Local Law 97
Impossible aspirations, legally-binding commitments and reality
Urbanization is a hallmark of development, and for most of the 20th Century, New York was the epitome of a modern city; the good, the bad and the ugly. Now a quarter of the way into the 21st Century, New York is an interesting case-study of reality-deniers.
New York has a “fierce dedication to environmental justice” and, unsurprisingly, an earnest Chief Climate Officer. Whilst trotting out the usual guff about the urgency, Aggarwala notes that a “top priority is to help the city's largest buildings get on board with local law 97, which caps carbon emissions and encourages decarbonization.” (CBSnews)
"That means convert their heating and cooling to electricity," Aggarwala said. "The other part of what we have to do is fix our transportation system."
The current administration favors congestion pricing, plans to invest in transit – surface and subway – and hopes to promote the cleanest commutes – cycling and walking.
The ULEZ in London is wildly popular (not), and clearly not aimed squarely at the poorest (unintentionally) - so yea for congestion charges. As for walking and cycling, hmm… New York in winter? Some will do it for sure, many won’t. (Photo is Montreal not NY, but you get the idea)
But what really got my attention is the Local Law 97 - which also featured very recently in yet another excellent episode of the Power Hungry Podcast, with Jane Menton as the guest (youtube, and here), building out of JM’s 2022 article in The Manhattan Contrarian. In case you don’t have time for a 1 hr podcast (I highly recommend finding the time!) - herewith my summary.
Local Law 97
Local Law 97 builds on the well known antipathy to natural gas. Gas is currently used for heating and cooking in many NY buildings.
Remember this quote above: "That means convert their heating and cooling to electricity"?
Borrowing from the podcast transcript:
Local Law 97 was passed in 2019, it’s also called the “climate mobilization act”. And its goal is to reduce the carbon emissions of all buildings over 25,000 square feet to get to net zero by 2050. It’s a progressive law that “started” in 2019. However, it doesn’t go into effect until 2024. By the Jan 2024 deadline, you have to reduce your carbon emissions by 20%. And then by 2035, it’s 60%. And then by 2040, it’s 80%. January 2024 is in 3 months time.
“When it was passed on Earth Day, it was hailed as the biggest, most ambitious climate law that any city has ever passed; New York is doing this incredible thing, making this incredible gesture during this incredible step towards protecting our environment for the future. And every single person that passed this law basically was term limited out of city council. So they are all gone by the time this law actually is going to have any of the consequences that they’ve imposed on us…. they they probably knew that it was a terrible that it was going to have these big dramatic consequences for New York and that they would never have to face that music because they would wouldn’t be there to when it when it when it came to.” (Jane Menton, slightly edited from the transcript)
This kind of aspirational, virtue-signalling climate law is probably quite familiar to many readers, even those who have nothing to do with New York. What makes this of particular interest is the total absence of any realistic scenario in which it can be achieved.
The condo committee has estimated that 75% of the emissions "(“carbon footprint”) come from the natural gas used for heating and hot water. Thus, to meet any of these “progressive” carbon reduction thresholds - the gas heating would need to be entirely replaced by electrical heating. The cost of this has been estimated at $3 million, and even when shared between the many occupants it would still represent $20,000 per unit. If not, “progressive” fines would be imposed which could amount to $100k-$150/year for the condo. The fines have been scaled to incentivize the capital investments. It is worth noting than the replacement cost is just an estimate - it is unclear how this could be done in practice and ignores many practical aspects of how this would be achieved.
Lessons from other centrally-planned initiatives - which typically have deadlines - tend to show that when everyone is seeking to get the same work done, that old humbug of supply-demand economics kicks in and prices skyrocket, IF anyone can get the work done at all.
So let’s look at the practical difficulties if every building in New York has to be retrofitted with electrical heating at the same time:
there will be nowhere near enough contractors to do the work
costs will inflate badly, delays will occur
the grid will need to have local improvements for the additional load - with missing ingredients being enough linesmen/women and enough transformers (these are made aboard and there is already a global supply-chain issue)
The grid itself will need to increase its generation capacity by at least 50% and probably more.
Gas heating and gaslighting
Whilst all of that looks to be problematic, we should consider how all these fancy new heat-pumps will be powered. The existing electricity supply has seen a familiar pattern of phase-out of coal, and in the case of NYC, closing of Indian Point’s 2 nuclear reactors. The headlines talk about wind and solar capacity additions, but again, to the surprise of no one, natural gas has increased in usage as coal and nuclear have been shut.
So think about that - LL97 will lead to the ripping out of efficient gas-fired furnaces, to be replaced by electrical heating that is dominantly powered by… gas. Gas combusted to make electricity to heat buildings… instead of gas being combusted to heat buildings. Efficiency you say?
If you do it you have huge capital costs, if you don’t you’ll have huge fines - it is yet another Carbon Tax, without the nomenclature.
As an aside the above graphic comes from an article entitled “New York power grid under strain due to slow addition of renewables capacity, warns operator” which is interesting, as one could easily argue that the grid is under strain due to the retirement of significant chunks of reliable, dispatchable generation…
It gets worse
The grid is already “under strain”, but despite this heating and transportation must be electrified. Let’s park transport (pun intended) and focus on heat. We can think about the huge energy demand that is heating by looking at the UK where, thanks to natural gas from the North Sea, something like 85% of households have piped gas and it is the dominant fuel for heating. It has been calculated that the energy required for heating is 4x the energy used in electricity for everything else. With significantly higher peaks in winter.
The need for residential heat may reach 500 GW over short periods, about twenty times the maximum need for domestic electricity. This single comparison should alert us to the danger to using electricity to substitute for gas heating. (source)
This is a complex subject, as the comparison of electricity to heat energy needs care, equally, the use of heat-pumps may mean that the 1:1 comparison is not justified. That said, in terms of exergy combusting gas for heat is much more efficient than combusting gas to make electricity and then to use the electricity to make heat.
New York has a plan
There is the aspirational plan which probably looks not unlike this 2013 NYT article. NY is famous for its comedy clubs - this one should be a hit.
And there is the more detailed view of NY-ISO itself, which has of course done lots of modelling. In the below scenario, you can see the aspiration of reducing “fossil” electricity generation (the brown), at exactly the time that demand will be increasing.
And in case you were wondering how this will be achieved, the stippled-purple is DEFRs.
By 2040, all existing fossil generators are assumed to be retired to achieve the CLCPA target for a zeroemission grid and are replaced by “dispatchable emission-free resources” (DEFRs). These resources represent a proxy technology that will meet the flexibility and emissions-free energy needs of the future system but are not yet mature technologies that are commercially available (some examples include hydrogen, renewable natural gas, and small modular nuclear reactors).
I’m not sure what you were doing in 2007 - but it is probably a reasonably fresh memory and whatever it was doesn’t look very different than today. That was 16 years ago. 2040 is also 16 years away… and somehow the entire NY electricity system will be replaced by technologies that are not mature, and all households will be reliant on this for heating in winter. And you the consumer will pay for it - in capital expenditure in your building and through increased electricity costs. All of that will get you a dangerously unreliable grid and no diversity of fuel for heating. What’s not to like?
Escape from New York
Whilst the prospect of huge costs leading to black-outs and potentially freezing-to-death would be enough to encourage many to flee, one has to realize that (a) it is not always that simple and (b) many other places are equally bat-shit crazy. Probably the best advice is at the end of the Manhattan Contrarian article:
…they get together with several other co-ops in Queens and call a meeting with their State and City representatives where they say: “We can’t responsibly convert our buildings to electric heat until you can demonstrate a workable system to provide the electricity without blackouts. Otherwise we risk having our owners freeze to death in the winter. And if you persist in this, we will tell our shareholders that this is on you, and advise them that they must vote you out of office to avoid disaster.” And meanwhile, the last thing Jane’s building should do is actually invest anything toward converting to electric heat. This whole mania will be long forgotten before these supposed fines kick in for them some time after 2030.
I’m willing to bet that Local Law 97 does not survive the test of time.