The New York State Energy Research and Development Authority (NYSERDA) has finalized contracts with Equinor Wind US for its 816-MW Empire Wind Project and Sunrise Wind (a joint venture between Ørsted A/S and Eversource Energy) for its 880-MW Sunrise Wind Project to deliver clean, affordable renewable energy to New Yorkers. As the largest procurement for offshore wind in the nation’s history, this announcement advances Cuomo’s Green New Deal goal to develop 9,000 MW of offshore wind by 2035 and position New York State.
“New Yorkers know all too well the devastating impacts of climate change and the catastrophic consequences if we do not act urgently,” Cuomo said. “By finalizing the contract awards for the nation’s largest offshore wind procurement, we are realizing the positive impacts these projects will have on the environment while diversifying our economy and bringing significant economic benefits to the Empire State.”
“We are committed to supporting offshore wind projects as part of our efforts to increase renewable energy,” said Lt. Governor Kathy Hochul. “These significant contracts build on our aggressive clean energy goals to reduce emissions and combat climate change. New York is leading the nation working to protect our environment and make sure it is cleaner and greener for future generations.”
NYSERDA also concurrently submitted its filing, “Launching New York’s Offshore Wind Industry: Phase 1 Report,” to the New York State Department of Public Service. The report documents the successful results of New York’s first large-scale offshore wind solicitation with a combined total capacity of nearly 1,700 MW and provides details about these highest scoring projects.
As detailed in the report, the state’s first large scale offshore wind solicitation resulted in Offshore Wind Renewable Energy Certificate prices approximately 40% less than projected by NYSERDA’s 2018 analysis, signaling that the costs to deploy offshore wind are rapidly declining.
An OREC represents the environmental benefits associated with 1 MWh of electricity generated from offshore wind resources and consumed by retail customers in New York State. By compensating offshore wind generators for these investments, ORECs provide the financial support necessary to lay the groundwork for the industry to take root, which will yield growing dividends for New Yorkers as the industry matures.
These projects are priced competitively relative to recent results from New Jersey and several New England states while also delivering significant new port infrastructure investments, public-private workforce training commitments and thousands of well-paying job opportunities.
The Report’s key findings include:
- Unprecedented competition: New York’s first procurement garnered the most competitive market response to date among all U.S. state offshore wind solicitations. With four developers submitting a total of 18 proposals, the proposals demonstrated New York’s unparalleled reach to existing lease areas spanning New England to New Jersey, including areas leased through the federal Bureau of Ocean Energy Management’s most recent December 2018 auction. In addition, this response demonstrates that the New York State procurement mechanism for ORECs is widely seen as attractive to private developers in the U.S. offshore wind market.
- Cost-effectiveness: The Empire Wind and Sunrise Wind projects have an average all-in development cost of $83.36 per megawatt-hour (2018 dollars) with an expected average OREC cost of $25.14 per megawatt-hour. The average bill impact for residential customers will be less than a dollar per month per customer — approximately $0.73.
- Innovative contracting structure: The contracts utilize an innovative Index OREC contracting structure where payments rise and fall inversely to a composite average of New York’s energy and capacity market prices markets, which do not reflect actual project revenues. This structure provides protection for ratepayers against volatility in utility bills and projects in project revenue over the contracts’ 25-year lifetime.
- Environmental, fishing and ocean use priorities: The award group demonstrated a strong commitment, through the adoption of mitigation plans, to actively address the interests of ocean users such as commercial and recreational fishing and environmental stakeholders, and also ensure that coastal communities will be fully engaged and informed during the development and construction process.
The awarded projects will spur New York’s clean energy industry with $3.2 billion in combined economic impacts to upstate, downstate and Long Island, more than $85 million investments in long-term port facilities and cutting-edge technologies and are expected to deliver over 1,600 direct new jobs in project development, component manufacturing, installation, and operations and maintenance. Efforts to best capitalize on the private investments in long-term port facilities and cutting-edge technologies should be considered in tandem with $200 million in state funding to unlock private capital in supporting critical port infrastructure.
“By every measure, New York’s first offshore wind procurement was a resounding success and the execution of contracts today signifies a major milestone in our nation-leading pursuit to deliver clean, locally-produced power to millions of New York homes and businesses,” said Alicia Barton, president and CEO, NYSERDA. “These projects, which represent the largest-ever renewable energy procurement made by a state in U.S. history, will deliver tremendous economic benefits and provide jobs to thousands of New Yorkers.”
To advance the state’s long-term port infrastructure investment, earlier this month, NYSERDA, Empire State Development and the New York State Department of Transportation issued a Request for Qualifications seeking proposals for pre-qualification from port operators and market participants who are interested in upgrading and investing in New York ports to support the state’s emerging offshore wind industry.
The state’s ports are expected to unlock billions in long-term local economic development potential and will be serving as a hub for the broader northeast region’s offshore wind industry. The RFQL is the first step in a two-phase process through which New York seeks to pre-qualify proposers and then competitively select proposals for public-private investment opportunities in port infrastructure.
Only those proposers who are pre-qualified under this RFQL will be eligible to participate in a subsequent competitive solicitation for up to $200 million to be issued in 2020. To be eligible, proposers must identify at least one port facility and describe the current level of site control or ability to obtain site control and will be evaluated based on the demonstrated value and viability of the project. Interested proposers can apply here.
On November 15, 2019, NYSERDA will host an Offshore Wind Technical and Training Workshop at Farmingdale State College on Long Island. This workshop is an opportunity for local businesses, training providers, labor organizations and educators to coordinate with offshore wind developers, component manufacturers and service suppliers to identify the technology and training needs of Sunrise Wind, Empire Wind and future offshore wind projects in the region. The workshop will also set the stage for New York’s $20 million Offshore Wind Training Institute, which will provide benefits to workers across New York State through new job training programs, tailored college curriculum, and enhanced academic research opportunities. Interested participants can register here.
News item from NYSERDA
Filed Under: News, Offshore wind, Projects