New York On the March to Climate Utopia – Watts Up With That?

From the MANHATTAN CONTRIAN

In a post a couple of weeks ago on December 21, I observed that the country of Germany appeared to have won the race among all countries and states to be the first to hit the “Green Energy Wall.” Its pursuit of the “renewable” wind and solar electricity fantasy has put it in a spot where regular wind/sun droughts cause huge electricity price spikes, and major industries have become uncompetitive. It has no solution to its dead end, and can go no farther.

If Germany has “hit the wall,” what is the appropriate analogy for New York? New York passed its Climate Act with great fanfare in 2019. The Act orders that we are to have a “net zero” energy system by 2050, with interim deadlines along the way. The first serious deadline arrives in 2030, where the official mandate is 70% of electricity generation from “renewables” (aka “70 x 30”). That deadline is now just five years away. Within the past year, all the efforts to move toward the 70 x 30 goal are falling apart, as anybody who had given the subject any critical thought knew that they inevitably would. But nobody in authority has yet been willing to acknowledge that this has turned into a farce.

Here’s my analogy: New York is like the cartoon character Wile E. Coyote, who has run off the cliff and is now suspended in mid-air, apparently not knowing what will happen next.

We know what’s next: shortly, he will crash to earth.

Consider a few data points:

Off-shore wind procurement

The Scoping Plan developed under the Climate Act calls for some 9000 MW of offshore wind by 2035. People with elementary-school-level arithmetic skills knew that this amount of intermittent generation would not be nearly enough to replace the amounts of dispatchable generation set to close; but maybe this would at least be a serious start. By early 2023, it was reported that some 4300 MW out of the 9000 MW were in “active development,” with wholesale prices having been agreed to with developers in the range of $100/MWh.

But then reality started to hit. In this post on October 15, 2023 I reported that “essentially all” of the developers of the 4300 MW of off-shore wind in “active development” had backed out and demanded price increases in the range of 30 – 50% to proceed. New York rejected that maneuver, but ultimately had no option other than to re-bid the contracts and get bids in the range that the developers were demanding.

On February 29, 2024, the State announced that it had accepted re-bids for two of the projects in question, for a total of only about 1700 MW and at a price of over $150 per MWh. (This level of price would require retail electricity prices in the range of at least $0.40 per kWh and would be completely uneconomic if it were to become the norm for New York electricity production.).

Meanwhile, the remainder of the offshore wind procurement appears to be in complete disarray. On April 19, E&E News reported that New York had canceled efforts on three of its big offshore wind development areas, Attentive Energy, Community Offshore Wind, and Excelsior Wind. These three, had they proceeded, would have totaled about 4000 MW out of the 9000 MW 2035 goal. Excerpt:

New York canceled power contracts for three offshore wind projects Friday, citing a turbine maker’s plans to scrap its biggest machines. The news is a heavy blow to the U.S. offshore wind industry and a major setback for the climate ambitions of New York — and President Joe Biden. The three projects would have delivered 4 gigawatts of offshore wind to the state, amounting to almost half of New York’s 2035 goal.

At this point nobody has any idea how to get large amounts of offshore wind developed around New York at a price anybody is willing to pay. And of course, nobody has a solution to the intermittency problem either.

Green hydrogen

The New York regulators have recognized that a de-carbonized and predominantly wind/solar electricity generation system will require something called the “dispatchable emissions-free resource,” or DEFR, to make it work. The best idea that anybody has for the DEFR is so-called “green” hydrogen, that is, hydrogen produced by some non-emitting system, like wind, solar, or hydro.

Currently, only negligible amounts of green hydrogen are produced in the world, and none in New York. But somehow, New York got the idea that it could make this work. Two green hydrogen facilities have been granted state subsidies and are supposedly under way. One is being developed by a company called Plug Power, and is at an industrial park called STAMP west of Rochester; and the other is being developed by Air Products at Massena, on the St. Lawrence River. Both of these facitilities are almost comically small relative to the amounts of hydrogen that would be needed to fully back up New York’s electricity generation in a world of mostly wind and solar generation. But at least they would be something.

On October 18, the Batavian reported that the Plug Power hydrogen facility was “on pause.” Excerpt:

Chris Suozzi, VP for business and workforce development at the Genesee County Economic Development Center, reportedly told a Washington, D.C.-based commercial real estate firm that Plug Power’s STAMP project is on hold. . . . “They’re not ready to go,” Suozzi reportedly said. “They’re on pause. We don’t know what’s going to happen with them at this point.”

The pausing or cancellation of a green hydrogen project should surprise no one. The past year has seen major cancellations of much larger such projects by big players like Australia’s Fortescue and Origin. The fact is that the cost of producing green hydrogen is a large multiple of the cost of getting natural gas out of the ground for the same energy content, besides which natural gas is a much superior fuel in every way (higher energy density, easier to handle, less corrosive, less subject to leaks, far less dangerous and explosive, etc.). Meanwhile, the developer of the STAMP green hydrogen project, Plug Power, reported as its results for the third quarter of 2024 a loss of $211 million on revenues of $174 million. They are hoping for a loan from the federal Department of Energy to keep themselves going. I wonder what Chris Wright is going to think about that.

The Air Products facility in Massena plans to use hydro power from a dam on the St. Lawrence to produce its hydrogen. Excuse me? The hydro power is already dispatchable. How can it possibly make any sense to use dispatchable electricity to produce hydrogen whose purpose is to make dispatchable electricity? At least about 40% of the energy is going to get lost on the round trip from electricity to hydrogen and back to electricity. It simply has to be that there is a better use for the St. Lawrence River hydro power than turning it into hydrogen and then using the hydrogen. But nothing here makes any sense.

Clean Path Transmission Line

Another key facility to make renewable energy work for New York was supposed to be the Clean Path transmission line. This is a proposed 175-mile high-capacity (4 GW) transmission line to bring to New York City and the downstate region power generated at various new “renewable” (wind and solar) facilities being developed in the northern and western parts of the state. The stated cost of this major project was to be $11 billion.

On November 27, the New York State Energy Research and Development Authority informed the Public Service Commission that the Clean Path project had been canceled. Here is a copy of the NYSERDA letter. Here is a piece from Utility Dive on December 3 about the cancellation.

I don’t find any discussion about the reasons for the cancellation, but it has to be that the developers figured out the the economics did not work. Here’s the problem: because wind and solar generators only work about 20-40% of the time, this enormously expensive transmission line would not be operated at anywhere near its capacity. Likely, it would only average about one-third of capacity. That means, compared to a line that operates at or near 100% of capacity, its charges for transmission would be about triple.

The cancellation of this line has only occurred within the past month, and I haven’t seen anything about plans for a re-bid or an alternative strategy. So far, nobody is saying “this can’t possibly work.” But no matter how you approach the problem, the cost of transmitting intermittent wind and solar power from far upstate to New York City is going to be around triple the cost of transmitting power from a natural gas plant that runs nearly all the time.

So here we are, suspended up in the air, and nobody seems to realize that we will shortly crash to earth. Everybody involved is trying to milk the last dollars out of the taxpayers before the crash hits.