New York’s Clean Energy Mandates Could Cost $1 Trillion, Study Says
New York’s Clean Energy Standard (CES), a renewable energy mandate, could cost Empire State ratepayers and businesses close to $1 trillion over the course of the program.
New York’s Clean Energy Standard (CES), a renewable energy mandate, could cost the state’s ratepayers and businesses close to $1 trillion over the course of the program.
That’s the conclusion of a new study from the Manhattan Institute for Policy Research, by Jonathan A. Lesser, president of Continental Economics.
The Clean Energy Standard, enacted by the state’s Public Service Commission (PSC) in August 2016 without any legislative vote, requires at least 50 percent of all the electricity sold in New York by its utilities to come from renewable generation sources by 2030. CES also requires the state’s utilities to reduce their greenhouse gas (GHG) emissions by 40 percent by 2030 and 80 percent below 1990 levels by 2050, a mandate known as “80 by 50.”
With CES, “New York has taken bold action to become a national leader in the clean energy economy and is taking concrete, cost-effective steps today to safeguard this state’s environment for decades to come,” said Gov. Andrew Cuomo (D) in a press release upon releasing the plan.
High Costs, No Climate Benefit
Lesser’s report states the CES will impose a high cost while delivering no measurable effects on climate change.
“The primary reason for the CES—to reduce GHG emissions—will not lead to any measurable impacts on climate and thus no climate-related benefits,” writes Lesser. “However, CES will significantly raise electricity costs.”
Lesser’s analysis shows the “80 by 50” mandate would require installing 100,000 megawatts (MW) of offshore wind generation, 150,000 MW of onshore wind generation, or 300,000 MW of solar photovoltaic (PV) power.
“By comparison, in 2015 about 11,300 MW of new solar PV capacity was installed in the entire U.S.,” writes Lesser. “The bottom line is that New York’s Clean Energy Standard appears to be an exercise in symbolic environmentalism.”
“Given current technology, and even assuming continued cost reductions in wind and solar generation, the ‘80 by 50’ mandate is unaffordable and unobtainable,” Lesser told Environment & Climate News. “What’s worse is lower-income consumers will bear the brunt of the costs unless existing subsidies for rooftop solar PV, including ‘free’ back-up service provided by local electric utilities, are changed.”
Prices Already High
At 15.28 cents per kilowatt hour, New York currently has the sixth-highest retail electricity prices in the continental United States, according to the U.S. Energy Information Administration.
“As the report also points out, the climate impacts of the ‘80 by 50’ mandate won’t even be measurable, meaning the benefits will be insignificant,” Lesser said. “Even if the U.S. reduced its GHG emissions to zero tomorrow, the effects on global climate would be negligible.”
Ken Girardin, communications and marketing manager with the Empire Center for Public Policy, coauthored a 2016 study which estimated CES would cost state ratepayers $3.4 billion over just the first five years of the program. He says the CES plan is just an expensive jobs program.
“The Clean Energy Standard is a jobs program, not an environmental policy,” said Girardin. “The PSC deliberately excluded most hydroelectric power from its definition of renewables, because the PSC was focused on building more windmills and solar panels and keeping three unprofitable nuclear plants open, not reducing carbon emissions.”
‘A Mere Symbolic Gesture’
Jordan McGillis, a policy analyst with the Institute for Energy Research, says Cuomo has consistently enacted policies that raise energy prices.
“New York’s state government has done virtually everything in its power to bring affordable energy production to a halt, [including] the denial of certification for pipelines, malinvestment in fledgling technologies, and a ban on hydraulic fracturing,” McGillis said. “Unlike marginal increases in global temperatures, New York’s energy policies are already causing problems for its citizens, as we saw during the summer of 2016 when the spot price of wholesale electricity spiked to over $1,000 per MWh in New York City on July 25.
“Unfortunately for New Yorkers, with the CES’s implementation, higher prices and lower reliability will become the norm,” said McGillis. “Adding insult to injury, as Lesser’s report makes clear, the CES’s coercive de-carbonization of New York’s economy will have no measurable impact on global temperatures. The CES is a mere symbolic gesture, but one that comes at a punishing cost.”
Timothy Benson (firstname.lastname@example.org) is a policy analyst with The Heartland Institute.
Jonathan A. Lesser, “New York’s Clean Energy Programs: The High Cost of Symbolic Environmentalism,” Manhattan Institute for Policy Research, August 2017: https://www.heartland.org/publications-resources/publications/new-yorks-clean-energy-programs-the-high-cost-of-symbolic-environmentalism