The New York State Energy Research and Development Authority (NYSERDA) is on course to become the first state entity in the nation to participate in a federal auction for an offshore wind site. NYSERDA has submitted the required documentation and a bid deposit to the U.S. Department of the Interior’s Bureau of Ocean Energy Management (BOEM) to take part in an auction for a 79,350-acre Wind Energy Area located 12 miles off the Long Island coast.

Offshore wind supports Governor Cuomo’s Reforming the Energy Vision strategy to build a clean, resilient, and affordable energy system for all New Yorkers. It has the potential to become a significant source of renewable power and economic development for the state.
NYSERDA submitted qualifications and bidder’s financial forms for the December 15 auction, which is a blind ascending bid and online auction with the asking prices set by BOEM. In recognition of public comments regarding the potential benefits — such as reduced costs and greater certainty for developers — from public entities winning the lease area, BOEM is offering a 10% non-monetary credit to qualified bidders who meet the definition of a “Government Authority.”
NYSERDA has submitted the required documentation and requested this 10% credit. If the organization wins the auction, its approach to the development of the Wind Energy Area will provide developers and consumers with greater certainty, fewer risks, and lower costs. Offshore wind will advance the State’s efforts to reduce harmful greenhouse gas emissions, combat climate change, and responsibly secure 50% of the State’s electricity from renewable sources by 2030.
“Offshore wind is crucial to meeting New York’s ambitious energy goals under Governor Cuomo,” said John B. Rhodes, President and CEO, NYSERDA. “If NYSERDA is successful in the bidding, we will engage all involved stakeholders and ensure that offshore wind in New York is developed responsibly and in a way that balances the needs of all constituents, including coastal communities and the fishing and maritime industries. We will also ensure that the site will be developed competitively for the greatest benefit for all New Yorkers.”
In addition to being a winning strategy for New Yorkers, NYSERDA’s plans are positive for offshore wind developers. The organization has developed the Offshore Wind Blueprint that creates a framework for the responsible development of wind energy generation off the coast of New York and has launched several site assessment and characterization studies, with plans to initiate many others over the coming months. These activities will inform the state’s comprehensive Offshore Wind Master Plan, originally announced by Governor Cuomo in his 2016 State of the State address.
The Master Plan, to be released in 2017, will identify additional offshore wind sites beyond the current BOEM area being auctioned and will also set targets for capacity and commercial operation dates for each site. After acquiring the new sites, NYSERDA will bundle site assessment and characterization study results with financeable offtake agreements for the purchase of the electricity produced by the turbines, and hold competitive solicitations for each site for companies interested in developing projects.
The studies will help developers better understand the potential for electricity production from each site, the most cost-effective type of structures to build, environmental issues to weigh, and engineering challenges to consider. This reduces risk for developers which in turn reduces the costs of offshore wind energy for New York ratepayers. The cost savings for New Yorkers will be multiple times NYSERDA’s investment to acquire and complete the studies at the sites.
Competition is critical in New York’s plans for offshore wind and has been a component of all of New York’s historical large-scale renewables procurement. Competitive solicitations by NYSERDA for large-scale renewables in New York have led to the successful construction of over 1,900 MW of land-based wind.
NYSERDA is participating in the BOEM auction so it can create competition when it counts – after taking into account stakeholder input regarding how the site is developed, completing studies and bundling the site with an offtake agreement, reducing risks and letting developers reduce margins for unknowns.
NYSERDA’s planned approach to developing offshore wind is modeled after similar approaches used in Europe, which have dramatically reduced offshore wind project costs there. Bloomberg New Energy Finance recently reported that competitive bidding has driven the global cost of energy from offshore wind down 28% in the past 12 months.
Filed Under: News, Offshore wind, Policy, Projects