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Economy

The Next 2 Years Are Critical for New York City’s Electricity

The city is caught between its energy past and future.

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The Next 2 Years Are Critical for New York City’s Electricity

There’s a reason decarbonization advocates talk so much about power lines. Without them, the fruits of non-carbon-emitting forms of electricity generation, which are often located far away from population centers or are only available when it’s sunny and windy, can’t be fully harvested in the form of electrons flowing to customers when they need them.

The New York state electricity system operator said in a report released Friday that New York City specifically is at risk of a shortfall of 446 megawatts — about enough to power over 350,000 homes — of transmission for nine hours on an especially hot summer day in 2025 when demand for electricity is at its peak.

To those that follow New York state energy planning specifically or, like me, have the sickness that is reading reports from grid operators across the country all the time, the result was not surprising.

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The New York Independent System Operator (New York ISO) chalked up the shortfall to a combination of planned shutdowns of some natural gas plants, called peakers, that switch on when demand is high and can’t be supplied with existing resources, as well as expected growth in electricity demand from both economic growth as well as increased used of electricity for building heat and vehicles.

So far, peakers generating just over 1,000 megawatts have either shut down or reduced their operation, and another almost 600 megawatts of New York City peakers are scheduled to do so in less than two years. This has been a deliberate policy choice by the state. Two plants in the New York City area had their plans for upgrades rejected in 2021; state regulations on nitrous oxide emissions have effectively made several of these types of plants uneconomic to run.

“With the additional peakers unavailable, the bulk power transmission system will not be able to securely and reliably serve the forecasted demand in New York City,” according to New York ISO.

While this may seem like an issue of generation (i.e. producing the power) as opposed to transmission (moving it around), New York ISO projects that this shortfall “is expected to improve” in 2026, when the long awaited and under construction Champlain Hudson Power Express (CHPE), a transmission line that would bring hydropower from Quebec to downstate New York, is scheduled to come into operation.

New York City is caught between its energy past and energy future, and like many areas that are aggressively promoting renewables and retiring existing fossil fuel generation, there is a worry that reliability may suffer in the interim.

The plan is to build out a combination of renewable energy and storage to meet downstate’s needs. This includes massive installations of wind power which will hopefully both directly provide electricity as well as charge batteries which can be used to dispatch power when generation is otherwise falling short. The shortfall between New York's decarbonization goals and its ability to produce carbon-free electricity was exacerbated by the shutdown of Indian Point nuclear power plant in the Hudson River between 2019 and 2021, which corresponded to an immediate uptick in fossil fuel emissions.

Regulators and grid operators across the country have echoed New York ISO regularly, voicing concern about reliability as the renewable buildout runs into barriers of inadequate transmission and delays, while fossil fuel plant shutdowns happen quickly.

But this doesn’t mean that every state or region trying to decarbonize its electricity grid is doomed to blackouts. California is facing a massive heat wave and, at least so far, its grid operator is not expecting any major issues, partially thanks to plentiful hydropower and its massive buildout of energy storage. (It also will likely keep some gas-fired power plants in operation past their original decommissioning date).

And in New England, the grid operator concluded that an expensive terminal for importing liquefied natural gas could probably close in 2025 without imperiling the electricity system (although this depended on there being ample supply of oil for power plants to run in the winter when natural gas is used for heat). Overall, New England, which has been fretting about its energy reliability for years, has turned more optimistic, thanks in part to a substantial buildout of rooftop solar, which reduces demand on the gird.

But the report does raise the question of just how fast the grid can get away from gas in any region in the midst of the energy transition. For example, there are still plans for a new peaker plant in Peabody, Massachusetts, despite a state law with the goal of cutting carbon emissions in half by 2030 and reaching net zero in 2050.

The 2019 rules which are responsible for the peaker shutdowns envision up to four years of extensions “if the generator is designated by the NYISO or by the local transmission owner as needed to resolve a reliability need until a permanent solution is in place.” Whether transmission, wind power, and storage can be built by then is the challenge New York faces.

Read more about power lines:

Here Come the Power Lines

The Canadian Wildfires Ominously Messed Up a Clean Energy Power Line

The Real Climate Defeat in the Debt Ceiling Deal

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Spotlight

A Giant Data Center Offers a Permitting Reform Test Case

What would happen to Project Jupiter if the Bipartisan American Affordability and Jobs Act is passed?

Project Jupiter.
Heatmap Illustration/Project Jupiter, Library of Congress

One of the nation’s largest data centers is struggling under permitting woes. So let’s play a game: would the bipartisan permitting bill in Congress make the path easier, or might the federal legislation be irrelevant to large hyperscalers under development today?

Meet Project Jupiter, a mega project in southern New Mexico in Dona Ana County under development by Oracle and OpenAI, with financial backing from SoftBank and political support from the Trump administration for being a part of Stargate, a major Trump administration public-private initiative boosting AI development. Project Jupiter would be one of the largest data centers in the country if completed and currently is expected to run on a microgrid powered by fuel cells converting gas to electricity, which the developers claim will burn much cleaner than a typical off-grid gas turbine power plant.

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Hotspots

The Trump Administration Is Still Messing with Offshore Wind Farms

And more of the week’s top news around project fights.

The United States.
Heatmap Illustration/Getty Images

1. New England (and Maryland) – The Trump administration is still messing with offshore wind farms, even while trying to pass a permitting reform deal. Examining the court filings reveals why they may feel empowered to do it — and I’m not sure how this ends.

  • Last Friday, in a legal case brought by anti-wind activists, the Justice Department submitted a motion in federal court to send the construction and operations plan for Orsted’s Revolution Wind project in New England back to the Interior Department for more analysis. On Wednesday, the DOJ entered a similar motion in another case challenging the construction and operations plan for U.S. Wind’s MarWin project off the coast of Maryland in a lawsuit brought by the state’s coastal community of Ocean City.
  • Trump’s actions led some to question whether the president was sabotaging the deal, and others to claim the media coverage itself was an attempt to kill it. Going further, supporters of the bipartisan bill claimed the DOJ's motions were precisely why the bill should become law, implying it would guard offshore wind farms against this sort of maneuver.
  • However, for the bill’s backers, it’s worth considering why the Trump administration believes it has the legal authority to do this. It’s also time to ask whether the bill would actually protect these wind farms against this tactic.
  • To answer those questions, you have to rewind. On May 1, 2025, the Interior Department withdrew a Biden solicitor’s opinion instructing the agency to “strike a rational balance” between wind power and fishing interests. This revocation document is technically not in effect at the moment; one year later, a federal court ruled the opinion was potentially illegal as a part of a preliminary injunction on five anti-renewables actions requested by solar and wind trade groups. The Trump administration is contesting that ruling, and the administration has filed a notice of appeal.
  • In August, despite that opinion being in doubt, a federal judge granted Trump permission under the Outer Continental Shelf Lands Act to remand the construction and operations plan for the now-defunct Atlantic Shores offshore wind farm in the waters of New Jersey. U.S. District Judge Jia Cobb specifically wrote that Atlantic Shores failed to demonstrate the federal government had limitations under OSCLA on revisiting these plans and that the injunction from the litigation on appeal “did not prohibit all reevaluation of agency action.”
  • In the recent Revolution and MarWin filings, Trump’s Justice Department argues the construction and operations plans should be remanded under OSCLA without being vacated. The DOJ motions include claims that previous decision documents did not adequately explain impacts to commercial fishing and other industries that use OSCLA waters. It’s not clear if the administration will win these motions.
  • The bipartisan permitting bill would bar the Interior Department and other federal agencies from taking “any new action that would revoke, rescind, withdraw, terminate, suspend, amend, or alter a federal authorization or permit in effect on or after September 16, 2026,” or “any other action to interfere with or prevent the construction or operation at full capacity of a project that has secured all necessary federal authorizations and permits.” The restriction exempts cases where “the agency is required to take such action by order of a court.” As I wrote in our lengthy piece explaining the bill, this provision has a damages component that allows companies impacted by violations to pursue financial compensation.
  • Here’s the billion-dollar question I expect we won’t have answered unless the bill language is enacted and then litigated: Would the court order exception apply to rulings that grant these motions? Or would the developers be able to sue for damages?

2. Columbia County, N.Y. – New York’s renewable energy permitting office has rejected an upstate solar farm on farmland as a House Democrat representing the area joined hands with the Trump administration in publicly railing against the project.

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Politics

Climate Races to Watch This November

These seven elections could change state energy policy.

Watching voting.
Heatmap Illustration/Getty Images

No matter how well Democrats do in the House and Senate in November, it’s unlikely to mean anything new on climate policy in Washington, D.C., for as long as Donald Trump remains in the White House.

That is not true when it comes to the other elections this year.

Several states are on the verge of a possible Democratic trifecta, meaning unified control of both chambers of the state legislature and the governor’s mansion. It’s a position that could enable such states to either top off existing climate and energy policies passed in the last decade or to make the first real run at climate legislation in recent history.

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