opportunities in other states.

That signal has not come.

By contrast, Gov. Kathy Hochul over the past year has come to embrace nuclear power as an answer to future power needs. Hochul last month ordered the state power authority to build a new nuclear plant. Nuclear produces little or no greenhouse gas.

But building a nuclear plant could take a decade or more.

When asked whether the governor would consider repowering fossil fuel power plants, or building new ones, her office dodged the question.

“She will use every tool at her disposal’’ to keep the lights on and the costs low, spokesman Paul DeMichele wrote in an email. He specifically mentioned her efforts to develop new renewable and nuclear power.

Would “every tool at her disposal” include natural gas?

No response.

It currently takes five to seven years to develop a new natural gas plant, said Kevin Lanahan, a vice president at NYISO. Decisions must be made soon, he said, because the state will need more electricity that can be dispatched night or day.

The state can’t afford to do nothing while waiting for emission-free dispatchable power sources to be identified, he said.

“It certainly means taking a look at the aging fossil-based plants on the system to examine the opportunity of retrofitting (them) with cleaner, more efficient and increased-capacity gas technology that is out there,’’ Lanahan said. “It’s market-based. We know it exists.”

‘Build the alternatives’

Natural gas plants (including those that can burn gas or oil) currently provide about half of New York’s electricity. The state’s climate plan assumes that those plants will retire in years to come, or in some cases convert to a carbon-free fuel like hydrogen.

Many supporters of New York’s aggressive climate goals are adamant that new fossil fuel generation should not be part of the solution to reliability issues on the grid. Falling back into reliance on existing technologies like fossil fuel generation saps money and attention away from technologies like battery storage that are fast emerging as at least partial solutions.

Jessica Azulay, executive director of Alliance for a Green Economy, said New York should push ahead with a combination of energy efficiency measures, demand response programs and innovative technology to address reliability challenges on the grid. Without bold leadership, she said, it’s too easy to give in to half-measures.

“Ultimately it comes down to, will New York put the resources and the policies behind the alternatives’’ to natural gas? she said. “Because if we don’t build the alternatives, then the fossil fuel industry obviously can say, well, ‘You need us.’ “

But some critics of New York’s approach say that, in its quest for a greener electric grid, New York has let the perfect become the enemy of the good.

Rather than allow aging natural gas-burning plants to repower with more efficient equipment, the DEC has denied air permits to prevent the projects from going forward. As a result, grid operators continue to call upon older, more polluting power plants during times of high demand

Danskammer officials argued that replacing the plant’s old boilers with a high-efficiency combined cycle system – which recycles its own waste heat to make extra power – the plant would reduce its carbon dioxide emission rate by 40% and cut smog-inducing nitrogen oxide emissions by 90%.

Environmental groups cheered a double-victory in October 2021 when DEC officials announced they had denied air permits to Danskammer and to Astoria Gas Turbine Power, a decrepit power plant in Queens that sought to repower. In both cases, DEC officials said the projects would “interfere with the statewide greenhouse gas emissions limits’’ set by the 2019 climate law.

Danskammer sued and lost in court. The plant rarely runs these days, only during periods of unusually high demand.

Astoria shut down and was demolished.

In 2022, DEC cited the same reason for denying a permit renewal to Greenidge Generation, a power plant on the west shore of Seneca Lake that supplies energy mainly for Bitcoin mining. Greenidge sued, and a court required the DEC to provide a deeper analysis to justify its decision. Greenidge continues to operate while the DEC reconsiders its permit renewal.

Should it be ‘all or nothing’?

As more and more renewable energy comes onto the system, the least efficient fossil fuel generating plants will retire, experts say. But the growth of renewable energy must be matched by the development of dispatchable power sources that can fire up as needed.

At this point, NYISO officials say, there is no commercially available alternative to natural gas for that purpose, at lease not at the scale required.

Anderson, the Cornell professor, has studied the need for dispatchable power in a simulated New York electric system dominated by renewable energy. She said state officials should start to evaluate how much – or how little — natural gas generation they need to keep the system reliable until some emission-free alternative emerges.

Otherwise, the state will be delayed in its efforts to replace the worst-polluting power plants with renewable energy, she said.

“Hopefully we can get away from the all-or-nothing,’’ she said. “Because I think that really slows us down. And we’ve got to start moving, right?”

The role natural gas plays in the system becomes especially evident during periods of peak demand.

On June 30, for example, temperatures across the state climbed to 90 degrees with high humidity. As air conditioners kicked on in the late afternoon, demand for electricity soared and grid operators called up 23,000 megawatts worth of in-state generation – far from a record, but 70% higher than early that morning.

Natural gas-fired plants provided most of the increased juice. Power plants that run on gas, or that can burn either gas or oil, accounted for more than 15,000 megawatts at the peak. Wind and utility-scale solar, by comparison, provided less than 700 megawatts.

(Nuclear, meanwhile, just kept on humming. As they do most days, the state’s four nuclear reactors churned out a steady 3,300 megawatts throughout the 24-hour period, regardless of swings in demand.)

Waiting for a signal

Many other states are developing new natural gas power plants without hesitation.

In Pennsylvania, for example, investors are developing the country’s largest natural gas-burning power plant – a monster that will churn out 4,500 megawatts, 30% more than New York’s four nuclear plants combined – on the site of a shuttered coal-burning plant.

Because of the nationwide rush to build, there are long delays in getting materials. It can take seven years to get the turbines for a gas plant, said Gavin J. Donohue, CEO of the trade group Independent Power Producers of New York.

That’s part of why NYISO is urging state leaders to encourage developers to start planning repowering projects or new construction now, Lanahan said.

“We need to start considering investing in new generation at a greater clip now, to accommodate those long lead times,’’ he said.

But before any generating companies commit to developing or repowering natural gas plants in New York, they will wait for a signal from policymakers that there is a good chance for approval, Donohue said.

“They’re certainly going to want to see a message from the Department of Environmental Conservation that they will be able to get their air and water permits before they commit to investing,’’ he said.

And what does the DEC say about that? Has the agency changed its criteria for evaluating repowering projects?

A DEC spokesperson sent syracuse.com a noncommittal response.

“Grid reliability remains crucial, and the State is committed to the continued provision of safe, adequate, and reliable service to customers statewide,’’ agency officials said in a prepared statement. “DEC subjects every application to a rigorous review of all applicable federal and state standards.”

If the mood in New York changes, Danskammer Energy might consider pulling its repowering project out of mothballs, said Tom Gray, CEO.

“While Danskammer formally withdrew its appeal due to a lengthy and challenging permitting process, we maintain that the proposal remains relevant to both New York’s long-term energy needs and environmental goals,’’ Gray said. “Should political and regulatory conditions shift, we stand ready to reevaluate the project.”