Climate Change Impact Phase II An Assessment of Climate Change Impacts on Power System Reliability in New York State FINAL REPORT Authors: Paul J. Hibbard Charles Wu Hannah Krovetz Tyler Farrell Jessica Landry September 2020 Draft August 18, 2020 Draft September 2, 2020 Climate Change Phase II September 2020 Acknowledgments This report has been prepared at the request of the New York Independent System Operator (NYISO), and presents an assessment of the potential impacts on power system reliability in 2040 associated with system changes due to climate change and policies to mitigate its effects. Our work benefitted significantly from input and comment from the NYISO and its market participants and stakeholders. About the Authors Paul Hibbard is a former Chairman of the Massachusetts Public Utilities Commission, and has held positions in both energy and environmental agencies in Massachusetts. During his tenure on the Commission, Mr. Hibbard served as a member of the Massachusetts Energy Facilities Siting Board, and has testified before Congress, state legislatures, and federal and state regulatory agencies. Mr. Hibbard is now a Principal in Analysis Group’s Boston office, and has public and private sector experience in energy and environmental technologies, economics, market structures, and policy. Charles Wu, a Manager in Analysis Group’s Boston office, is an expert in the assessment and design of wholesale electricity markets in Northeastern U.S. power market regions. Mr. Wu’s work has included review and analysis of generating unit performance in and design parameters affecting capacity and energy markets in New England and New York; the development of power market models to evaluate unit performance and profitability; and the assessment of changing infrastructure and public policy on economic, consumer and environmental impacts through economic and production cost modeling. Hannah Krovetz is a Senior Analyst in Analysis Group’s San Francisco office, with experience in the application of economic analyses to challenges in energy and environmental markets and policy. Ms. Krovetz has focused in recent years on technical analysis and systems modeling related to power sector market design, power system reliability, and energy/climate policy matters. Tyler Farrell is an Analyst in Analysis Group’s Boston office, with background in evaluating the economic and financial aspects of electricity generation from both individual business and system operator perspectives. Mr. Farrell has focused in recent years on the design and implementation of models to evaluate wholesale market and reliability outcomes in the electric sector. Jessica Landry is an Analyst in Analysis Group’s Boston office, with background in the application of econometrics to the evaluation of international monetary issues, higher education, and antitrust/competition matters. Ms. Landry has recently focused on the emergence of the offshore wind sector in the Eastern U.S., and the refinement of power system modeling data and logic. About Analysis Group Analysis Group is one of the largest international economic consulting firms, with more than 1,000 professionals across 14 offices in North America, Europe, and Asia. Since 1981, Analysis Group has provided expertise in economics, finance, health care analytics, and strategy to top law firms, Fortune Global 500 companies, government agencies, and other clients worldwide. Analysis Group’s energy and environment practice area is distinguished by expertise in economics, finance, market modeling and analysis, regulatory issues, and public policy, as well as deep experience in environmental economics and energy infrastructure development. Analysis Group has worked for a wide variety of clients including (among others) energy producers, suppliers and consumers, utilities, regulatory commissions and other federal and state agencies, tribal governments, power‐system operators, foundations, financial institutions, and start‐up companies. Analysis Group, Inc. Climate Change Phase II September 2020 Table of Contents I. Executive Summary 6 Background and Approach ........................................................................................................................... 6 Results and Observations ............................................................................................................................. 8 II. Analytic Method 16 Overview of Analytic Method .................................................................................................................... 16 Framework for Energy Balance Analysis .................................................................................................... 18 Construction of Seasonal Modeling Periods and Load Scenarios .............................................................. 19 1. Load Scenarios ........................................................................................................................................... 19 2. Seasonal Modeling Periods ........................................................................................................................ 20 Construction of Resource Sets by Load Case ............................................................................................. 21 1. Retention of Baseload Resources .............................................................................................................. 22 2. Renewable Resources (CARIS Starting Point) ............................................................................................ 23 3. Renewable Resource: Additions to 2040 ................................................................................................... 24 4. Imports from Neighboring Areas ............................................................................................................... 25 5. Modulation of EV Load Shape.................................................................................................................... 26 6. Increase in Inter‐zonal Transfer Capability ................................................................................................ 28 7. Energy Storage Resources ......................................................................................................................... 29 8. Price Responsive Demand ......................................................................................................................... 32 9. Dispatchable and Emissions‐Free Resource .............................................................................................. 32 10. Resource Set Summaries ........................................................................................................................... 34 Representation of Electric System Operations .......................................................................................... 36 1. Transfer and Dispatch Logic ....................................................................................................................... 36 2. Use of Dispatchable and Emissions‐Free Resources .................................................................................. 36 Comparisons with Grid in Transition Resource Sets .................................................................................. 36 IV. Cases Analyzed: Combinations of Load Scenarios and Physical Disruptions 38 Physical Disruptions: Interruptions of Resources and Transmission ......................................................... 38 1. Temperature Waves .................................................................................................................................. 38 2. Wind Lulls .................................................................................................................................................. 42 3. Storm Scenarios ......................................................................................................................................... 45 4. Other Climate Impacts ............................................................................................................................... 49 Construction of Combination Cases ........................................................................................................... 49 V. Output Metrics 51 Model Output ............................................................................................................................................. 51 Analysis of Outcomes ................................................................................................................................. 56 VI. Results and Observations 57 Overview .................................................................................................................................................... 57 Baseline Scenario Results ........................................................................................................................... 57 1. A Note About Starting Point Resource Sets ............................................................................................... 57 2. Aggregate Load/Generation Balance ......................................................................................................... 59 3. Peak Hour Patterns .................................................................................................................................... 63 4. Ramping Patterns .....................................................................................................................................