Aubrey Zibelman came from New York where she was the Chair of the Public Service Commission that presided over the regulation and safety of the electricity, gas, telephone, cable and water system and set consumer rates for electricity. She came to Australia in 2017 to head up the Energy Market Operator (AEMO) to guide our transition to green energy. Leaving New York she said moving toward a system that reduced carbon emissions did not necessarily mean higher costs. “It actually means lower prices if we do it right,” as reported in a revealing story about the New York electricity system.
Recently at a conference at the University of NSW she repeated the mantra “we can have it all” – cheap power, a reliable grid and greatly reduced CO2 emissions – provided that we do it right. Unfortunately doing it right for Ms Zibelman does not mean holding off on solar and wind until the storage problem is handled.
What could Ms Zibelman learn about the problems of a green transition in Australia based on her experience in New York? As the New York story explains the citizens of the state could theoretically draw all their power from natural gas (half their power at present) local nuclear facilities (one third), local hydro (20%) and out of state sources for the remainder.
When you turn on a light or charge your phone, the electricity coming from the outlet may well have traveled hundreds of miles across the power grid that blankets most of North America — the world’s largest machine, and one of its most eccentric.
Your household power may have been generated by Niagara Falls, or by a natural-gas-fired plant on a barge floating off the Brooklyn shore. But the kilowatt-hour produced down the block probably costs more than the one produced at the Canadian border.
The Australian situation is radically different. No nuclear power, nothing like 20% hydro and no connections to any provider outside. It is amazing that New York would want to go seriously renewable but that is the plan, to increase from 25% RE at present to 50% by 2030, dispensing with one of the nuclear facilities and the two remaining coal-fired power stations.
Despite Ms Zibelman’s optimism about the price of going green, just the announcement of the impending shuttering of the coal stations sent the market slightly crazy.
New York’s plan to put the state’s last coal-fired power plants out of business hasn’t even been approved yet and electricity is already trading like they’re shut.
The price of power in 2021 in New York City and other regions surged more than 30 percent beginning in May. The only major difference between then and now: a pending state rule to limit power-plant emissions that was designed to eliminate coal-burning power plants by the end of 2020.
States that are taking more aggressive steps to curb climate change should pay attention to this early reaction. Governor Andrew Cuomo has set a target of getting half of New York’s electricity from renewable sources by 2030, and this is the first time a state has targeted coal by using its regulatory authority to limit carbon emissions. While the plan wouldn’t kick in until 2021, it’s already affecting power markets and shows that these efforts may come with a cost.