The Role and Future of Natural Gas for Power Generation in New York State
Demand for natural gas in New York’s energy sector is poised to decline, driven by the state’s ambitious Net Zero agenda. This marks a dramatic shift away from the grid’s longstanding dependence on fossil fuels. According to New York’s latest emissions report, the electricity sector contributes 16% of the state’s total greenhouse gas emissions. Notably, emissions from burning natural gas for electricity reached 26 million metric tons of CO2 equivalent (using a 20-year global warming potential), accounting for 6.6% of overall emissions.
It’s no surprise that natural gas has a substantial impact: in 2024, the New York Independent System Operator (NYISO) reported that fossil fuel plants—notably those using natural gas and oil—produced 51% of the state’s electricity. To maintain reliability, New York commonly turns to dual-fuel generation units, which can switch to burning petroleum products when natural gas supplies run low. These dual-fuel units represent roughly two-thirds of natural gas-fired capacity and supplied 41% of all electricity generated in 2024. Fossil fuels, in short, remain deeply embedded in New York’s energy system.
To tackle this, the Climate Leadership and Community Protection Act (CLCPA) lays out bold targets: a 70% clean-energy grid by 2030 (recently pushed back three years) and a fully zero-emissions grid by 2040. Yet, meeting these goals means installing at least 100–130 GW of total generation capacity by 2042 to keep pace with rising demand.
With fossil fuels still so entrenched and such sweeping investment needed, can New York realistically achieve the goals set by the CLCPA?
An uncertain energy future crushes the dream of a zero-emissions grid by 2040
The looming reliability crisis in New York’s power sector makes it nearly impossible to break the grip of natural gas in the short term. Continuing the status quo in electricity generation not only perpetuates high emissions, but also introduces serious risks to grid stability. According to NYISO’s 2025 Power Trends report, more than 6,500MW of fossil-fueled capacity—mainly aging gas and steam turbines—will surpass their typical retirement age by 2028. As these plants get older, they become less safe, leak more emissions, and require expensive repairs or replacements, ultimately raising costs for consumers.
Making matters worse, New York’s dependence on imported electricity is increasing. In 2024, the state imported 38,785GWh while exporting only 18,148GWh—sourcing power from neighboring regions that are also grappling with tighter reliability constraints. The supply-demand equation is further strained by an imbalance in new generation: since 2019, 4,315MW of capacity have been retired, while only 2,274MW have come online. That’s a net loss of over 2,000 MW at a time when peak demand is expected to rise by 50–90% over the next 20 years.
It’s no surprise that NYISO is raising red flags about grid reliability. The operator warns that, as the system shifts from summer to winter-peaking in the 2030s thanks to widespread electrification, reliability risks will only intensify. The latest Power Trends Report suggests statewide deficiencies could appear as soon as winter 2029–30 if fuel supply isn’t secured for peak periods. Winter months are especially precarious: natural gas supply can be disrupted by severe weather, and heating demands may divert gas away from power plants. The crisis during Winter Storm Elliot in December 2022 is a stark reminder of how close the state can come to widespread outages. Looking ahead, if the 1.25GW Champlain Hudson Power Express from Quebec isn’t operational by May 2026, further reliability shortfalls could hit New York City. In fact, NYISO has already called for the continued operation of the Gowanus and Narrows gas peaker plants to prevent a 446MW shortage in NYC predicted for summer 2025.
Forecast revisions further illustrate just how volatile the situation is. NYISO’s 2024 Reliability Needs Assessment initially predicted that New York City wouldn’t meet summer demand by 2033 if all small gas generators were decommissioned by 2030, as state law requires. However, NYISO recently changed its position after projecting 200MW less demand by 2035 due to slower-than-expected electrification.
This kind of dynamic scenario analysis may show flexibility, but it also highlights a troubling reality: even short-term lapses in forecasts can justify keeping high-emission peaker plants online, or worse, retaining and expanding natural gas infrastructure—especially in and around New York City.
The challenge is even harder for NYC and Long Island, where transmission bottlenecks make it slow and costly to replace local peaker plants with renewable generation from upstate. When the grid faces a potential shortfall, sticking with familiar local gas plants remains the default. Across New York, gas continues to provide essential grid “firming,” filling in the gaps when renewables aren’t enough. Attempting to phase out natural gas plants too quickly might reduce emissions, but it could also destabilize power delivery just when demand is set to skyrocket.
NYISO’s ongoing concerns underscore the fundamental clash between ambitious climate goals and the unyielding need for reliable power. This raises an urgent question: will New York be forced to compromise on its climate ambitions to keep the lights on?
A Tale of Two Energy Grids – the stark contrast between Upstate and Downstate:
There is a striking divide between upstate and downstate New York when it comes to energy sources. Upstate New York stands out as a clean energy leader: in 2024, a remarkable 89% of electricity generated there came from zero-emission sources, dominated by nuclear (41%), hydroelectric (39%), and wind (8%) power. Natural gas and dual-fuel plants made up just 11% of the region’s electricity mix, demonstrating upstate’s progress toward a low-carbon grid.
The picture changes dramatically moving south. Downstate New York’s grid tells a far different story. Only 5% of downstate electricity in 2024 was sourced from zero-carbon resources. Instead, the vast majority—83%—came from dual-fuel generators, while an additional 10% was produced using natural gas alone. This heavy dependence on fossil fuels underscores the region’s vulnerability and its sizeable gap to decarbonization.
Why does such a clean energy success story stop at the border between upstate and downstate, and can this gap ever be closed?
Upstate’s glimmer of hope:
When it comes to upstate New York, the path to a zero-emissions grid by 2040 appears within reach—at least on paper. The region already boasts a diverse, cleaner energy mix, and momentum is building: in 2024, Governor Hochul announced contracts for 23 large-scale land-based wind and solar projects totaling 2.34GW, aiming for completion by 2028. Just a year later, another 26 renewable projects were approved, adding 2.5GW. Together, these new resources could, if all are connected as planned, swiftly replace upstate’s remaining 4GW of fossil capacity as of summer 2025. This surge of clean power forms a promising foundation for a fully decarbonized grid.
But beneath the optimism, thorny issues persist—especially around aging infrastructure and the surging costs of modernization. Ongoing electrification is driving up demand and making the task of switching to renewables even harder. Utilities like NYSEG and RG&E have flagged vital components—from breakers and substations to power poles—for urgent upgrades. Serving 1.2 million electric and 600,000 gas customers, these companies are proposing $16 billion in system improvements, which would mean residential rate hikes of $52 to $67 a month, or a staggering 30–45% jump in average bills. As expected, public backlash is fierce. Many blame the utilities' poor long-term planning, while the companies insist soaring infrastructure needs and rapid demand growth are to blame. In early 2025, RG&E tapped into $4.7 million in state funds just to clear a power bottleneck that was stalling area housing construction—a band-aid solution for a much bigger problem. Major upgrade battles like these are likely to multiply as the region continues its transmission overhaul. Meanwhile, National Grid’s “Upstate Upgrade” program will invest over $4 billion in more than 70 projects, bringing 1,000-plus miles of new and rebuilt transmission and 45 substations to Central, Eastern, and Western New York by 2030. While these improvements are critical for a green grid, the looming question is how to distribute the cost fairly—making creative financing and public-private partnerships essential tools to cushion the blow for consumers.
Decarbonizing upstate’s power supply brings its own technical challenges, too. As renewables make up a larger share of the mix, dealing with their intermittency becomes unavoidable. Unless energy storage and dispatchable emissions-free resource (DEFR) technologies leap forward, natural gas will remain a necessary fallback. Firming capacity—power that is always available—already lags behind the reliability standard needed for the region’s cold winters. As of 2025, only about 40% of installed zero-emission capacity is firming, far short of the 60–80% required. For now, fossil plants are what push the region to roughly 60%—just enough to stave off winter blackouts.
Despite these hurdles, upstate New York remains well-positioned for an ambitious clean energy future. It has land, infrastructure potential, and active state programs encouraging creative land-use solutions, like agrivoltaics that combine solar with agriculture or developing renewables on brownfields and underutilized sites. With strong planning and continued investment in transmission, upstate could be a model for clean, resilient energy—if it can solve for fairness and reliability. But as utility bills mount and infrastructure needs skyrocket, one has to wonder: will ratepayers be willing—or able—to foot the bill for upstate’s clean energy promise?
Downstate’s relationship with dirty power:
Downstate New York’s deep dependence on fossil fuels—currently outpacing the national average—stands in stark contrast to upstate’s clean energy momentum. The 2021 closure of the Indian Point nuclear facility marked a critical turning point: in 2019, Indian Point supplied around 25% of downstate’s electricity and 12% of the state’s total generation. Its shutdown created a huge gap that was quickly filled by natural gas, pushing downstate’s share of fossil power from 68% in 2019 to a staggering 94% in 2024.
The future is set to shift somewhat greener with the launch of the Champlain Hudson Power Express (CHPE), which will deliver 1,250MW of renewable hydropower from Quebec from 2026 onward. CHPE, which is expected to recover about 60% of the zero-emissions supply lost with Indian Point, is a cornerstone project for downstate’s clean energy prospects. However, the project’s REC funding mechanism, spread through electric bills, has drawn criticism for high contracted rates—though NYSERDA projects just a modest 2% average bill increase thanks to long-term savings from lower reliance on fossil fuels. PA Consulting estimates the project could ultimately save the state more than $17 billion over 25–30years by displacing expensive fossil generation with lower-cost hydropower.
Equally central to downstate’s ambitions is a robust offshore wind pipeline. Offshore wind can be sited close to urban loads, lessening both land-use constraints and transmission costs. Projects like Empire Wind 1 (810MW) and Sunrise Wind (924MW), targeting completion around 2027, are part of New York’s 9 GW by 2035 offshore wind target. But the path forward has become muddied: in 2024, the state canceled its third offshore wind solicitation, and federal headwinds have worsened. The Trump administration’s January 2025 memorandum pausing offshore wind permitting, coupled with the lack of expanded federal support, recently forced the New York Public Service Commission (PSC) to halt plans for an underwater transmission network—effectively freezing hopes for 4.7–8GW of future offshore wind. The PSC bluntly acknowledged that, under these political realities, New York’s offshore wind targets are “impossible in the near term.” The result: stalled offshore wind development is making any near-term phaseout of downstate fossil power increasingly implausible.
Efforts to diversify are continuing, but none are likely to provide an immediate solution. Gov. Kathy Hochul has directed the NYPA to begin developing a new advanced nuclear plant upstate with at least 1GW of capacity, though its future impact downstate is uncertain—and critics note the irony, given Indian Point’s recent closure. Downstate also targets 1GW of citywide solar by 2030, with aggressive policies like Local Laws 92 and 94 requiring solar or green roofs on new and renovated buildings. Distributed solar is making tangible progress: PSEG Long Island hit 1,034MW of solar by late 2023, helping New York achieve its statewide 6GW distributed solar goal a year early and stretching the solar target to 10GW by 2030. Initiatives such as PowerUp NYC and community solar pilots further highlight a push to green local supply—though these resources alone can’t match the city’s massive demand or provide firm power.
The region is left heavily reliant on upstate’s renewables—a reality that places huge pressure on transmission development. Projects like Propel NY and Clean Path NY (CPNY) are vital. Propel NY, aiming for completion by 2030, will upgrade downstate’s grid and can help deliver at least 3,000MW of future offshore wind to New York City and Long Island. Meanwhile, the original CPNY project—a generation and transmission hybrid aiming to move up to 5GW of upstate renewables south—was scrapped over cost overruns in 2024; a leaner, transmission-only version now under review could still deliver 1,300MW of steady, firming power to the city.
In sum, breaking free from dirty power downstate depends on advances in both generating renewable supply and bolstering transmission—neither of which appears certain on the current political or economic timeline. While downstate has made real commitments and progress, the region’s continued reliance on fossil fuels shows just how hard it will be to meet the CLCPA’s zero-emission grid targets by 2040. Given these roadblocks, is the vision of a fully decarbonized downstate grid by 2040 anything more than wishful thinking?
Where does New York go from here?
Right now, achieving a statewide zero-emissions grid by 2040 seems out of reach. Downstate remains anchored to natural gas, with little hope of remedy in the near term amid harsh federal headwinds and ongoing project setbacks. Upstate faces less dire prospects but remains stymied by the need for major transmission upgrades and next-generation, dispatchable emissions-free resources (DEFRs) to fully wean itself off fossil fuels. As reliability issues continue to loom—especially with the rapid growth of large energy consumers like data centers—utilities will almost certainly put grid stability ahead of strict climate deadlines.
The numbers paint a daunting picture. Even after accounting for currently approved zero-emissions generation projects, New York still faces a 48GW shortfall in installed capacity needed by 2042. This doesn’t include the future retirement of the 25GW fossil fleet still on the grid as of summer 2025. If DEFRs are to step in as planned, they’d need to provide at least 20GW—nearly half—of this future capacity. But it’s risky for the state’s plans to hinge on technologies that aren’t yet proven at commercial scale. If New York doesn’t aggressively accelerate both the planning and approval of zero-emission projects using mature technologies, its projected capacity gap may wind up being filled by even more natural gas.
In reality, continuing to rely on natural gas highlights the state’s failure to commission and connect clean resources fast enough and in the right places. The downstate grid, for instance, has not developed local renewables at the scale needed to enable the planned retirement of peaker plants. Does this mean the dream of a fully decarbonized grid is dead? Not necessarily—if New York is willing to recalibrate expectations and rethink its strategy.
A key step is ensuring that reliability forecasts are as precise as possible, so any new investment in gas is truly necessary and not just an easy fallback. Without rigorous demand and supply modeling, New Yorkers could wind up locked into unnecessary long-term gas commitments. If some retention of natural gas is unavoidable, such decisions need to be justified with the latest data and a clear-eyed sense of what’s truly required for reliability.
Equally, New York can’t afford to let its nuclear ambitions falter. As modular nuclear reactors move closer to commercialization, the state should be ready to support—and quickly deploy—new nuclear power to provide firm, non-intermittent zero-emission electricity. Offshore wind remains a crucial pillar, too: as soon as federal policy shifts, New York should be poised to restart projects that have been idled by current regulatory and political obstacles.
But perhaps the most crucial bottleneck on the road to a zero-emissions grid is transmission. Building and financing generation has become routine; connecting it where and when it’s most needed is now the chief barrier. Investments in both upstate renewables and a robust statewide transmission backbone are essential to break New York’s fossil fuel dependency.
There are pragmatic, near-term options for addressing natural gas reliance. NYISO supports repowering aging fossil plants—replacing inefficient boilers and turbines—to bridge reliability gaps as the system transitions. While not meant to entrench gas for the long haul, these projects do require significant ratepayer investment and have run up against regulatory hurdles. The DEC has blocked air permits for several proposed repowering ventures, arguing they don’t demonstrate necessity and risk compounding environmental injustices—most notably at the Astoria and Danskammer plants.
Even if state regulators soften, suppliers might not be able to deliver: US demand for natural gas turbines now exceeds supply, resulting in order backlogs of one to seven years and wild price uncertainty. Upgrades that once seemed an obvious stopgap now look like a risky proposition for both utilities and customers.
This is where “clean repowering”—co-locating renewables and storage at retiring gas plant sites—may be a game-changer. By leveraging existing interconnection rights, these projects can cut costs and timelines substantially, which is especially valuable in places like downstate New York that face tight transmission constraints and complex zoning. Clean repowering can also streamline the most time-consuming aspect of renewables development: interconnection and permitting, which can stretch to five years per project.
Still, all these strategies could be undone by unsupportive federal action. The current administration has slowed or halted permitting for wind and solar nationwide, meaning that even New York’s most strategic planning could stall without a more favorable federal climate.
Against this backdrop, the state faces a stark choice: double down on bold, proactive measures today—or risk that tomorrow’s gap will be filled by a new wave of fossil investment. With so much at stake, the ultimate question remains: can New York overcome regulatory, technological, and political inertia to turn its zero-emissions vision into a reality, or will the grid of the future look much like that of today?
New York may benefit from a new perspective:
With the near-term outlook for zero-emissions power generation projects clouded by political and logistical barriers, New York should explore solutions for managing natural gas reliance that don’t hinge on extensive federal cooperation. One promising approach is the wider deployment of virtual power plants (VPPs). VPPs aggregate and optimize distributed energy resources—like rooftop solar, battery storage, and smart home devices—to collectively provide flexible grid support, effectively mimicking the output of a traditional natural gas plant. This coordinated flexibility enables rapid responses to grid stress and can meaningfully offset the need for fossil backup.
Furthermore, demand response strategies and greater grid flexibility should take center stage in planning for New York’s energy future. According to Brattle’s analysis for NYSERDA, exploiting the state’s full grid flexibility potential by 2040 could yield a sixfold increase over current capacity—allowing flexible resources to cover as much as 25% of New York’s 2040 system peak. Such adaptability is not just technically promising but financially compelling, forecasting up to $2.9 billion in annual savings by 2040.
Today, New York’s demand response programs account for about 1.3GW—roughly 4% of system peak demand—integrated across NYISO and utility-run markets. There’s potential to expand this to 8GW by 2040 by integrating a broader array of technologies, including distributed and behind-the-meter resources. If rolled out effectively in high-impact service areas, this could accelerate the shutdown of some of the state’s highest-emission fossil plants. Demand management and flexibility aren’t just technical solutions—they represent an area ripe for innovation, with firms like AutoGrid and Green Charge Networks starting to make headway in New York. Shifting from simply meeting rising demand to actively managing and reshaping it could be a key that unlocks a lower-carbon, more resilient grid—especially if major renewables projects remain stalled under current federal conditions.
New York State must adopt a more grounded and assertive stance in its energy transition. Current climate mandates are misaligned with the actual portfolio of available resources and achievable deployment timelines, leaving a yawning gap between natural gas phaseout aspirations and implementation reality. Now is the time for the state, its utilities, and its ratepayers to rally behind realistic, timely, and innovative solutions. Only by focusing on what can be deployed and improved now will New York stand a real chance of breaking its dependence on fossil fuels and delivering on its clean energy promise. The path forward demands not just ambition, but adaptability and decisive action—will the state rise to the occasion before the window for climate progress closes?
Key Sources:
https://dec.ny.gov/sites/default/files/2024-12/sr1energynysghgemissionsreport.pdf
https://www.nyiso.com/documents/20142/2248793/2024-RNA-Report.pdf
https://www.nyiso.com/documents/20142/46037414/2023-2042-System-Resource-Outlook.pdf
https://www.weforum.org/stories/2025/01/energy-infrastructure-grid-finance/
https://dps.ny.gov/news/commission-acts-protect-ratepayers-federal-offshore-wind-permitting-stalls
https://rmi.org/clean-repowering-a-near-term-ira-powered-energy-transition-accelerant/