Wall Street may be transfixed by the drama in global oil markets, but the world’s financial capital faces structural energy problems much closer to home.
Transmission has quietly become the defining structural force in NYISO. The next decade of investment will favor assets that solve, rather than inherit, these constraints.
Noreva’s merchant curve power forecasts for NYISO illustrate how New York’s power problems could persist even if the state manages to add significant new generation capacity.
Curtailment risk
In energy markets, the inability to move low-cost upstate generation eastward leads to localized price suppression.
Upstate developers see weaker energy margins and higher curtailment risks, especially as solar and wind additions accelerate.
Meanwhile, downstate zones remain structurally more expensive, not because of fuel scarcity but because of deliverability scarcity.
Energy prices in Zones J and K are increasingly shaped by limited transfer capability and reliance on marginal gas units operating during high-load, low-renewable hours.
RECs markets are captive as well
The REC market inherits these spatial characteristics.
Because RECs are statewide instruments but the underlying energy value is highly locational, REC revenue becomes only one part of the viability equation for upstate projects, many of which now require storage or strategic siting to mitigate congestion and shape premiums.
Deliverability into Zone J after the Champlain-Hudson line is added raises interesting dynamics: clean imports from Québec reduce the emissions intensity of downstate energy but also raise the competitive bar for new in-zone renewable projects.
Capacity premiums widen
Transmission constraints are also central to NYISO’s capacity market structure.
Locality requirements ensure that Zones G–K maintain higher ICAP values, reflecting reliability needs that cannot be met with upstate resources regardless of available surplus generation.
As thermal retirements proceed and renewable intermittency increases, Downstate capacity premiums are likely to widen, not shrink.
Storage assets in these zones, therefore, enjoy a dual advantage: both energy arbitrage upside and superior capacity accreditation tied to local deliverability.
For developers, the signal is unambiguous: location is becoming the dominant variable in project economics.
