Episode 22: NYISO VP Zach Smith on Unprecedented Investment Needed to Meet Energy Goals

09/30/22 • 25 min

The NYISO recently released a new report that identifies the unprecedented level of electrical system investment necessary to achieve New York State’s climate policy requirements. Developed in collaboration with stakeholders and state agencies, the 2021-2040 System and Resource Outlook (the Outlook) uses various scenarios to identify potential pathways for transmission and supply investments that will support a reliable transition of the electric grid.

In our latest Power Trends podcast, NYISO Vice President for System and Resource Planning Zach Smith explains the potential impacts of the changing resource mix on the needs of the electric grid to maintain reliability. State policies, like the Climate Leadership and Community Protection Act of 2019, are having profound impacts on the electric system and decisions for system investments to keep the lights on.

System planning has always been a vital part of what we do, along with managing New York’s electric grid reliability and wholesale competitive markets. The NYISO is required to study the electric system for potential risks to meeting stringent reliability rules and make recommendations on how to maintain grid reliability into the future.

“I’m really proud of the work our team has done to consider different scenarios and identify the actions we all need to be taking now,” Smith said. “The intent is to give policymakers and stakeholders a view of the future that considers the physical constraints of the system so we can make informed investment decisions that preserve grid reliability.”

By simulating different future system configurations and forecasting the transmission constraints for each, we were able to identify the following key findings:

State climate mandates are driving the need for unprecedented levels of new generation capacity to achieve decarbonization and maintain system reliability.
Electrification of buildings and transportation driven by state policies is one of the largest factors driving rapid increases in peak and annual energy demand.
Significant increases in new resource and transmission development will be required to achieve CLCPA targets.
Dispatchable Emission-Free Resources (DEFRs) must be developed and deployed at scale well before 2040 to achieve an emission-free grid.

Ultimately, preparing for a zero-emissions electric grid by 2040, as directed by state policy, will require a variety of solutions. Examples include new transmission, significant build-out of renewable and storage resources, and the use of Dispatchable Emissions-Free Resources (DEFRs). DEFRs will be needed to replace current fossil-fueled generators to respond quickly to changing system conditions and be able to supply the grid for extended periods.

DEFR technologies are not yet commercially viable but must be developed and added to the system at scale to reliably serve demand when intermittent generation from wind and solar is unavailable and supply from storage resources is depleted. The lead time necessary for research, development, permitting, and construction of DEFR supply will require action well in advance of 2040 if state policy mandates under the CLCPA are to be achieved.

“We’re talking about policies and goals that are in 2040, and may feel like a long way off,” Smith said. “But we need to think about all of these factors today.”

For more, download

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

By simulating different future system configurations and forecasting the transmission constraints for each, we were able to identify the following key findings:

State climate mandates are driving the need for unprecedented levels of new generation capacity to achieve decarbonization and maintain system reliability.
Electrification of buildings and transportation driven by state policies is one of the largest factors driving rapid increases in peak and annual energy demand.
Significant increases in new resource and transmission development will be required to achieve CLCPA targets.
Dispatchable Emission-Free Resources (DEFRs) must be developed and deployed at scale well before 2040 to achieve an emission-free grid.

“We’re talking about policies and goals that are in 2040, and may feel like a long way off,” Smith said. “But we need to think about all of these factors today.”

For more, download

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 21: U.S. Energy Information Administration Experts Discuss Recent Energy Price Impacts

In our latest Power Trends Podcast, we interviewed two leading U.S. Energy Information Administration (EIA) analysts about domestic and international price trends and how world energy supply and demand are impacting wholesale electricity prices in New York.

We spoke to Dr. Tyler Hodge, Senior Economist in the Office of Energy Analysis, and Corrina Ricker, a Certified Data Scientist on the Natural Gas Markets team, to dive into the findings of EIA’s latest Short Term Energy Outlook (STEO).

Hodge explained the relationship between fuel costs and energy prices, and how recent geopolitical factors are creating uncertainty about energy supply. Ricker also explained the relationship between the economic slowdown resulting from the pandemic and how the demand for natural gas has more recently outpaced the growth in supply, leading to higher prices.

Both analysts also shared price forecasts in the STEO based on various economic data for the next several months and discussed the expected growth of clean energy resources on a national basis.

About the U.S. Energy Information Administration
The EIA collects, analyzes, and disseminates independent and impartial energy information to promote sound policymaking, efficient markets, and public understanding of energy and its interaction with the economy and the environment. Read their Short-Term Energy Outlook.

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 23: NYISO’s Market Monitor – Guarding Competition for the Benefit of Consumers

Every five minutes, 24 hours a day, electricity in New York State is bought and sold through competitive wholesale electric markets administered by the NYISO.
And while we may not think about electricity the same way we do about other products and services, competitive wholesale electric markets are truly dynamic, with hundreds of buyers and sellers, or “market participants,” involved in the process of meeting consumer demand for power at the least cost available. But how do we make sure that prices in these electric markets are fair and that all market participants act according to the rules and requirements?
That’s where Shaun Johnson and his team come in.
As the NYISO’s Director of Market Mitigation and Analysis, Shaun Johnson leads a group of 25 electricity markets experts who “police” the system, protecting consumers by making sure prices accurately reflect operating conditions and generator costs.
To meet its goal, the Market Mitigation and Analysis (MMA) team examines data detailing market transactions and operating behaviors of generating assets to verify that consumer prices reflect competitive market circumstances. If they detect anomalies or a trend that raises questions, they possess the ability to investigate and request additional information from market participants.
Johnson, the subject of our latest Power Trends podcast, is an economist who oversees a team of mathematicians, computer scientists, former energy traders, and technicians with years of experience in power plant and energy industry operations. In short, the team is responsible for evaluating the performance of the markets and identifying attempts to exercise market power.
Team members even crisscross the state regularly to visit generators and observe their operations first-hand. This helps team members understand and verify trading or bidding behavior in the markets later on.
“Less than one-half of one percent of our market outcomes end up requiring action,” Johnson is quick to point out. “But those sanctions, or penalties, have resulted in just over $13 million dollars being refunded back to New York consumers in the last three years.”
In keeping with the important independence, the NYISO MMA group and an external Market Monitoring Unit (MMU) work independently and collaboratively to protect consumers and participants in the ISO-administered markets. Together, these guardians of the grid report not only to the NYISO’s Board of Directors, but also to the Federal Energy Regulatory Commission, which regulates the industry.
Johnson noted that electric prices are expected to continue to rise this winter due to spikes in global demand for fossil fuels that are lagging supply, as well as global instability caused by the war in Ukraine and economic instability across Europe.
Wholesale, competitive markets remain the best way to make sure consumers receive the least possible price for their electricity, even in the face of rising fossil fuel costs, Johnson notes. And the MMA team, acting as sheriff of these markets, makes sure these prices are achieved fairly; especially when prices rise.

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