Episode 19: How We Removed Barriers to Clean-Energy Resources Coming Onto the Grid

02/28/22 • 20 min

Our stakeholders recently approved changes to market rules which, if accepted by the Federal Energy Regulatory Commission, will help us meet New York’s zero-emissions mandates by supporting new investments in energy resources.

The proposal was created to make it easier for clean-energy resources such as solar or wind to take part in the competitive, wholesale markets that serve the New York grid. The project was overwhelmingly supported by stakeholders, following months of discussion on how to reconcile capacity market rules with the state’s Climate Leadership and Community Protection Act.

Why is this change important, how did it come about, and how will it help bring us to a zero-emissions grid by 2040? Vice President for External Affairs and Corporate Communications Kevin Lanahan recently interviewed two of the primary authors of the proposal, also known as Comprehensive Mitigation Reform, for our latest Power Trends podcast. He spoke to Director of Market Design Mike DeSocio, and Manager of Capacity Market Design Zach T. Smith.

“What we’re really focused on is making sure resources that are participating in the wholesale, competitive markets are treated fairly and can compete on a level playing field,” said DeSocio.

DeSocio explained further: buyer-side mitigation (BSM) rules were created to make sure that no single resource could have an unfair competitive advantage over another, including out-of-market payments. But many new wind and solar resources entering the market receive government subsidies because of their clean-energy attributes. Without reform, current BSM rules could limit how these clean energy resources could compete in the wholesale markets. The concern was that existing rules could make electricity more expensive and limit new investment in clean energy.

Our new reforms, if approved by federal regulators, will make sure this doesn’t happen.

“It took a lot of work to get there,” DeSocio noted. “But we ended up with a proposal that balances all the various needs.”

Another important component of these reforms is what is known as resource capacity accreditation, explained Smith. Accreditation values the contribution each resource has toward reliability. Battery storage, for instance, will be more important in the future because it can provide the flexible power, we’ll need to offset clean energy when the wind stops blowing or the sun doesn’t shine.

“Our proposal,” Smith says, “will reflect that increase in value of these resources as the system changes.”

By adding this value, capacity accreditation will help maintain the right investment signals for new resource developers, he said.

For more on the market changes that will help bring New York to a clean-energy future, listen now.

For more about how we are addressing a zero-emissions grid with market-based solutions, visit the 2040 Power Grid webpage.

Learn More

Follow us on Twitter @NewYorkISO and LinkedIn @NYISO
Read our blogs and watch our videos
Check out our 2040 grid page

“What we’re really focused on is making sure resources that are participating in the wholesale, competitive markets are treated fairly and can compete on a level playing field,” said DeSocio.

Our new reforms, if approved by federal regulators, will make sure this doesn’t happen.

“It took a lot of work to get there,” DeSocio noted. “But we ended up with a proposal that balances all the various needs.”

“Our proposal,” Smith says, “will reflect that increase in value of these resources as the system changes.”

By adding this value, capacity accreditation will help maintain the right investment signals for new resource developers, he said.

For more on the market changes that will help bring New York to a clean-energy future, listen now.

For more about how we are addressing a zero-emissions grid with market-based solutions, visit the 2040 Power Grid webpage.

Learn More

Follow us on Twitter @NewYorkISO and LinkedIn @NYISO
Read our blogs and watch our videos
Check out our 2040 grid page

Previous Episode

Episode 18: NYISO VP Zach Smith on Reliability Risks from Extreme Weather, Transmission Constraints, & Electricity Economics

We’ve just released a new report, the Comprehensive Reliability Plan (CRP), which looks at the New York energy grid over the next 10 years and determines if there are any factors that could impact our ability to keep the lights on for all.

While the report declared there are no immediate risks, Vice President of System & Resource Planning Zach Smith says the future of the grid is not so simple. To safely and responsibly tackle climate change impacts to the power grid, one must consider multiple factors together in thinking about decarbonization and planning.

“We have a shifting resource mix of generation. We need to be mindful of how this big machine called the electric grid continues to operate,” Smith told Kevin Lanahan, Vice President of External Affairs and Corporate Communications, during an interview for our Power Trends Podcast.

One issue, Smith said, is that as new resources come onto the grid, such as wind or solar power, older, less efficient power plants will retire. The “spinning mass” of fossil fuel-fired plants provides a reliable source of electricity that can offset the intermittent nature of solar and wind resources, which are limited due to weather and time of day. Losing oil and gas plants will require replacement by other energy resources that can offset these intermittent resources.

“We’re already seeing changes on the grid. That’s going to have a real impact: some of them positive, some of them negative,” Smith said. “We’re very concerned that if we experience a heat wave, a polar vortex, our projections show we could come up short.”

For more about how we are addressing a zero-emissions grid with market-based solutions, visit the 2040 Power Grid webpage.

Learn More

Follow us on Twitter @NewYorkISO and LinkedIn @NYISO
Read our blogs and watch our videos
Check out our 2040 grid page

Next Episode

Episode 20: The ROI of Energy Security Investment with Karen Wayland

It’s going to take time and precision to build the grid of the future. Managing reliability carefully and investing in the right technologies as we transition to a grid increasingly based on clean energy will be key to success.
These are the messages of Dr. Karen Wayland, a noted policy expert who focuses on the path to grid modernization and infrastructure improvements aimed at a cleaner, more efficient, more secure #gridofthefuture. Wayland is CEO of GridWise Alliance , an organization made up of energy utilities and technology leaders. She was recently interviewed by Kevin Lanahan, NYISO Vice President of External Affairs and Corporate Communications, for our latest Power Trends podcast.
In the wide-ranging conversation, Wayland explores the diverse technology portfolio necessary to deliver a modernized grid, including new transmission, distributed resources, and smart energy communication systems. Specifically, Wayland sees “autonomous healing” grid technology as a way to address outages caused by extreme weather. In the future she sees tools on the electric system that can automatically reroute power when a line is down to reduce the impact away from concentrated populations, for example.
“Reliability can't be compromised,” she said. “And we also can't compromise that affordability part of grid modernization... If we are going to get to a decarbonized, flexible grid, we have to be smart about understanding what the best return on that investment's going to be.”
For more on the market changes that will help bring New York to a clean-energy future, listen now.

For more about how we are addressing a zero-emissions grid with market-based solutions, visit the 2040 Power Grid webpage.

Learn More