New York — The New York Independent System Operator’s five-year power grid plan sets out six strategic initiatives to guide its projects and resource allocation that include pricing carbon emissions into the wholesale market, which could increase power prices by about $10-$15/MWh, an analyst said Wednesday.
“Our updated Strategic Plan is a living document that embraces the challenges and opportunities of the grid’s ongoing transformation,” NYISO interim President and CEO Robert Fernandez said in a statement Tuesday.
“The plan reflects the NYISO’s essential role in harmonizing public policy with technological innovation in a manner that delivers economically efficient and reliable energy to consumers,” Fernandez said.
Integrating public policy into NYISO-administered wholesale markets often refers to the grid operator’s ongoing carbon pricing efforts, an initiative that could go into effect in the second quarter of 2021, NYISO has said.
“The carbon prices being discussed for implementation in New York are significantly higher than the current [Regional Greenhouse Gas Initiative] RGGI prices,” Manan Ahuja, senior director of North America power modeling at S&P Global Platts Analytics, said in an email Wednesday.
If implemented, the carbon prices could add significantly to the wholesale power prices, increasing location-based marginal prices “by about $10-$15/MWh (in the proposed carbon price vs the RGGI price) based on our recent modeling,” Ahuja said.
Such changes would also impact decisions about what type of supply resources get built or retire, he added.
The strategic plan is based on the NYISO board of directors’ review of financial and regulatory outlooks, as well as the economic and environmental factors affecting market participants and stakeholders, the grid operator said in a statement Tuesday.
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