New York saw successes, setbacks to climate goals in 2024

New York's ambitious energy transition is entering a critical year, following a 2024 that saw the state make progress in offshore wind and even initiate discussions about reviving nuclear energy.

"There are a number of concrete steps the state must take to accelerate renewable energy deployment, including increasing the ambition of both onshore and offshore renewable solicitation and addressing residual financial and practical challenges, such as ensuring workable tax assessments and modifying regulations regarding transport of turbines," Sierra Club spokesperson Renner Barsella told S&P Global Commodity Insights.

Successes, setbacks

The Empire State aims to source 70% of its electricity from renewable sources by 2030. However, a July draft report from the New York State Energy Research and Development Authority (NYSERDA) and New York Department of Public Service casts doubt on the state's ability to reach the goal, largely due to supply chain pressures and inflation.

Even with the sobering report, environmental groups and NYSERDA said New York has made significant progress toward its emissions reduction goals.

The state is excited about the continuing work on the Champlain Hudson Power Express Project, a 339-mile transmission project designed to carry hydropower from Hydro-Québec into New York City, NYSERDA spokesperson Theresa Smolen said in an email. The project is slated to come online in 2026.

However, NYSERDA and the developer of a 1,300-MW transmission line designed to carry renewable energy to New York City recently announced that they terminated the project's Tier 4 Renewable Energy Certificate (REC) Purchase and Sale Agreement. The Clean Path NY project combined a 175-mile underground transmission line with 3,800 MW of renewable energy projects in upstate New York.

Gov. Kathy Hochul approved the project, alongside the 1,250-MW Champlain Hudson Power Express transmission project, in November 2021, at the time touting the Clean Path NY line as key to the state's renewable deployment goals.

Barsella also pointed to the New York Power Authority's plan to procure 3.5 GW of new renewables as one of the "reasons to be hopeful."

Looking ahead to 2025, the Sierra Club is focused on passing the NY Home Energy Affordable Transition Act legislation to phase out natural gas use in the state, which divided New York lawmakers in 2024, Barsella said.

Offshore wind uncertainty

The state's offshore wind industry had a turbulent year as it dealt with persistent structural macroeconomic issues hampering development. New York is aiming to build 9,000 MW of offshore wind by 2035.

"If you go back to the summer, it was a slightly different environment in the sense that we were in that moment where we were really seeing the very worst of the intersection of higher interest rates and supply chain issues coming to the fore together," Eamon Nolan, a partner at Vinson & Elkins LLP who specializes in financing renewable energy projects, said in an interview.

In April, New York authorities canceled the results of an offshore wind solicitation awarded in fall 2023 due to GE Vernova Inc.'s decision to halt production of a larger wind turbine that winning bidders had planned to use.

Six months later, National Grid PLC and RWE AG rebid their 2,800-MW Community Offshore Wind Project joint venture, which had been canceled in April due to the turbine decision.

Despite the hiccups, the New York offshore wind market remains appealing to investors, Nolan said.

"Our house view has always been that New York is probably the most attractive market in the US to be doing offshore wind. It's got its own ISO, which obviously means you have a significant amount of control within the state itself and the state is indicating that this is an industry they want to be focused on and pursue," Nolan said.

New York has "the most robust queue of offshore wind development in the country," NYSERDA's Smolen said, adding that the state's 924-MW Sunrise Wind and 810-MW Empire Wind 1 projects, which are both expected to come online in 2026, will power over 1 million homes.

Ørsted A/S began construction on the Sunrise Wind project in July. While the state's offshore wind build-out is beginning to take shape, the changing federal regulatory environment presents new uncertainty.

President-elect Donald Trump has been an outspoken critic of offshore wind. Nolan said it remains to be seen how far the Trump administration will go to stop the industry's growth and at what stage of development or construction certain projects could be affected, but regulatory processes that require federal involvement may slow down.

In November, TotalEnergies SE Chair and CEO Patrick Pouyanné indicated the company would be pausing development of its New York offshore wind projects due to the incoming Trump administration.

Nuclear possibilities

As the Hudson Valley's Indian Point nuclear plant was retired in 2021, the combination of expected new load growth and the state falling behind on its renewable energy goals led to some discussions in 2024 about New York investing in new nuclear generation.

"As local, national and international companies pursue nuclear energy for their on-site energy needs and the federal government signals interest in investing in this resource, we recognize that now is the time to position New York to fully engage this new sector that can drive significant economic development," NYSERDA President and CEO Doreen Harris said in a November statement.

Hochul has indicated some openness to expanding nuclear's role in the state's energy transition, especially as New York looks to attract large-load projects, such as datacenters. In September, NYSERDA released a draft report exploring nuclear technology in the state.

"Studies identify a critical need in the path to a zero emissions grid in New York: controllable clean electricity technologies that can reliably meet the demand for power throughout the year, even when onshore and offshore wind and solar energy are less available," the draft report said.

Following the draft report, NYSERDA put out a request for information seeking to identify entities interested in developing nuclear solutions for the state. James Walker, CEO and director of NANO Nuclear Energy Inc., told Commodity Insights that the company plans to pursue nuclear development opportunities in New York. NANO Nuclear Energy produces microreactor technology.

"What we're doing is we're examining replacement nuclear technology that could be inserted at the same location as Indian Point because it's already been licensed. It's already got an infrastructure that sets up for that kind of technology and facility," Walker said.

In August, New York Senate Republicans introduced a bill designed to explore reopening the Indian Point nuclear plant.

Walker said that if the state starts now, the company could have power installations close to being fully installed by around 2030. Walker added that the Trump administration's pro-nuclear stance could entice states to turn toward nuclear.