BILL NUMBER: S3281

SPONSOR: PARKER
 
TITLE OF BILL:

An act to amend the energy law, in relation to establishing a program
for eligible renewable hydrogen

 
PURPOSE OR GENERAL IDEA OF BILL:

This legislation would create a credit for hydrogen produced in New York
State using renewable energy in order to further the state's clean ener-
gy goals.

 
SUMMARY OF PROVISIONS:

Section 1: Amends the Energy Law by adding a new Article 13. Article 13
defines "Eligible Renewable Hydrogen" and "Eligible Curtailed Renewable
Hydrogen" in order to develop a Renewable Hydrogen Incentive and Financ-
ing Program administered by the New York Energy Research and Development
Authority.
              

Section 2: Effective Date.

 
JUSTIFICATION:

New York continues to lead the nation in the development of a 100
percent renewable energy economy with the recently enacted Climate Lead-
ership and Community Protection Act. As the state works to find alterna-
tives to fossil fuels, New Yorkers deserve a system that provides good
paying jobs, system reliability, and flexibility.  Renewable hydrogen is
an emerging technology with the potential to unlock a number of benefits
for the residents of this state. This legislation would provide the
foundation for renewable hydrogen technology to be developed in New
York.

Hydrogen, the most abundant element in the universe, provides the abili-
ty to store energy for later use, heat buildings, fuel electric vehi-
cles, and enable industries which rely on extreme temperatures to oper-
ate without fossil fuels. New York has ambitious goals related to energy
storage, efficiency, transportation electrification, and job growth, all
of which will need aggressive and multifaceted approaches to meet.
Several markets around the world have begun to recognize the role of
hydrogen in a green economy, including the Orkney Islands in Northern
Scotland.

In the Orkney Islands, hydrogen produced by wind turbines and wave ener-
gy is used in several ways. It is stored to be converted to electricity
when the wind doesn't blow, it is used in electric vehicles that run on
hydrogen fuel-cells (producing no tailpipe emissions besides water and
oxygen), and it has the potential to reduce "industrial heat emissions
... especially in situations where the flame needs to come into direct
contact with the material being produced, such as in furnaces." Hydro-
gen, which is inherently expensive to produce (although prices are fall-
ing as technology improves was attractive in the Orkney Island thanks to
an abundance of clean energy. According to the BBC, "winds, waves and
tides generate about 130% of the electricity its population needs - all
of it from clean sources." Hydrogen is already being considered by
several utilities serving New York, including National Grid (See report
from National Grid in PSC Case 19-G-0678), as an alternative fuel source
and energy storage technology. Likewise, Plug Power, a hydrogen fuel
cell company based in Latham, New York, is using hydrogen to fuel fork-
lifts, delivery vehicles, and backup power systems.

In New York, transmission issues have created a situation where clean
energy located upstate often fails to be delivered downstate due to
congestion along the interconnections. According to the New York Inde-
pendent System Operator (NYISO), in 2019, "nearly 90% of the energy
produced in upstate New York already is derived from carbon-free
resources" while "70% of the energy produced to serve downstate load is
derived from fossil fuels (4)". Wind energy resources in New York are
being curtailed as a result of the transmission issue, whereby turbines
are "disconnected" from the energy grid to ensure the system is not
overloaded. According to the National Grid report, converting power to
renewable hydrogen "can drive more investment in renewable electricity
by increasing utilization of those assets and addressing the biggest
weakness of solar and wind: intermittency and storage. Rather than being
curtailed during cool and sunny days or windy nights, solar and offshore
wind could be converted to hydrogen ... effectively storing that energy
in the form of chemical bonds." This legislation would create a Renewa-
ble Hydrogen Incentive and Financing Program administered by the New
York Energy Research and Development Authority that would support hydro-
gen produced from renewable energy sources. Hydrogen created by fossil
fuels would be ineligible for this program. The program would value
hydrogen created using curtailed energy at a higher rate to ensure New
York is capturing all of the renewable energy created within its
borders.

(1) https://www.bbc.com/future/article/ 20190327-the-tiny-islands-lead-
ing- the-way-in-hydrogen-power

(2) https://www.carbonbrief.org/ ccc-progress-on-low-carbon- hydrogen-
must-begin-now-in-uk

(3) https://www.forbes.com/sites/ kensilverstein/2020/02/06/ the-cost-
to-produce-and-distribute- hydrogen-from-clean-energy-will-plummet/
52d405485897

(4) https://www.nyiso.com/documents/20142/ 2223020/2019- Power-Trends-
Re- port.pdf/0e8d65ee-82 Oc-a718-452c- 6c59b2d4818b?t=1556800999122

 
PRIOR LEGISLATIVE HISTORY:

2019/20 S.8992 - REFERRED TO RULES

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None.

 
EFFECTIVE DATE:
Immediately.