Dive Brief:

• The New York Department of Environmental Conservation (DEC) said Wednesday it has rejected Title V air permit applications for NRG Energy's proposed Astoria Replacement Project and Danskammer Energy LLC's planned Danskammer Energy Center.
• The DEC said the proposed natural gas-fired power plants, totaling nearly 1 GW, are inconsistent with New York's 2019 climate law, which requires major reductions in carbon emissions and additions of renewable energy in the coming years. The department rejected the cases made by NRG and Danskammer as to why the plants would comply with the law.
• Environmental groups called the decision "precedent-setting" and urged state officials to reject other pending natural gas projects in the state while industry stakeholders said DEC's actions were "short sighted." NRG and Danskammer Energy now have 30 days to appeal the DEC's decision and request an administrative adjudicatory hearing. 

Dive Insight:

New York's 2019 Climate Leadership and Community Protection Act (CLCPA) requires the state to reduce statewide greenhouse gas (GHG) emissions 40% below 1990 levels by 2030, and 85% below 1990 levels by 2050. The law also requires that 70% of the state's electricity be renewable by 2030 and 100% be emissions-free by 2040.

NRG Energy and Danskammer Energy put forth several reasons as to why their proposed projects meet the requirements of the 2019 climate law, including the fact that they would have lower emissions than the plants they would each be replacing. Both companies also cited the potential future use of renewable natural gas and hydrogen to make the case for a lower environmental impact.

But the DEC rejected their arguments.

The projected emissions from each plant would be "inconsistent with the achievement of the statewide GHG emission limit for 2030, or at a minimum would interfere with the attainment of such statewide GHG emission limit, especially given that achieving such limit requires a substantial overall reduction in GHG emissions," the DEC said in separate but similar letters on Wednesay rejecting the Title V permit applications.

"To achieve the state's climate change and clean energy policies as outlined in the CLCPA, the state needs to continue to accelerate its ongoing transition away from natural gas and other fossil fuels. Constructing and operating a new fossil fuel-fired power plant accomplishes the exact opposite and perpetuates a reliance on fossil fuels," each letter said.

In addition, with respect to using renewable natural gas or hydrogen as a potential compliance pathway, neither proposed project has "established its feasibility from either a supply or GHG emission perspective," the DEC said.

In addition, the DEC said neither project had shown it was needed for short or long term reliability needs, notwithstanding the climate law's emission reduction requirements. Also, neither project demonstrated adequate alternatives or GHG mitigation measures, the DEC said.

This is the first decision regarding air permits to directly cite the 2019 climate law, POLITICO reported.

New York Gov. Kathy Hochul, D, applauded DEC's move to deny the permits "in the context of our state's clean energy transition" while Democratic State Sen. Michelle Hinchey (SD-46) called the decision "nation-leading."

Environmental groups called the DEC's decision "precedent-setting" and urged similar actions regarding other natural gas projects.

"Governor Hochul's decision strikes a critical blow to the fossil fuel industry, providing a huge victory for New York's climate movement. She is showing the nation what real climate leadership looks like. The next step is for Governor Hochul to commit to halting all fossil fuel infrastructure, including the North Brooklyn pipeline and the Gowanus power plant," Food & Water Watch Northeast Region Director Alex Beauchamp said in a statement.

Danskammer Energy submitted a Clean Air Act Title V air permit application on Dec. 3, 2019, for a 536 MW plant in the town of Newburgh in New York's Hudson Valley. Astoria Gas Turbine Power, a wholly owned subsidiary of NRG Energy, submitted its application on April 27, 2020, for a proposed 437 MW facility in Astoria, Queens County. Both projects would replace existing plants.

Danskammer did not respond to a request for comment by press time. NRG Energy called the DEC's decision "short-sighted." 

NRG Energy "is reviewing the state's decision," Vice President of Development Tom Atkins said in a statement.

"Denying projects like Astoria is simply short-sighted and bad public policy, especially against the backdrop of NYISO's most recent analysis showing that the impacts of significant weather events could ‘result in deficiencies to serve demand in New York City' as early as 2023," he said.

"NRG's Astoria Replacement Project would have provided immediate reductions in greenhouse gas emissions and would have been fully convertible to green hydrogen in the future," he continued.

"Our current Astoria plant will continue to operate for another 18 months until we are forced to shut down under current law," he added.

Independent Power Producers of New York President and CEO Gavin J. Donohue called the DEC's decision to deny the permits "bad public policy," saying it "sends a chilling signal that the business climate needed to develop technologies is at risk.

"Contrary to the DEC's statements, the denial of these repowering permits is inconsistent with the progress needed to achieve the CLCPA's targets over the next 20 years. Projects, such as Danskammer and Astoria, displace significant emissions from existing resources while ensuring that New York City and the rest of the state can maintain reliability while the energy system transitions to a low carbon future," he said.