POWER May 2017 - 41

POWER MARKETS
4. Deadline. The Indian Point nuclear power plant outside New York City will shut down by
2021 under a deal with Gov. Andrew Cuomo. Courtesy: Tony Fischer
capacity, the station generates almost 12%
of New York's instate electricity, according
to NYISO.
Can the state replace such a significant
chunk of its generating capacity without
jeopardizing reliability? NYSERDA officials
are confident it can, noting that they have several
years to work out the replacement supply,
which could include new high-voltage
transmission to move upstate wind and hydro
south to the New York City market, along
with new gas-fired capacity close to the city.
NYISO officials generally agree, noting that
Entergy has not yet filed a formal notice that
the company was retiring the two units.
In legislative testimony in late February,
NYISO's Jones said, " Within 90 days of receiving
a formal retirement notice, the NYISO
assesses whether any reliability needs
will arise over a five-year period. This analysis
focuses solely on the reliability impacts to
the electric system that could result from the
generators' deactivation. "
Many options are available to replace the
lost nuclear generation, including upstate renewables,
expanded transmission bringing
hydropower from the north, perhaps from
Canada, and much more gas generation.
Gas-Fired Generation. Independent
Power Producers of New York (IPPNY), a
trade group for the nonutility generators,
notes that gas generation close to New York
City is likely to be the immediate beneficiary
of Indian Point shutting down. IPPNY CEO
Gavin Donohue said, " Thanks to the [NYISO]
Lower Hudson Valley Zone, which was
put in place a few years back, 1,000 MW
have come back online in that area, saving
ratepayers $400 million in capacity costs.
And now, because the right market signals
are in place, there are two natural gas facilities-one
at 650 MW and one at 1,000
MW-currently under construction. "
May 2017 | POWER
Manhattan Institute's Bryce makes the
same case. Bryce notes that Cuomo has said
the state must " double down by investing in
the fight against dirty fossil fuels and fracked
gas from neighboring states. " But by closing
the two nuclear units, long on the governor's
to-do list, " Cuomo has virtually assured that
New York will be burning even more natural
gas for electricity generation than it is right
now. Indeed, in 2016 alone, gas-fired electricity
generation in New York increased by
nearly 8 percent, " Bryce said.
The first of the two projects that IPPNY's
Donohue mentioned is a 650-MW, $900 million
gas-fired plant in Wawayanda, some 70
miles northeast of Indian Point. The project
is under construction and expected to be generating
power in 2018. The other plant is the
1,100 MW, $1.6 billion Cricket Valley Energy
Center near Dover, about 80 miles north
of New York City. That project lined up financing
based in part on the anticipated Indian
Point closure. Cricket Valley construction
is scheduled to begin in July, with the plant
in operation in early 2020. Indian Point 2 is
set to close in April 2020 and Indian Point 3
a year later.
An irony in what could turn out to be a
gas boom is that the fuel for the two new
generating projects will be coming from
Pennsylvania, produced by hydraulic fracturing.
Cuomo's antipathy to gas is mostly
political hand waving, notes Bryce. " Between
2005 and 2015 the state's consumption
[of natural gas] increased by nearly 26
percent, according to data from the Energy
Information Administration, " he said. " Over
that same period, the amount of gas being
burned for electricity generation increased
by 56 percent. " ■
-Kennedy Maize is a long-time energy
journalist and frequent contributor to
POWER.
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POWER May 2017

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