New York may allow clean power projects to die

 ALBANY — Nearly two dozen of New York’s clean energy projects may be scrapped because they are financially impractical, a possible outcome that would exacerbate the state’s struggling efforts to meet increasing power demands while also ensuring the electric grid becomes less dependent on fossil fuels. 

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The stalled wind and solar projects would power roughly 2 million homes, but the developers want to renegotiate state contracts to reflect tariffs and rising labor costs not factored in when their deals were struck between 2023 and early 2025. Without more revenue, the projects won’t be economically viable and will need to be canceled, according to a trade organization representing them. 

 

The New York State Energy Research Development Authority has informed the developers it will only allow them to move forward under the terms of earlier agreements.

 

The authority “expects its developers to honor their commitments,” spokeswoman Deanna Cohen said. “The competitive bidding process is designed to protect consumers and result in fair and cost-effective contracts.”

 

The standoff is unfolding as Gov. Kathy Hochul is trying to convince the Legislature to amend the mandates of New York’s 2019 Climate Act, citing what her administration said could be crippling energy price hikes in the coming years. Reducing fossil fuel reliance will save households money as natural gas and oil remain expensive, environmental activists contend. They have also countered that the mandates can still be met, in part, by accelerating the state’s build-out of renewable power projects. 

 

The Public Service Commission — which regulates New York utility companies — already said last year it wouldn’t be able to reach a requirement to supply 70% of the electric grid with renewable energy by 2030. The commission pegged the possibility of reaching that milestone as more likely in 2033.

The battle between the energy developers and the state is a reversal from 2023, when the Alliance for Clean Energy New York, a trade group representing 90 projects, requested higher rates as inflation and supply chain issues were raising construction expenses. The developers were allowed to bid again for a future contract, an opportunity they’re not being afforded now. 

 

“The state is being myopic and narrow-minded in not allowing them to rebid because it certainly will lead us to be even more addicted to fossil fuel costs, and that’s a bad policy,” said Adrienne Esposito, executive director of the Citizens Campaign for the Environment, a Long Island nonprofit. 

 

Higher prices for imported Canadian steel, an important component for wind turbines, are “going to hurt,” said Ryan Chahrour, an economics professor at Cornell University.

 

But determining whether developers are justified in seeking amended financial terms is still “very hard,” Chahrour went on. 

 

That’s largely because President Donald J. Trump’s tariffs frequently change — making it difficult to estimate their impact at any given time — but have largely been less consequential than initially anticipated. 

 

The tariffs “were half as big as the president originally announced, and so the good and the bad of these tariffs are about half as big as well,” Chahrour said.

 

For some, developers’ unwillingness to move forward with certain projects is another example of why the state should be building energy projects, not private industry.

 

Around 60% of large-scale wind and solar farms that have received contracts from the energy authority have been canceled, according to 2025 research from Potomac Economics, which studies New York’s grid. 

 

“New York can’t afford to keep gambling our energy system on private sector profits,” said Alex Patterson, a campaign coordinator for Public Power NY. The next state budget, which is being negotiated, should fund more publicly owned clean energy, Patterson added.

 

If the projects are canceled, it may raise energy costs in the long run because up to $9 billion in federal tax credits they received will not be applied to building additional power sources in New York, according to Marguerite Wells, executive director of the alliance, which represents renewable energy developers.

 

There are only a finite amount of tax credits available — which generally make up about 30% of a project’s financing — because congressional Republicans voted to phase them out in the One Big Beautiful Bill Act last year.

 

If builders can’t move forward in New York, they may divert their federal tax credits to financially viable developments elsewhere and future projects in the state will become significantly pricier, according to Wells.

 

“Can we please just capture the federal tax credits before they go away? ,” Wells said. “That’s thing one, that’s money for New Yorkers or money lost by New Yorkers.”  

 

Megawatts of proposed clean energy projects 

 

1,000 megawatts of energy can power roughly 750,000 homes

 

Chart: Ezra Bitterman/Times UnionSource: New York State Energy and Research Development Authority

Power boom

Getting more energy on the distribution system fast is increasingly important as New York’s grid starts to face strain from myriad challenges.

That includes the Public Service Commission last year upping its projections for electricity demand in 2030 by nearly 10%.

 

“We’re retiring more (energy plants) than we’re adding, (which) really puts us in a precarious situation,” said Richard Dewey, president and CEO of the New York Independent System Operator, which manages the state’s grid.

 

New demand on the system is growing in part by design: More homes and vehicles are electrifying as the state pushes to reduce greenhouse gas emissions.

 

“Much of the load growth is driven by the beneficial electrification of transportation and buildings, which contribute to achieving the state’s emission reduction goals, but increase the amount of renewable (energy) needed on the grid,” the commission wrote last year.

 

A renaissance of domestic manufacturing in the state is creating jobs but also driving huge power needs.

 

Data centers to train artificial intelligence are projected to use 9% to 17% of U.S. electricity by 2030, according to the Electric Power Research Institute, a California-based firm. New York is an emerging hub for these facilities because of the access to clean energy upstate from hydroelectric dams and nuclear power plants. 

 

In addition, the electricity that large power users are asking for in the coming years has nearly doubled since July, according to the independent system operator.

 

It’s tricky to determine how much electricity New York will end up needing because much of what’s proposed may never materialize. Developers enter the queue in numerous places to see what areas have ample grid infrastructure to meet their immense distribution requirements. 

 

For example, a massive data center with the electricity demand of a nuclear power plant is being proposed in East Fishkill, a town in Dutchess County. Thomas Franco, a Town Board member, said he had never heard of the project. 

 

Grid reliability challenges are most acute in New York City, where aging fossil fuel plants are the predominant electricity source. That reliance has only grown since Gov. Andrew M. Cuomo shut down Indian Point, a nuclear power plant in Westchester County, in 2021. It provided roughly 25% of downstate New York’s power when it was in operation. 

 

‘Not rocket science’

A soon-to-be operational transmission line carrying hydropower from Quebec to New York City and several offshore wind farms will improve reliability over the next few years, according to the independent system operator. 

 

But as fossil fuel facilities — some more than 70 years old — start to shutter, reliability issues will emerge downstate. 

 

New York needs investments in renewable energy but also “cutting-edge, reliable natural gas technology that can replace old, polluting turbines that are well beyond their intended operational lifetime,” Emilie Nelson, executive vice president and COO at the independent system operator, wrote in an op-ed.

 

Several downstate natural gas generators have announced plans to modernize their plants, which lowers emissions and increases reliability but faces obstacles as affordability challenges remain.

 

GE Vernova, a leading natural gas component producer, is expecting to sell out its new turbines through 2030 as orders skyrocket across the country. Prices for turbines have also risen nearly 50% over the past six months, according to UtilityDive.

 

Electricity prices in New York were 50% greater than the national average this January, according to the Energy Information Administration. 

The winter price spikes were largely because of rising natural gas prices, the Independent System Operator wrote in a white paper. 

 

With new energy supply slow to enter the grid, “older and more costly generators are being dispatched more frequently, resulting in higher wholesale prices,” the paper continues. 

 

Even if those older gas plants were modernized they would still wrestle with fuel costs, which are projected to remain stubbornly elevated. Natural gas and oil prices are expected to be higher this year than they were in 2025, according to the Energy Information Administration. 

 

Any new gas turbines would likely have to shut down by 2040 under the 2019 Climate Act’s requirement for the grid to be made up of 100% clean energy by then. That impending deadline gives a very short window for developers to recoup their investment in those facilities before facing a legal obligation to close under the Climate Act. 

 

The Public Service Commission has the authority to temporarily amend or suspend the 2040 requirement, which would provide regulatory leeway. The commission opened public comment on a proceeding to potentially do so, but no final decision has been made. 

 

It’s unclear whether Hochul would support extending the life of natural gas plants, even though energy sector stakeholders say that is a viable option that would also result in those plants being refurbished to produce less emissions. The governor is open to energy sources “that meet applicable state and local laws,” her spokesman Ken Lovett said.

 

Hochul, as part of her “all-of-the-above” energy approach, has prioritized building new nuclear power plants that could provide steady clean power to the grid but also will take a decade or more to come online. Hochul has also been insistent that the plants be built upstate, which means they won’t do much to help New York City unless large infrastructure upgrades are made so that electricity can be delivered downstate. 

 

Right now, natural gas plants fill in the gaps on New York’s grid. They can be quickly ramped up to provide electricity at times of peak demand. They can also be dialed down during times of the day when cheaper energy enters the system.

 

It’s challenging to find clean energy sources with the same reliable qualities. 

 

The Public Service Commission opened a proceeding in 2023 to determine what those resources could be but has not made a decision and it doesn’t appear one is imminent. 

 

Public comments and content from a technical conference conducted more than two years ago are still “under review,” said commission spokeswoman Kim Mashke. 

 

In January, the commission tasked Con Edison with finding only non-emitting energy sources to ensure reliability in New York City, despite having no definition of what qualifies.

 

“We looked high, we looked low — we couldn’t find them,” said former Public Service Commissioner John Howard, describing the protracted search. 

Furthering reliance on natural gas and focusing on ill-defined technologies will only prolong an energy affordability crisis in the state, said Esposito, the Long Island environmental group leader.

 

“We have to really work on implementing the programs that will assist and expedite solar, wind and potentially other renewable projects,” Esposito said. 

 

The Public Service Commission should reconsider its decision not to fast-track a proposed transmission project that would have connected renewable energy from Delaware County to Queens, Esposito suggested. The commission expressed concerns the power line wouldn’t jump-start clean energy growth enough to ease New York City’s short-term reliability needs.

 

Another clean option to assist reliability is building out additional energy storage facilities, which capture power when the grid isn’t under stress and can deploy it during peak demands.

 

Prominent Democrats in the state Legislature are pushing proposals to expand small-scale and rooftop solar development which the state has been a national leader in.

 

“It’s not rocket science,” Esposito said. “We know this stuff works.”

 

Ezra Bitterman

Investigative Reporter

Ezra Bitterman is a Joseph T. Lyons Investigative Fellow for the Times Union. He is from Los Angeles and studied Journalism at the University of Missouri. Ezra previously reported for the St. Louis Post-Dispatch, Columbia Missourian and Euractiv. He's reachable at Ezra.Bitterman@TimesUnion.com.

 

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