State plans $1.5 billion more to spur renewable energy; 10-year program would focus on large wind, solar projects 

Over the last decade, New York has spurred the development of nearly 1,900 megawatts of renewable electricity projects, from wind farms to solar energy and other clean energy technologies.

But state energy officials think New York can do better.

The state’s energy research authority is proposing to spend $1.5 billion over the next 10 years to spur further development in renewable energy projects, extending a program that began in 2004 through the state’s Renewable Portfolio Standard program.

And the New York State Energy Research and Development Authority wants to make several changes to the program that agency officials believe will help the state investment yield even more renewable generating capacity by reducing project costs and trimming the cost of financing those developments.

“The current approach has been good, but we can do better,” said Richard Kauffman, the state’s chairman of energy and finance.

The program, which must be reviewed by the state Public Service Commission, focuses on large-scale renewable energy projects, such as wind farms, big solar energy arrays and other types of clean energy technologies, providing funding that helps make those projects economically viable.

State officials view the investments in renewable energy projects today much like the big public spending projects that led to huge hydroelectric projects, such as the Niagara Power Project in the 1950s. They believe the changes being proposed will help renewable projects move to a point where they rely less heavily on public subsidies.

Kauffman said he thinks the renewable energy industry could be a position to end its reliance on public subsidies when the proposed program comes to an end 10 years from now.

The program will create an estimated 670 jobs annually across the state and will reduce harmful carbon dioxide emissions by 50 million tons over the life of the projects. Environmental groups, including the Sierra Club, Alliance for Clean Energy New York, Environmental Advocates of New York, the Natural Resources Defense Council, and Pace Energy and Climate Center, called the extension “a huge step forward” in the state’s push to reduce climate-changing emissions by 80 percent by 2050.

The state initiative will focus on large-scale renewable energy projects, which are broadly defined as developments that deliver their power directly to the state’s electric grid, rather than to a specific customer, said Alan Wechsler, a NYSERDA spokesman.

Only one large-scale solar project currently is operating in New York – a 32-megawatt array on Long Island.

Several smaller-scale projects are in the works in the Buffalo Niagara region, including Steel Sun, a sprawling solar complex in Lackawanna that would install 13,000 solar panels on the former Bethlehem Steel site, covering an area spanning the equivalent of 69 tennis courts and capable of generating 4 megawatts of electricity. The project’s developer, BQ Energy, is expected to begin installing solar panels on the site this summer, said Fred Heinle, Lackawanna’s development director.

BQ Energy also is proposing to build three solar arrays with a generating capacity of 7.8 megawatts in Olean, with St. Bonaventure University agreeing to purchase the project’s power in a move that is expected to reduce the school’s electricity costs by an estimated $100,000 a year.

Both of those projects are receiving incentives through the state’s NY Sun initiative for smaller-scale projects.

The NYSERDA proposal would make several changes in its program for large-scale projects aimed at further reducing their costs.

One change would push for developers to reach power purchase agreements with private purchasers or utilities to acquire the electricity that would be produced by the renewable energy project. Having a buyer in place for the power could reduce costs enough to stretch the NYSERDA funding so that it could finance anywhere from 70 percent to 120 percent more renewable energy capacity than under the current policy.

A key issue that will be considered as NYSERDA’s proposal is put up for public comment will be whether utilities, which were forced to sell off their power plants more than a decade ago when the state deregulated its electricity markets, should be allowed to own large-scale renewable energy projects.

Consumers’ electric bills ultimately could drop, even with the subsidies for renewable power, as proposed changes in the power grid allow for more efficient use of generating capacity in a system that now uses only about 55 percent of its peak output on average, coupled with a proposed end to bill surcharges that now support renewable energy programs, Kauffman said.

“We’ll be able to have a more efficient use of ratepayer dollars,” Kauffman said. “Part of this plan will be to help stimulate the voluntary market for businesses and individuals to procure renewable power.”