The New York Public Service Commission's recently approved Clean Energy Standard, or CES, calls for 50% of New York's electricity to be procured from renewable energy sources by 2030, and creates a zero-emissions credit, or ZEC, framework. The objective of this framework is to preserve the environmental attributes of zero-emission nuclearpowered generating facilities operating within the state. But this step may have broader implications for energy markets, and regulatory constructs nationwide.
Weak demand and abundant natural gas reserves due largely to the shale gas boom have driven down wholesale power market prices, thereby pressuring the economic viability of nuclear plants. Passage of the ZEC framework marks the first time that a state commission has recognized the zero-carbon-emitting attributes of nuclear facilities by adopting a policy to ensure the continued operation of the facilities.
The ZEC framework is expected to have a significant impact on the energy landscape in New York, and once the dust settles from any legal challenges that may ensue, could, further serve as a model for other states with nuclear facilities that are at risk of closing due to cost challenges.