Exploring New York City's Path to Decarbonization
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The June 2019 passage of the Climate Leadership and Community Protection Act (CLCPA) in New York state set ambitious carbon reduction goals over the 2030-2050 time horizon. Removal of carbon from the electric system and decarbonization of the New York state economy becomes increasingly challenging when taking timeline, cost and reliability constraints into account. New York City (NYISO Zone J) is a unique part of the NYISO system, as this region is currently comprised of aging generation infrastructure, experiences challenges with importing sufficient energy to serve peak demand and is subject to geographic limitations. As carbon reductions become a focal point in generation resource planning, the integration of the societal cost of carbon is an increasingly central component of generation resource selection. A 20-year revenue requirement model has been utilized to evaluate the impact of carbon pricing on the levelized cost of energy (LCOE) and levelized cost of capacity across various fuel types. Taking into consideration affordability, emission intensity and operational parameters to maintain grid reliability, both short and long-term carbon reduction strategies must be deployed. In the short-term horizon renewable integration in New York City is best supported through gas flexibility and the replacement of Zone J’s older peaking units with dispatchable high-efficiency combustion turbines. In the long-term horizon, the region will need to increase transmission investments and begin exploring applicable energy storage to align carbon-free energy with load demands. It is important to ensure that the short and long-term strategies complement each other and provide avenues for the energy industry to improve these tools over the state’s journey to decarbonization.