Industry pushes for inclusion in renewable energy incentives
By Zachary Matson
New York hydroelectric producers are calling on energy regulators to give their industry equal footing with solar and wind, as the state attempts to transition to renewable power and carbon-free power generation.
Hydropower producers in recent years have increased exports to neighboring states or struggled to stay open, reducing the amount of hydropower utilized in the state just as it seeks to draw all of its electricity from renewable sources.
A petition filed with the Public Service Commission last week argued the commission should expand access to a financial incentive available to so-called “distributed energy resources,” like community solar and other projects that directly engage customers, so that hydropower projects built before 2015 can also benefit.
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The program shuts out the legacy hydropower producers that have long contributed the lion’s share of renewable energy produced in the state, according to the petition, worsening unsustainable economic conditions at many facilities. Sixteen hydropower companies, including many operators of dams and generation sites that draw power from Adirondack rivers, signed the petition.
“The fact is that maintaining existing zero-carbon resources is the lowest-carbon solution for meeting New York’s portfolio goals,” petitioners wrote. “In terms of net emissions, the fact that these resources already exist makes them more valuable, not less.”
The petition argues the commission should repurpose funding for a separate, sparsely-used program to incentivize existing hydropower facilities to become distributed energy providers, working to sign up customers to purchase electricity credits directly.
Dams have long been central to Adirondack communities, but the important infrastructure, which holds up much of the region’s physical and social landscape, is aging and faces growing storm threats due to climate change.
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The petition argues that incentivizing legacy hydropower producers to become distributed energy resources would encourage residents to support long-term investments in local dams. Under the proposed plan, hydropower producers that pursued a customer-based business model — as opposed to selling directly to large utilities or on the wholesale energy market — would be paid for the environmental benefit of not generating new emissions. The environmental payment at current rates is worth about 3 cents per kilowatt-hour generated.
The plan would “[empower] New Yorkers to make a consumer choice that delivers much-needed value to local renewable power producers, investing in their community and local ecology as well as the global climate,” the petition states.
MORE ON THE CLIMATE PLAN:
Public to state on climate plan: who will bear the cost?
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Hydro left behind?
New York’s 2019 climate law committed to eliminating all emissions creating by electricity generation by 2040 and reaching 70% emissions-free electricity by 2030. Still, less than 30% of the state’s electricity was emissions free as of 2020, according to a state report, less than a 3% increase from the 2014 baseline.
Emmett Smith, who operates the Azure Mountain Power dam in St. Regis Falls, was the petition’s lead signatory. Smith said it’s unfair of the state to count legacy hydropower toward its renewable targets without offering a financial incentive like it does to new solar and wind developments.
“We are still counted to the state’s renewable energy mix, but we are not paid for being renewable,” Smith said.
The petition outlines how some hydropower producers in recent years have exported power to neighboring states with better renewable incentives. Some facilities have curtailed generation or shut down as wholesale energy rates have declined in recent years, reaching unsustainable levels for many hydropower generators.
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Legacy renewable generators between 2016 and 2019 increased exports by 50%, raising concerns among state officials that the growth in exports could threaten the state’s ability to hit emissions targets.
“It’s pretty simple math, the numbers are in, and it’s clear that a lot of generators have either shut down, reduced production or are exporting,” Smith said.
A pair of earlier credits incentivized some hydropower producers to enter the distributed energy program, but that has slowed since those credits expired. Smith, who founded Northern Power & Light as a way to connect hydropower generation with local customers, said he thinks other hydropower producers would move into the program if the state paid for the environmental benefit.
In 2020, the New York State Energy Research and Development Authority offered to subsidize legacy hydropower generators by purchasing their renewable energy, but the state only awarded a handful of contracts under the first bid solicitation and none under the second. Smith said the state did not offer a high enough purchase price to entice producers.
The petition proposed repurposing funding from that program to fund the environmental benefit for hydropower producers who enter the distributed energy program.
Kelly Sackheim, owner and operator of the Sandy Hollow Power Company and dam on the Indian River in Philadelphia, said margins are tight operating a dam and any help from the state would make her operation more stable. The dam she operates was first constructed in 1850 and requires costly ongoing upgrades and maintenance. She said keeping hydropower facilities operating supports the goal of cleaning up the state’s energy grid.
“It’s a question of do you want to preserve the environment by getting electricity in a clean manner and making that economically viable,” Sackheim said.
The petition estimated that about a quarter of eligible producers would enter the program, representing about 210 gigawatt hours of hydropower each year, enough to serve around 34,000 residential customers. The overall cost of funding those environmental payments is estimated to cost about $6 million annually.
If the commission agrees to consider the petition, the proposal would be opened for public comments, Smith said.
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Must be NYS hydro generated electricity does not fit into the green religious doctrine. Oh that’s right, only when it is generated in another country is it considered acceptable. Maybe if you put more cash in the plate the next time it is passed around things will change.
Maybe that is because the green religion is also known as NIMBY. New York State isn’t the only one practicing energy bigotry. The federal energy regulator, FERC, requires expensive and time consuming federal licensing on any size hydro, even home scale, yet megawatt solar and wind do not need FERC licensing. You can put home solar on your roof or a small windmill in your field with only local approvals. If you want to tap the energy from a water source on your property you will need the federal license…….and that home scale hydro requires the same federal license as a 5 Mega Watt powerplant. It is a rigged system.
This very sensible petition hints at some of the larger problems with the New York renewable energy strategy, which is over reliant on short-term, underbid subsidies for utility-scale solar projects. Though there are only enough legacy DER hydro projects in NYS to supply about 1% of current annual electricity load for Upstate (not to mention that the legislation like the Wild, Scenic and Recreational Rivers Act prevents future hydro development in much of the Adirondacks), this is significant considering that all utility-scale solar projects in the state combined currently produce less than 2x that! Moreover, if we lack the framework to offer long-term, sustainable support for existing hydro resources, then how can we be sure that solar projects will not face similar problems in the future? Subsidizing the lowest bidder and rushing projects through regulatory processes without larger market interventions or long-term, big-picture goals — as NYS is doing for utility-scale solar (among other things!) — is only shifting environmental and social costs onto future generations.
NYS seems OK with keeping dams and reservoirs for recreation, but try to put a generator on it and it becomes evil. It isn’t the old, decommissioned generators that are evil, but the old, dam designs.
It isn’t impossible to rebuild or alter many of our current dams to allow proper fish/invertebrate travel. They can also be set up to flush every spring. But cheap oil/coal became the lowest common denominator in energy supply long ago and hydro was forgotten. Might this have something to do with increased hydro regulation?? If some transmission ROWs still exist, wouldn’t this would be the time to rebuild dams to be more environmentally friendly? If there are unused/decommissioned generation facilities, why not crank them up again? Wouldn’t they at least help with short-term generation at lower cost than NEW wind/solar installations that also require more land use (often ignored!!) with NEW transmission lines?
This is typical of politicians – “It is always better to build something NEW than fix what we have. Fixing stuff won’t get me re-elected!” These people need to go – vote accordingly.
I auto-think hydro dams=>fish migrations
Leroy,
In the past, the dams were built to maximize blockage of the river to maximize control of the flow. The owners never wanted the generators to be idle, so required large impoundments. It is possible to engineer hydro without completely blocking rivers. Allowing flow for passage of aquatic organisms and periodic flushing is not impossible, just needs to be designed into the project.
It is unlikely there will be new dams built because of environmental concerns. But it is crazy not to utilize all the existing hydropower, which is far superior to solar and wind because it is produced 24/7. The existing dams are also far less environmentally disturbing than building solar or wind farms. The dams do not take farmland out of crop production, are not the eyesores of solar and wind farms, and cause no other additional environmental disturbance. Hydropower producers should be given the same incentives as other renewable energy producers. If fish migration is a concern, then address that problem by modification or redesign when rebuilding a dam, but the fact is that the dams exist and the hydropower should be used.
Pete,
I agree – environmental concerns will hinder new dams. But most of these concerns are front and center because of historically environmentally unfriendly construction. Simple dams blocking nearly all natural flow. Heavy-handed areas flooded on indigenous people’s lands.
But there are indeed some environmental benefits by properly-designed dams. Think beavers. Do we feel they harm the environment? Just the opposite. We just need to think and build like beavers. Impoundments don’t need to be deep lakes. Relatively shallow marshes and swamps hold a great deal of water as well and improve aquifers. They may not be able to generate as efficiently as deep-water reservoirs, but they also provide positive ecological benefits unrelated to power. Many poorly-producing forests and farmlands could be turned into productive swamps, marshes, and pond networks.
Staunch anti-hydro environmentalists just need to be re-educated to the potential benefits to thinking like beavers when we think of dams. Beavers wouldn’t even consider building the Hoover Dam.
Alternate forms of energy like solar and wind are great ideas, but have major limitations that are often ignored. How long is a winter night in the north? When do we need that energy the most? No solar generation at night. Wind, of course, requires a certain amount of wind to generate. Energy storage as well as transmission need to be addressed. I personally don’t feel these stopgap technologies should be relied on or billed as future major players in round-the-clock power sources. For that, we need to be re-thinking hydro and nuclear and how we can mitigate their downsides.
Hydro just requires flowing water and a generator. Some hydro generation involves pumping water uphill into ponds/reservoirs during time of lower energy demands to maintain the proper head pressure for generation. Less efficient, yes, but can work well with a more natural flow of a river.
Nuke plants have been demonized irrationally in the past – largely by fossil fuel proponents stoking public fears. They certainly aren’t without risk or toxic by-products, but how many poorly-designed dams have breached in the past? How many rivers have been harmed by poor design? How many tons of poison have been put into the atmosphere daily with fossil fuel plants over the years?
Energy generation and transmission have never been benign. Of course we need to mitigate any negatives produced by ANY power source – including manufacturing the units. But the first step we need to take is to remove the immense, ever-present pressures the fossil fuel industry places on government and public propaganda. The tail is wagging the dog. Until this influence peddling is gone, there can be no level playing field for alternative sources of energy.
This petition’s request seems to be right in line with the CLCPA goals, and should be granted! No way should we lose these invaluable hydro generators of clean power! Governor Hochul, take note!
The only viable answer to providing the amounts of power the world requires is nuclear, preferable SMR’s, some which use nuclear “waste” as fuel. But the $$$ will flow to wherever the politicians and their masters have it invested.