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Nearly 650 MW of New York City peaking capacity will retire to comply with tighter regulations

New York — The owners of 648.3 MW of peak power generation capacity in an around New York City have elected to retire the natural gas- and oil-fired units to comply with stricter air emissions regulations, while approximately 1,300 MW will be retrofitted with pollution-control equipment.

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S&P Global Platts reviewed the compliance plans submitted to the New York State Department of Environmental Conservation totaling 5,482 MW of peaking capacity. The filings were obtained through a Freedom of Information Act Request.

The regulations are officially known as Subpart 227-3, Ozone Season Oxides of Nitrogen (NOx) Emission Limits for Simple Cycle and Regenerative Combustion Turbines.

Power market participants have been anticipating the results of the compliance filings in order to determine how much generation capacity could retire as a result of the rules.

"The elections to retire or retrofit within New York City come as little surprise, as the age of many of these facilities is telling in their decision to retire or to continue to invest," Kieran Kemmerer, power market analyst with S&P Global Platts Analytics, said in an email Tuesday.

NYC Peaker Rule Compliance Filing Data
Power Plant
Capacity (MW)
Compliance Plan
DEC Title V Permit ID
74th Street Station
37.2
Blackstart only by 2023
Not listed
Northport Power Station
16
Blackstart only by 2023
1-4726-00130/00038
Port Jefferson Power Station
16
Blackstart only by 2023
1-4722-00107/00025
59th Street Station
16.8
Blackstart only by 2025
Not listed
Samuel A. Carlson Generating Station
47.3
Existing controls
Not listed
Bayswater/Jamaica Bay Peaking Facility
110
Existing controls
2-6308-00513/00012
Lockport
222
Existing controls
9-2926-00016/00036
Bethpage Energy Center
150
Existing controls
1-2824-00947
Freeport Power Plant
68.2
Existing controls
Not listed
Glenwood Energy Center
106
Existing controls
1-2824-02146/00003
Hawkeye Energy Greenport
54
Existing controls
1-4738-03119/00004
Port Jefferson Energy Center
106
Existing controls
1-4722-04141/00003
Edgewood Energy
100
Existing controls
1-4728-03244/00001&2
Shoreham Energy
100
Existing controls
1-4722-04133/00001&2
Equus Power
50
Existing controls
1-2828-04508/00001
Hell Gate Units 1 & 2
94
Existing controls
2-6007-00724
Harlem River Yards Units 1 & 2
94
Existing controls
2-6007-00726
Vernon Boulevard Units 2 &3
94
Existing controls
2-6304-01377
North 1st Unit 1
47
Existing controls
2-6101-01077
23rd and 3rd Units 5&6
94
Existing controls
2-6102-00482
Pouch Terminal Unit 1
47
Existing controls
2-6402-00295
Brentwood Unit 1
47
Existing controls
1-4728-03067
Glenwood Combustion Turbine Facility 2
55
Install water injection
1-2822-00481/00010
Glenwood Combustion Turbine Facility 3
55
Install water injection
1-2822-00481/00010
Hilburn Gas Turbine Facility
40
Install water injection
3-3926-00059/0003
Shoemaker Gas Turbine Facility
40
Install water injection
3-3309-00040/00004
EF Barrett
294
Install water injection
1-2820-00553/00025
East Hampton Generating Facility
21
Install water injection
1-4724-00345/00004
Wading River Gas Turbine Facility
312
Install water injection/tune existing
1-4722-00108/00020
Kennedy Airport Cogen
50
Not subject to rule
2-6308-000096
Stony Brook Energy Center
47
Not subject to rule
1-4722-02441
Astoria Generating Station
16
Ozone Season Stop
2-6301-00185
Narrows/Gowanus
960
Ozone Season Stop
2-6102-00086 & 2-6102-00116
Arthur Kill
20
Redacted
2-6403-00014/00031
Astoria Gas Turbines
647
Redacted
2-6301-00191/00003
Hudson Avenue Station
32.3
Retire 2023
Not listed
Glenwood Blackstart Facility
16
Retire 2023
1-2824-00490/00014
Ravenswood Generating Station
548
Retire by 2023
2-6304-00024/00035
West Babylon Gas Turbinr Facility
52
Retire by 2023
1-4720-01046/00004
Holtsville Gas Turbine Facility
560
Tune existing water injection system
1-4722-00105/00022
Source: NYSDEC Compliance filings

"That being said, with a sizeable amount of oil-fired capacity retiring, a severe winter could pose challenges, particularly with the known gas deliverability issues to the NYC region, and as a result put upward pressure on power prices," Kemmerer said.

In addition to supporting the power grid in the New York City region during extremely cold weather, peaking capacity could be needed if renewable energy capacity increases in that area.

"Significant amounts of peaking capacity must be retained to compensate for the growing proportion of intermittent renewable sources," Matthew Cordaro, a former Midcontinent Independent System Operator CEO who now resides in New York, said in an email.

"This will be necessary no matter how the pace of adding clean energy facilities may slow because of things like the coronavirus and permitting hurdles or an acceleration in the retirement of traditional steam units," Cordaro said.

BLACKSTART RESOURCES

Several generation units totaling 86 MW of nameplate capacity will be reclassified as "blackstart only" by 2023 and 2025, the dates when the stricter emissions limits go into effect. Blackstart resources are generating units and associated equipment which have the ability to be started without support from the power grid. They are used to restart the system after a power failure.

"Fortunately, over the years many combustion turbines were modified to meet more stringent emission controls. Those that have not can continue to operate as blackstart generators under the new air pollution requirements," Cordaro said.

Approximately 1,600 MW of capacity will be able to meet the tighter emissions limits using existing pollution controls, according to the filings.

The Astoria Generating Company, a subsidiary of Eastern Generation, owns a large share of the pre-1990 peaking units covered by the regulations.

Astoria Generating Company's current plan to comply with the new requirements is to stop burning oil during the summer in 2023 and to stop burning natural gas during the summer in 2025 at the company's facilities in Brooklyn and Queens, said John Reese, senior vice president of Eastern Generation Company.

That could mean having roughly 900 MW less capacity in the summer in addition to the 650 MW that will have retired, which could result in reduced capacity in summer 2023 of about 1,550 MW.

As an alternative, Astoria Generating is considering installing pollution controls which may or may not be economically or logistically feasible and the company has proposed a repowering of its Gowanus facility and a retirement of its Narrows facility, Reese said.

"These retirements also coincide with the implementation of Carbon Pricing in NYISO, which poses substantial upside to power prices in Zones J and K," Platts' Kemmerer said.

"We anticipate battery storage will help replace some of this peaking capacity, given New York's procurements and targets, but will have little impact on prices at the outset with low concentrations of storage/renewables downstate," he said.

The information contained in the compliance plans will also be a key input into the New York Independent System Operator's Reliability Needs Assessment that determines how much power generation is required, and where on the system it is needed to maintain reliability.

The final rule includes a provision that allows the NYISO to designate units to continue to operate on a temporary basis if needed to maintain electric system reliability while a permanent solution is implemented.