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New Competitive Program to Retain New York's Renewable Energy Resources

Jan. 26, 2021
Initiative to promote lower carbon emissions and support the state's economic recovery while advancing the goal to obtain 70% of the state's electricity from renewable sources by 2030.

A new large-scale renewable energy procurement program that will retain New York's existing renewable energy resources, promote lower statewide carbon emissions and help support the state's economic recovery by increasing in-state competition and reducing energy costs was launched recently by Gov. Andrew Cuomo.

Administered by the New York State Energy Research and Development Authority (NYSERDA), the new Competitive Tier 2 renewable energy program will ensure the state's existing baseline renewable energy generation is retained through three annual solicitations, in parallel with NYSERDA's other solicitations for new large-scale land-based and offshore wind projects. 

Competitive Tier 2 marks progress under the State's recently expanded Clean Energy Standard and advances Governor Cuomo's goal to obtain 70% of the state's electricity from renewable sources by 2030 as mandated in the Climate Leadership and Community Protection Act.

"With our nation-leading initiatives, New York is taking incredible steps to reduce our carbon footprint and increase our use of renewable energies," Governor Cuomo said. "Keeping renewable energy in New York expands our economy, giving added momentum to our efforts to build back better and stronger. New York has been at the forefront of the fight against climate change and we will continue to be an example of how this fight can be won."  

In its first Competitive Tier 2 solicitation, issued recently, the NYSERDA is seeking proposals from existing privately owned hydropower and land-based wind generators in New York State that entered commercial operation prior to January 1, 2015. The NYSERDA's procurement approach will increase the amount of locally produced renewable energy under contract with New York State, promote greater in-state competition and allow Community Choice Aggregations to continue to voluntarily participate in the market. 

The NYSERDA will evaluate the competitive proposals based on the lowest price received. Proposals are due by 3 p.m on February 24, 2021. The NYSERDA expects to announce the awards in the second quarter of 2021.  

NYSERDA Acting President and CEO Doreen M. Harris said: "This new program will diversify our energy mix and incentivize resources to continue operation and keep their renewable energy here in New York State."

Independent Power Producers of New York President and CEO Gavin Donohue said: "Preserving our existing renewable energy facilities is imperative to building our green economy and a new energy future. Valuing their economic benefits will provide much-needed stability."

The Executive Director of the Alliance for Clean Energy New York Anne Reynolds, said: "The NYSERDA's welcome action is the latest of many important steps that New York is taking to green the grid. It will continue our drive to 70% renewables by supporting existing hydro and wind power plants.  We need to keep the clean power they create in New York just as we invest in new wind and solar projects." 

American Clean Power Association Director of Eastern State Affairs, Andrew Gohn, said: "Clean energy deployment provides significant economic and environmental benefits to New York communities, but those benefits won't be fully realized if new deployment merely replaces existing clean energy generation. American Clean Power applauds this wise effort to preserve existing renewable energy resources in New York as an important part of the state's cohesive effort to boost its economy and combat climate change." 

The launch complements the state's actions to more quickly advance development of large renewable energy projects, markedly decreasing fossil-fuel generation and harmful emissions in the state. In October, the New York State Public Service Commission approved an Order directing the NYSERDA to create the competitive Tier 2 program as part of an expansion of the landmark Clean Energy Standard, refocusing New York's existing regulatory and procurement structure on achieving the goals laid out in the CLCPA. 

Through its Competitive Tier 2 solicitations, the NYSERDA will contract with awarded generators for the purchase of Renewable Energy Certificates. A REC represents the environmental attributes of 1MWh of electricity generated from a renewable source. The Competitive Tier 2 program is funded through a new Tier 2 REC obligation required of load-serving entities. New York State's LSEs are required to purchase Tier 2 RECs from the NYSERDA each year.

New York is on a path to achieving its mandated goal of a zero-emissions electricity sector by 2040, including 70% renewable energy generation by 2030, and to reach economy-wide carbon neutrality.  

It builds on New York's ramp-up of clean energy, including over US$4 billion invested in 91 large-scale renewable projects across the state, the creation of more than 150,000 jobs in New York's clean energy sector, a commitment to develop 9,000 MW of offshore wind by 2035, and 1,800% growth in the distributed solar sector since 2011.  

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