New York and energy efficiency

Summary: The seventh-largest energy consumer, New York is also the most energy-efficient state per person.

From the installment of the world’s first central generating plant in New York City in 1882 and the very early distribution of large-scale electric power to the city of Buffalo, New York is a pioneer in the history of civil use of energy. The New York energy system has evolved over the past several decades in response to a broad set of circumstances: diverse federal policies and regulations, growing demand for energy, evolution of the national and global energy market, and climate change. Energy efficiency and renewable energy have increasingly become the central concern in energy planning and implementation in New York. Accounting for 5.8 percent of the nation’s population in 2023, New York produced 512 trillion British thermal units (Btu) of the nation’s total energy in 2022. It is among the most energy-efficient states in the United States per person, although this is largely because of the significant decline in the state’s industrial sector.

For decades, New York relied on the burning of fossil fuels to meet most of its energy demand. From 1995 to 2009, New York’s consumption of coal decreased 40 percent, and nuclear energy and net electricity import increased 65 percent and 113 percent, respectively. However, by 2020, the state had phased out all of its coal-powered coal-fired electricity plants. As of 2023, the residential and commercial energy demand in New York accounted for about 60 percent of total energy demand. Another big portion of energy demand was from transportation (about 30 percent). Industrial energy use accounted for only 10 percent.

Since the 1970s, New York has adapted its governance structure, issued new laws, developed new energy plans, and formulated new initiatives in response to global, national, and local challenges. In 1975, the New York State Legislature established the New York State Energy Research and Development Authority (NYSERDA), a public benefit corporation, to promote energy innovation that would improve both the economy and the environment. Under the New York Energy Law adopted in 1976, the chief regulator for the Energy Law is the commissioner, or president, of the NYSERDA. Beginning in 1999, the New York Independent System Operator (NYISO) has operated New York’s bulk electricity grid, managed its wholesale electricity markets, and provided comprehensive reliability planning for the bulk electricity system.

Another important energy authority is New York Power Authority, which operates dozens of generating stations and over 1,400 circuit-miles of transmission lines. Major investor-owned utilities in the state include Central Hudson Gas & Electric Corporation, Consolidated Edison Company of New York, New York State Electric & Gas Corporation, National Grid, Orange and Rockland Utilities, Pennsylvania Electric Company, and Rochester Gas and Electric Corporation.

Demand and Supply

In the 1990s, New York faced a generation gap. Between 1996 and 2010, New Yorkers' electricity use grew from 146,641 gigawatt-hours a year to 163,505 gigawatt-hours a year, an increase of more than 11.5 percent. By the early 2010s, however, there was an energy surplus. A 2011 NYISO report noted that between 2000 and 2010, some 3,510 megawatts' capacity went offline, with 1,283 megawatts of that generation being coal fired and all but 10 megawatts deriving from other fossil fuels. During the same period, private power producers and public authorities installed 8,650 megawatts of new generation, of which a significant portion came from renewable energy projects. Some 85 percent was installed in New York City, on Long Island, and in the Hudson Valley, where demand is strongest. Of those installations, many were wind farms sited where wind resources are most available. Improvements to existing nuclear and hydropower plants upstate also contributed to the higher generating capacity.

In 2024, wind power, hydropower, and other renewable resources supplied about 34 percent of the state's electricity. In addition, to make existing resources more efficient and to cut costs, transmission system operators in New York, Quebec, Ontario, and New England developed the Broader Regional Markets initiative. Due to such efforts, sulfur dioxide (SO₂) and carbon dioxide (CO₂) rates dropped dramatically.

New York State consumes about 1.36 trillion cubic feet of natural gas a year as of 2022. The state also has significant natural gas resources in the Marcellus Shale.This geologic formation extends as far as 7,000 feet below ground level and from Ohio and West Virginia to Pennsylvania and southern New York. Geologists estimate that it may hold up to 489 trillion cubic feet of natural gas. However, residents feared that horizontal drilling and hydraulic fracturing (or "fracking") in the Marcellus Shale and other low permeability reservoirs might contaminate local water supplies. The New York State Department of Environmental Conservation began assessing these issues in 2008, and the state suspended drilling operations while it investigated those practices. New York ultimately banned fracking in 2014 because of potential health and environmental consequences.

Transmission

In 2010, the NYISO analyzed transmission congestion on the state's bulk electricity system and the potential costs and benefits of relieving congestion. As of the 2020s, more than half of the power plant capacity and high-voltage transmission facilities had been operating for thirty years or more. The continued operation of efficient, reliable wholesale power markets in future depends on the transmission system. Interstate transmission has helped serve New York’s most power-hungry regions. New York has also invested intensively in grid-scale energy storage and Smart Grid technologies. In 2009, the NYISO became the first US grid operator to allow storage systems to serve as frequency regulation providers—in other words, supplying reserve capacity to help grid operators balance energy generation and load. The state is also expanding its dynamic pricing at both the wholesale and retail levels.

New York’s Energy Future

Throughout much of the 1980s and 1990s, energy supplies were readily accessible and cost little. Prices for natural gas and petroleum products have intermittently risen since then. In the meantime, Americans and others around the world have become increasingly concerned about climate change. An economy that depends highly on fossil fuels cannot sustain its growth and competitiveness in the long run. In responding to this challenge, the Energy Law established the State Energy Planning Board (SEPB). The SEPB completed State Energy Plans in 2002, 2009, 2015, and 2018 that envisioned an innovative clean energy economy. Aside from the energy plan, New York has put forward several initiatives in the same regard. The following initiatives promise New York a secure and environmentally friendly energy future. As of the early 2020s, New York had a goal of using 70 percent renewable energy by 2030 and achieving 100 percent of zero-emission electricity by 2040.

Executive Order 24 (EO24): Issued in 2009, Executive Order 24 (EO24) sought to cut New York's greenhouse gas emissions to 80 percent of 1990 levels by 2050. Among other things, the order instituted a New York Climate Action Council (CAC)and directed that body to prepare a living Climate Action Plan that would help the state fulfill its goal. It also created the Energy Efficiency Portfolio Standard (EEPS).

EO24 also set the 45 x 15 Clean Energy Goal, which called for energy efficiency and renewable sources to supply 45 percent of state electricity demand by 2015. End-use of electricity was to be cut 15 percent, mainly through expanded energy efficiency activities, while renewable resources were to meet 30 percent of the state's electricity needs. The state approached that mark but missed the deadline set in the plan, but renewables did account for 34 percent of electricity generation in 2024.

Executive Order 111 (EO111): Issued in 2001, Executive Order 111 (EO111) mandated that all state agencies, departments, authorities, and public benefit corporations adopt energy efficiency improvements in the buildings they occupied to cut energy use 35 percent from 1990 levels by 2010.

Regional Greenhouse Gas Initiative (RGGI): New York is one of the eleven Northeast and Mid-Atlantic states involved in RGGI, which caps carbon dioxide (CO₂) emissions from electricity generators, auctions a limited number of allowances to fossil-fuel generators (the amount of which will decrease over time), and funds emissions reduction programs with the proceeds.

Low Carbon Fuel Standard (LCFS): The LCFS is a “greenhouse gas standard for transportation fuels” that is expected to spark research in alternatives to petroleum-based fuels while simultaneously reducing emissions.

System Benefits Charge (SBC) and Energy Efficiency Portfolio Standard (EEPS): The SBC and EEPS fund electric and natural gas efficiency improvements. NYSERDA’s programs aim to assist residential, commercial, industrial, and governmental customers, and particularly low-income consumers. The portfolio also includes research, development, and demonstration initiatives, as well as environmental and transportation programs.

Bibliography

"Clean Energy Standard." New York State, 2024, www.nyserda.ny.gov/All-Programs/Clean-Energy-Standard. Accessed 7 Aug. 2024.

"New York." US Energy Information Administration, 21 Dec. 2023, www.eia.gov/state/?sid=NY. Accessed 7 Aug. 2024.

"Patterns and Trends - New York State Energy Profile." New York State, 2024, www.nyserda.ny.gov/About/Publications/Energy-Analysis-Reports-and-Studies/Patterns-and-Trends. Accessed 7 Aug. 2024.

"2023 Load & Capacity Data." The New York Independent System Operator, 2023, www.nyiso.com/documents/20142/2226333/2023-Gold-Book-Public.pdf. Accessed 7 Aug. 2024.