Reports & Analysis

Electricity Outlook

Electricity Outlook 2017: Powering New York City's Future


The Electricity Outlook to 2027


In March 2015, the New York Metropolitan Transportation Council (NYMTC) forecast that New York City's population will reach 8.7 million by 2025, an increase of 160,000 from the Census Bureau's estimate for 2016. NYMTC expects that employment in the city will continue to grow through 2025, adding 166,000 total jobs, including self-employed workers. The rate of job growth in the 2015-2020 period is forecast to be 0.5 percent per year, well under the rate of growth during the 2009-2016 recovery period. NYMTC predicts that employment growth will slow further – to 0.2 percent per year – between 2020 and 2025.

According to the New York Building Congress' three-year forecast for the years 2016 through 2018, total construction spending will remain strong in 2017 and 2018. The Building Congress estimates that 11.6 million square feet of office space will be constructed within 22 ground-up office development projects in Manhattan alone over the 2016-2018 period, and the forecast calls for 27,000 new residential units in 2017 and 25,000 new residential units in 2018.

 

Forecast of Electricity Demand and Supply

Annual energy consumption in New York City is expected to decline from 52.5 Terawatt-hours in 2016 to 50.6 Terawatt-hours by 2027, a decrease of just under 0.4 percent per year over the forecast period. This forecast reflects ongoing and expected changes in achieved levels of energy efficiency and includes estimates of the future contributions to supply from alternative sources, such as behind-the-meter solar PV and distributed generation.

Source: NYISO's 2017 Load & Capacity Data "Gold Book"

 

NYISO's forecast for summer peak demand in New York City from 2016 through 2027 suggests an increase of 1,798 MW in summer peak demand usage by 2027, before energy efficiency and other measures, for an annual growth rate of .48 percent. Including the estimates for energy efficiency, solar PV, and distributed generation (DG) and other behind-the-meter measures, summer peak demand would be 12,040 MW, an increase of 0.33 percent per year over the forecast period.

NYISO estimates that 726 MW can be deducted from the unconstrained forecast of summer peak demand of 12,788 MW in 2027, based on achievements by that year in energy efficiency measures, such as improved energy appliances, which will contribute savings of 283 MW; increases in solar PV, which will contribute 192 MW of electricity to the city's system; and distributed generation and other behind-the-meter measures, which will contribute 247 MW of power.

If fully achieved, these energy savings could help address, but would not entirely offset, the expected increases in electricity demand and the supply gap resulting from the scheduled closure of Indian Point in 2021. To close that gap and meet expected demand, additional electricity supply is also needed.

Other than 24 MW of upgrades by Con Edison to their existing plant in New York City, there are no new generating facilities or new transmission systems planned for New York City during this 2017-2027 period.

The only near-term generation facilities in construction or in planning are outside of New York City. A new 650 MW natural gas plant, CPV Valley in Orange County, is under construction and targeted for completion in 2018; and a recently announced 1,100 MW natural gas plant, Cricket Valley in Dutchess County, is estimated for completion in mid-2019.

 

Forecast of Natural Gas Demand and Supply

National Grid forecasts that demand for natural gas for its Brooklyn Union territory will increase by 0.84 percent per year in the 2015-2020 period, and by 0.86 percent per year in its subsequent five-year forecast period.

In its March 2016 Gas Long Range Plan, Con Edison forecasts that demand for natural gas throughout its territory will increase by 2.3 percent per year in the 2015-2020 period, and by 1.5 percent per year to 2035. Much of the increase is stimulated by continued oil-to-gas conversions in large buildings, by demand for new CHP projects, and increased consumption from new residential and commercial projects. As a result, Con Edison states that new pipeline capacity will be necessary.

One request for upgrade and three major new projects for natural gas pipelines are at the final permitting or early proposal stage.

  • Millennium Pipeline has filed with FERC for an upgrade to its Eastern System, which would add about eight miles of pipeline in Orange County, New York, and supply an additional 233,000 DT/day to the New York area by the fall of 2018.
  • The PennEast Pipeline, a 114-mile, 36-inch diameter project, will bring Marcellus shale gas in Eastern Pennsylvania to an interconnection with Transco in Mercer County in New Jersey. This will supply one billion cubic feet/day for many shippers, including Con Edison. Service is expected to begin in the second half of 2018.
  • The Mountain Valley Pipeline (MVP) is a proposed 300-mile, 42-inch diameter capacity line from West Virginia to the mid-Atlantic region. Although this pipeline does not directly connect into New York City, it allows access to different supply points, including for Con Edison. If fully permitted, the MVP is expected to be in service by late 2018.
  • Transco filed an application for its Northeast Supply Enhancement project with FERC on March 27, 2017. This project will deliver an additional 400,000 DT/day to National Grid's distribution system at Floyd Bennett Field via the Rockaway Lateral. The project is expected to be in service in late 2019.

While the first three of these projects would provide greater diversity of supply as well as better price differentials, only the most recent Transco project would bring added natural gas into New York City, where the demand exists and is growing. As a result, Con Edison believes that new gas pipeline capacity into New York City and Westchester County will still be necessary within the 2017-2027 forecast period.

 

Con Edison forecasts that demand for natural gas throughout its territory will increase by 2.3 percent per year in the 2015-2020 period, and by 1.5 percent per year to 2035

 

Transmission Forecast

There are no plans for substantial new investments in transmission to bring electricity into New York City. Without improvements designed to alleviate congestion in existing sources of downstate transmission and new investments in transmission capacity, Downstate New York and New York City will not be able to access any of the new investments in hydropower and solar and wind power emanating from Upstate and Western New York.

In its October 2016 Long Range Transmission Plan, Con Edison notes that "The uncertainty of proposed developer projects [new transmission and generation] reaching commercial operation would make planning the future system topology a challenging and evolving task".13

The NYC Mayor's Office of Sustainability, in a public letter to NYISO on September 30, 2016, makes a persuasive case for new transmission lines to New York City so that the city can participate in renewable wind, solar and hydro resources in Upstate New York and in Canada. This is considered vital for the city's long-term electricity needs as well as for achieving its goals of using renewable energy to reduce carbon emissions.14

The need for new transmission capacity in Western New York and across New York State was recognized by the NYS PSC in a press release of October 13, 2016, and "directed [NYISO] to move forward with evaluating and selecting the most efficient or cost-effective transmission project to make it easier for renewable energy such as hydro power, to flow across New York State."

NYISO, through its Public Policy Transmission Planning process, is examining potential transmission upgrades to address transmission chokepoints in the mid-Hudson Valley, but it has not yet announced any firm plans for new investment or a determination on the additional megawatts that would be made available through improved transmission.

Two major proposals for transmission investment into New York City offer promise of a substantial increase of electricity to New York City by or before 2027.

  • The Champlain Hudson Power Express is a 330-mile HVDC submerged cable project below Lake Champlain and the Hudson River that could deliver 1,000 MW of renewable energy from Québec to Astoria, Queens. This project has been fully permitted and is currently finalizing engineering details.Construction could start in 2017 and the transmission line could be in service by late 2021.15
  • The proposed Empire State Connector, a 260-mile HVDC submerged cable project below the Erie Canal and the Hudson River and terminating in either Brooklyn or the Bronx, would deliver 1,000 MW from renewable sources. This proposal is in active planning with final permitting still in progress. oneGRID, the developer, plans to file Article VII with the NYS PSC in the autumn of 2017.16

If completed, these two projects would supply 2,000 MW of electricity directly to New York City and count as "in-city generation" because each uses direct current (DC), rather than alternating current (AC), for transmission. Importantly, they also would enable the city to benefit from investments in renewables being made to the north of its borders.

 

Major Technological Breakthroughs in Transmission Outside of New York State

New York State and City are lagging other areas in terms of planning for transmission facilities.

For example, the proposed Plains and Eastern Line in the Southwest would carry 4,000 MW of wind power electricity from the Oklahoma panhandle to the Tennessee Valley Authority. This transmission system would use direct current (DC) with enough energy to power more than one million homes in the mid-south and southeastern United States.

Several such "supergrids" carrying DC power with the capacity of 6,400 to 7,200 MW have already been built in China. Several other major projects in China are already underway or in planning, including a 3,400 km grid carrying 12,000 MW of DC power from Xinjiang to Anhui province. Similar large scale grids are under construction or in planning in India, Brazil, and in Germany.17

 

One of the remaining challenges in providing electricity from intermittent sources, such as solar or wind, is the issue of storage, which allows power to be made available during off-hours.

 

13 Con Edison, Long-Range Transmission Plan (2016), p. 2.

14 Kevin Lang, Couch White LLP, and Anthony J. Fiore, Energy Regulatory Affairs, NYC Mayor's Office of Sustainability, letter to Zachary Smith, NYISO, Sept. 30, 2016.

15 NYS PSC, Case 10-7-0139, Order Granting Champlain Hudson Express Inc. a Certificate of Environmental Compatibility and Public Need to Construct and Operate a Transmission Project (April 18, 2013).

16 oneGRID. (July 5, 2016). Empire State Connector "HVDC" Transmission Project Receives FERC Approval to Charge Negotiated Rates [Press release]. oneGRID project update to New York Building Congress, Feb. 28, 2017.

17 "Rise of the Supergrid," The Economist (Jan. 14, 2017), pp. 71-72.

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