NY's fossil fuel use surged after Indian Point closure

The 2021 shutdown of the Indian Point nuclear power plant led to near-total dependence on fossil fuels to produce electricity in New York's energy-hungry downstate region, and surging amounts of heat-trapping carbon dioxide in the air.

A report issued last month by the New York Independent System Operator, which runs the state's electric grid, shows that in 2021, 89% of downstate energy came from natural gas and oil, up from 77% the previous year when both of Indian Point's two reactors were still running. Statewide, that translated to 39% fossil fuel production, up from 34% in 2020.

And this summer, fossil fuel's contribution is likely to increase to 92% in the downstate region, leaving just an 8% contribution from renewables like wind, solar and hydro power while gas and oil take the lead, NYISO figures show.

The newly released figures demonstrate in stark detail just how much work the state will need to do in the coming years if it's to achieve its ambitious climate-related goals — reducing carbon-producing emissions to zero while clearing the way for renewables like wind and solar power to make a larger contribution to the electric grid.

And they have pro-nuclear advocates urging the state to clear a path to allow nuclear power play a larger role in the state's energy future.

"If we're serious about dealing with climate change, then we're going to need all the tools in the toolbox, which includes nuclear, not just now but in the future," said Keith Schue, an electrical engineer and a leader of Nuclear New York, a pro-nuclear group allied with James Hansen, a leading climate scientist. "We do believe that closing Indian Point was a mistake. But are we going to continue making mistakes or can we learn from them?"

The shift to greater fossil fuel reliance comes as little surprise.

A 2017 NYISO study predicted the 2,000 megawatts of power lost when Indian Point closed would be picked up by three new natural gas plants — in Dover Plains, Wawayanda and Bayonne, N.J. One megawatt powers between 800 and 1,000 homes.

And Indian Point's former owner, Louisiana-based Entergy, noted that the year after its Vermont Yankee plant shut down in 2014, natural gas-fired generation jumped 12%, just as it has since the Buchanan plant closed. The first of Indian Point's two working reactors shut down in April 2020, followed by the second in April 2021.

With Indian Point eliminated from the energy mix, it has become even harder to wean a downstate region that includes New York City, where energy demand is greatest, off fossil fuels.

Why did the plant close?

Former Gov. Andrew Cuomo's administration brokered the 2017 deal with Entergy that led to Indian Point's shutdown, with Cuomo citing fears of a nuclear mishap at a power plant located some 35 miles from New York City. He chose to keep open three upstate nuclear plants — two on Lake Ontario and another near Rochester — by arranging for some $7.6 billion in subsidies over 12 years.

But the agreement that shuttered Indian Point came when natural gas was cheap. Entergy cited competition from natural gas in the energy market as the prime mover behind its decision to close a plant that had generated electricity for Westchester County and New York City for six decades.

Today, with natural gas prices surging, electricity is not so cheap.

"We got used to having historically cheap natural gas in the United States," said Madison Hilly, the founder and executive director of the Campaign for a Green Nuclear Deal in Chicago. "So places that shut down their nuclear plants, even if they were replaced with gas, consumers really didn't feel that in their pocketbooks. Now the era of nonprofit natural gas — as I call it — seems to be over. It's really expensive."

The push to reconsider nuclear power

In 2021, the average wholesale price of electricity in New York nearly was $47.59 per megawatt hour last year, nearly double what it was the previous year. NYISO's independent monitor credited the increase in wholesale electric prices to the Indian Point shutdown, the NYISO report said.

California, which is pursuing a slate of clean energy goals like New York's, appears to be rethinking its decision to do away with nuclear power.

In May, California Gov. Gavin Newsom said he would support keeping the Diablo Canyon nuclear plant open beyond its planned 2025 closure to ensure the reliability of the state's electric grid. Researchers from Stanford University and the Massachusetts Institute of Technology have concluded keeping the plant open for another ten years could limit carbon emissions and save the state $2.6 billion in power costs.

Hilly has teamed with Nuclear New York, a coalition of scientists, engineers and labor and management from the nuclear industry, to urge the state to give nuclear power a larger role in the state's energy mix. In April, Hansen, a former NASA scientist who was among the first to identify the consequences from climate change, appeared at an Albany press conference to urge the state to include nuclear in a plan being drafted for the Climate Leadership and Community Protection Act.

"We're trying to prevent the situation from getting that bad — that reality that forces politicians to eat crow," Hilly said. "Eventually, if we keep going down this path, ratepayers and voters are not going to tolerate it and politicians will quickly have to get on board or get out."

A spokesman for Gov. Kathy Hochul said the state is forging ahead with its twin goals of having 70% of the state's electric demand met by renewables by 2030 and 100% zero emissions by 2040.

"These goals, which are being met through solar, wind, and hydroelectricity along with the continued use of the state's three existing upstate nuclear plants, were developed to reduce emissions from fossil fuels, combat the dangerous impacts of climate change and benefit New Yorkers by reducing volatility in electricity pricing," spokesman Leo Rosales said. "Planning for these goals took into account the necessary closure of Indian Point following dozens of safety and operational hazards and in no way jeopardizes New York's clean energy goals or the reliability of the state's electric grid."

NY's electric grid under siege

Increased energy costs are only part of the problem.

NYISO's June report offers a sobering assessment of grid reliability in the years ahead.

The amount of energy resources the state can access each day is decreasing, and that trend is expected to worsen in the years to come as the demand for electricity surges. Electricity needed to charge cars and heat buildings will shift peak usage to the winter instead of summer, which typically sees the highest energy usage as air conditioners run around the clock.

Adding to the problem are environmental regulations that will impact the output of the state's peaker plants, fossil-fuel generated plants that take their name from delivering energy at times of peak demand. Roughly half of the 3,300 megawatts these plants generate in the lower Hudson Valley, Long Island and New York City will be unavailable during the summer of 2025, NYISO notes.

"The margins that we see on our system are shrinking," NYISO president and chief executive officer Rich Dewey told reporters at a media briefing last month.

The grid is undergoing perhaps the most transformative moment in its history.

Older generating plants are being shut down while the state introduces a slate of renewable energy projects — offshore wind on Long Island, wind power upstate, batteries to store solar energy.

A network of transmission lines stretching from western New York to New York City is currently under construction, part of an effort to remove a bottleneck that kept clean energy stuck north of Albany. Upstate's energy mix is decidedly cleaner than downstate's. Upstate, three nuclear power plants and hydropower from the Robert Moses Niagara Hydroelectric Power Station contribute to a 91% carbon-free energy grid.

There are also plans to deliver hydropower to New York City from Canada by way of 340 miles of underground cable that will run in the Hudson River. Another 174-mile transmission line will bring upstate wind down to Queens along upstate rights-of-way.

But it will be years before these projects are up and running.

The NYISO report anticipates a 10% gap in the amount of renewable power that will be available on as-needed basis in the winter of 2040.

"We've identified there is a need for dispatchable, emissions-free resources," Dewey said. "That technology does not yet exist and there's a gap that needs to be closed. We're only going to get so far with wind, solar and storage, due to the intermittent nature of those resources."

And by next year, a heatwave with an average temperate of 95 degrees may result in thin margins and "significant deficiencies," NYISO says.

A 98-degree heatwave would test the system's limits today and exceed grid capabilities next year, the report adds.

"We're taking on a little bit more risk in our ability to manage unplanned, unforeseen events on the power system, or potentially severe weather events," Dewey added.

NYISO isn't alone in its concerns about grid reliability. The state's utilities have been raising their concerns.

A group representing most of the state's major utilities recently studied energy production for the month of January, an especially cold month and the first winter when Indian Point wasn't producing power. The plant's Unit 2 shut down in 2020 and Unit 3 the following year.

Wind and other renewables contributed 5% of total generation. There was less wind and less solar generation due to shorter daylight hours and heavy cloud cover.

"Today's renewable resources are emissions-free, but their output is weather-dependent," the Utilities Consultation Group analysis says. "This intermittency and the need for electric supply to meet customer energy demand every hour of the day may result in reliability issues if not proactively addressed."

The group represents Central Hudson, ConEdison, Rochester, Niagara Mohawk, NYSEG and Orange and Rockland utilities.

'Closing Indian Point was a mistake'

Critics of the deal that led to Indian Point's closure question why the plant couldn't remain open while the state pursued a renewable buildout.

"Maybe someday renewables could be a big factor in the energy market," said Theresa Knickerbocker, the mayor of the lower Hudson Valley village of Buchanan, home to Indian Point. "But, right now, two gas plants were opened up to compensate for the loss of Indian Point, which has zero carbon emissions. It's kind of hypocritical, right?"

Buchanan faces the loss of some $3.5 million in property taxes that Entergy paid the village while the reactors were still operating.

Business groups fear the thinner energy surplus could impact a factory's ability to deliver goods on time, while driving away companies that are considering relocating.

"The renewable buildout is a multi-decade process," said Ken Pokalsky, the vice president of the Business Council of New York. "It's probably going slower than we would like. Every one of these project is complicated...It would be safe to say it's moving forward. But fast enough is a subjective evaluation."

Nuclear New York wants the state to work with the federal government to encourage and develop new nuclear reactors, which don't produce the nuclear waste that older generation reactors do.

This week, Entergy announced it was partnering with Holtec, the New Jersey company that is tearing down Indian Point, in a deal to build small nuclear reactors. Their plan envisions building one of the first reactors at Oyster Creek, a shutdown nuclear power plant.

And the nuclear group wants New York to continue the subsidies that have allowed the three upstate nuclear power plants to continue beyond 2029.

Schue said other nations have been adopting the next generation of nuclear energy generation into the mix. "We'd like to change that," Schue said. "We'd like to see New York step up to the plate. We've got the skills. We've got the spirit of innovation, we have the manpower."