Dennis Elsenbeck, Climate Leadership and Community Protection Act

Energy expert Dennis Elsenbeck on New York’s climate goals

This disconnect is an example of how New York state’s progressive energy goals have seeded individual projects, but thus far failed to create a comprehensive system where businesses and residential ratepayers, solar and wind developers, economic development officials and politicians are all working together. That’s according to Dennis Elsenbeck, head of Phillips Lytle LLP’s energy and sustainability arm.

Elsenbeck, who was formerly director of stakeholder and policy for National Grid’s U.S. operations, spoke to Business First about a recently passed state law called the Climate Leadership and Community Protection Act.

The law ups the ante on New York state’s already aggressive goals to eliminate fossil-fuel production from its energy mix, which is now split almost evenly among natural gas, nuclear and renewable resources (mainly hydropower).

It also means a new round of worry for businesses that are already slammed with extra costs to pay for renewable subsidies.

You praised the state’s ambitious goals but expressed concern about the structure of its energy policies. Why? If you look at what we provide incentives for, it’s incentives for technology, which means people are creating these round pegs and square pegs and then they go looking for holes. In any other industry, people create a new product or a service to meet a demand in the marketplace.

I don’t know why energy is different. If you don’t look at the demand in the marketplace, the need for supply to meet that demand and how to deliver it, then I think you’re setting up an inefficient system.

So what’s the big picture? The way most casual observers understand this is that we’ll just keep building more renewable energy such as solar farms, wind farms and offshore wind energy. But if you really think about it, what does this have to do with the need in the market or the demand? Wouldn’t you want to control that first? Because if you control demand first, it has a domino impact on your investment in storage and distribution, and you may end up avoiding building more supply and still achieving your energy mix.

What’s an example and what’s a solution? I see windmills on hightop mountain ranges but I don’t see a lot of development there. We want to be in a position where we’re developing renewable energy sources that are aligned with our demand centers. Look at the former Bethlehem Steel site (on Route 5 in Buffalo). You have wind and solar there now, but when trying to develop that site, what if the developer says they can’t count on wind and solar? But if you employ battery storage as part of that solution – and I include the understanding that I have a zero net energy building there (Erie County Industrial Development Agency is proposing a $27.5 million structure that produces as much energy as it consumes) – now maybe I can reduce the cost of infrastructure.

And the result? Now I’m solving a real economic development challenge and co-locating both supply and demand in one location. I’m eliminating the need for long-distance transmission and distribution. This stuff can live together as long as we stop treating it as a separate issue. Economic development is not a separate issue from clean energy; they have to come together. I have not seen that yet.

How do we bring these disparate actors to the table? The new law creates a 22-member council (The New York State Climate Action Council will guide implementation of the law). But if it doesn’t involve anyone in the marketplace, such as developers, building owners, industry people, then I’m a little concerned because you’ll get more focus on technology but not the results of installing that technology. Will that council be made up of individuals who can see the world more holistically?

In reporting on this subject, large energy consumers tend to feel like targets rather than partners. Why is that? If I’m on the business side, I’m looking at how this impacts my bill. If I was a manufacturing plant that employed natural gas or some other fossil fuel, what would be the impact of removing that on my production systems, my production cost?

How can business help to rectify this? I look at this and see another cost when you’ve already got renewable portfolio standard, the regional greenhouse gas initiative, the systems benefit charge, renewable energy credits. You have zero energy credits. And then you ask: How will I see a benefit? We need to look at this and ask ourselves whether all these initiatives are aligning. We have to think about our economic development programs, our clean-air and clean-water initiatives, our transportation initiatives. All these things need to focus on solving real market issues. You need both environmental sustainability and economic investment where people see a return on their investment.

When we talk about green energy, what’s the simplest way to explain the impact? It has to be more than just setting aggressive goals that lead the nation. It has to set up real policy changes and real alignment throughout the state. We have to make sure the taxpayer, the ratepayer, the homeowner, the businesspeople who are contributing to this fund are also getting a return from it. Leading the nation in goals is simply not enough.

New York gets a lot of attention for energy programs relative to other states. What’s the international context for all this? The global economy talks about (public investment in renewable energy and storage) in terms of trillions of dollars over the next 10 years. New York setting high-level goals is really where the global economy is going. The question locally is whether we’re taking those dollars from New York ratepayers and planning how to reinvest them so that we’re building New York businesses in the clean-energy sector.