NYISO’s Grid Reliability Need Finding: A Harbinger of Opportunity to Come in New York

On July 14, 2023, the New York Independent System Operator (NYISO) identified a grid reliability need in New York City of 446 megawatts (MW) beginning in the summer of 2025. If the City experiences a 98-degree heatwave that summer, the need could be as high as 555 MW. To prevent blackouts in the Big Apple, NYISO will solicit near-term, market-based solutions “which may include generation, storage, and/or new participation in programs that act to reduce demand on the grid.” If no timely solution is found, then in-City natural gas peaker plants that were slated to shut down in 2025 when a new air pollution regulation goes into effect may have to stay operating to keep the City’s lights on.

Delaying peaker plant retirements would be a setback for New York’s environmental goals, but this report also signals more shortfalls may be coming down the line.

NYISO expects that the Champlain Power Hudson Express (CHPE) – a 1,250 MW transmission line connecting Hydro Quebec to New York City – will improve the transmission security margin in the spring of 2026, when it is scheduled to come online. A delay in that project’s commercial operation date, however, could extend the NYC reliability need beyond 2026. Even with CHPE complete, “the margin gradually erodes” after 2026 and under a high-demand scenario results in a deficiency of 88 MW by 2032 and 268 MW by 2033.

Though the near-term reliability need is only for the City, NYISO also expects statewide transmission and reliability system concerns will arise during this same time period. The addition of certain high load centers in western and central New York, like the Micron New York semiconductor manufacturing facility, are contributing to a statewide reliability need of 145 MW in 2025, and 104 MW in 2033.

Apart from a CHPE delay, there are other factors that could stress the grid beyond its current capabilities. Over the next ten years, NYISO notes that additional power plants becoming unavailable or electricity demand exceeding current forecasts also could trigger a reliability concern.

With respect to the latter, beneficial electrification of the transportation and building sectors is expected to significantly increase electricity demand in the City and state. The Climate Leadership and Community Protection Act requires a 40% reduction in statewide greenhouse gas emissions by 2030 and an 85% reduction by 2040. As noted in the New York Climate Action Council’s Final Scoping Plan, “Even with aggressively managed load, electric consumption doubles and peak load nearly doubles by 2050, and New York becomes a winter peaking system by 2035.” Here, the NYISO does not expect CHPE to provide capacity in the winter, presenting additional challenges in the early 2030s.

Key Takeaways from the NYISO Report:

  • New York’s decarbonization goals are inextricably tied to its grid reliability and the State cannot achieve the former without ensuring the latter.
  • The fundamental forces of beneficial electrification, fossil-fueled power plant retirements, and transmission constraints will continue to drive demand in New York for grid-based solutions. Developers of long duration energy storage, transmission, demand response, and firm generation resources should take note.
  • Over the next ten years, as the unstoppable force of New York’s climate goals meets the immovable object of New York City’s grid limitations, large dispatchable projects will need to be developed on accelerated timelines throughout the state. The 446 MW near-term reliability need identified by NYISO this month is case-in-point. If a solution can be built in the next two years to meet this need (an unlikely event given the long development timelines of most transmission, energy storage and generation projects), it will now have a clear pathway to NYISO funding. The opportunity was not available mere weeks ago.
  • A third high voltage transmission line connecting dispatchable, renewable resource portfolios into the City – in addition to CHPE and the Clean Path NY project – will be needed to meet the ever growing demand associated with the transition to a high demand, electricity-based economy. Other factors such as higher temperatures or project delays could exacerbate the expected grid reliability need over the next decade.
  • Demand for energy storage – including long-duration – in or with transmission paths into NYC shows no sign of abating over the next ten years.

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