Utility Dive•15 days ago
New York targets power sector carbon allowances in proposed climate regulations
Key Takeaway
New York's aggressive carbon allowance reduction will drive up costs for fossil fuel generation and accelerate the transition to renewables, creating both challenges and opportunities for power sector participants.
AI Summary
- •New York is proposing new regulations to significantly reduce the annual budget of CO2 allowances for the power sector through 2037.
- •This policy change will likely increase the cost of carbon emissions, making fossil fuel-based generation more expensive and potentially impacting wholesale electricity prices.
- •The tightening carbon budget, including its effect on voluntary renewable energy purchases, signals a stronger market push for zero-emission generation (solar, wind, storage) and associated Power Purchase Agreements (PPAs) in New York.
- •Developers should anticipate increased demand and incentives for renewable energy projects, while large power consumers and IPPs with fossil assets should prepare for higher compliance costs and a faster transition to cleaner energy sources.
Topics
capacity-marketemissionspolicyppasolarstoragewind