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UPDATE 1-New York state denies permits for two proposed natural gas-fired power plants

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(Adds comments from NRG Energy)

Oct 27 (Reuters) - New York environmental regulators on Wednesday rejected permits to build two natural gas-fired power plants as the state focuses more on renewable projects and energy efficiency to meet its greenhouse gas reduction goals.

The New York State Department of Environmental Conservation (DEC) denied air emissions permits for NRG Energy Inc's proposed Astoria gas turbine project in the New York City borough of Queens, and Danskammer Energy LLC's proposed Danskammer repowering project in Newburgh on the Hudson River.

In both cases, the DEC said: "Our review determined the proposed project does not demonstrate compliance with the requirements of the Climate Leadership and Community Protection Act."

The 2019 act seeks to achieve 100% zero-emission electricity in the state by 2040.

"It's unfortunate that New York is turning down an opportunity to dramatically reduce emissions and strengthen reliable power for millions of New Yorkers at such a critical time," Tom Atkins, Vice President of Development at NRG Energy said in a statement.

Atkins added that in the meantime, NRG's current Astoria plant will continue to operate for another 18 months "until we are forced to shut down under current law."

New York Governor Kathy Hochul issued a statement applauding the DEC's decisions to deny the permits.

"Climate change is the greatest challenge of our time, and we owe it to future generations to meet our nation-leading climate and emissions reduction goals," the Democratic governor said.

The Sierra Club environmental group said in an email that the DEC permit denials "effectively (shut) down the projects for good."

"This denial sets a precedent that no new gas proposals will move forward in New York, so Sierra Club and coalition partners now can focus on retiring existing gas," the group said.

Danskammer wanted to repower the existing 511-megawatt (MW) power plant at the site, according to the company's website.

In 2020, NRG proposed to replace the 24 gas turbines at the Astoria site with a single new turbine generator capable of producing 437 MW, according to the company's website. (Reporting by Scott DiSavino; additional reporting by Swati Verma; Editing by Peter Cooney and Richard Pullin)

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