SOURCE:
https://www.politico.com/news/2024/04/19/new-york-offshore-wind-canceled-00153319
By MARIE J. FRENCH - April 19, 2024
The decision is another setback to New York’s aspirations to achieve 70 percent renewable energy by 2030 and be a hub for the nascent industry in the United States.
ALBANY, New York — New York’s signature offshore wind projects meant to boost confidence in the industry are being scrapped, a major hit to the industry in the state and the nation.
The decision is another setback to New York’s aspirations to achieve 70 percent renewable energy by 2030 and be a hub for the nascent industry in the United States. It will also be another challenge for President Joe Biden’s already likely out-of-reach 30 gigawatt goal for offshore wind by 2030.
NYSERDA, the state authority in charge of the deals, announced Friday that no final agreements could be reached with the three projects that received provisional awards in October 2023. Those bids were all linked to major supply chain investments by General Electric and a larger turbine it planned to build that was aimed at boosting the region’s renewable energy portfolio.
“Subsequent to the provisional award announcement, material modifications to projects bid into New York’s third offshore wind solicitation caused technical and commercial complexities between provisional awardees and their partners, resulting in the provisionally awarded parties’ inability to come to terms,” NYSERDA wrote in an announcement.
In February, POLITICO’s E&E News reported that GE didn’t plan to move forward with an 18 megawatt turbine. NYSERDA confirmed that was the main reason no final awards were made. A smaller turbine means a project would need more individual turbine locations to deliver the same power — and the costs would have been higher.
NYSERDA had also tentatively awarded $300 million to GE Vernova and LM Wind Power for investments in nacelle and blade manufacturing at new facilities along the Hudson River near Albany. That money will be made available through a new competitive solicitation, according to the authority.
“NYSERDA remains committed to advancing New York’s offshore wind industry in pursuit of the state’s Climate Act goals,” spokesperson Kate Muller said in a statement. “Next steps will be announced in the near future.”
The authority was already expected to start another round of offshore wind bids and may accelerate those efforts. NYSERDA’s schedule for the offshore wind projects called for contracts to be executed by the end of last month. GE did not immediately respond to a request for comment.
It’s not the total end of offshore wind in New York but does represent a setback. There are still some projects off the coast of Long Island and New Jersey on the drawing board and one is already operational.
The projects that were negotiating contracts are the 1,404 MW Attentive Energy One project being developed by TotalEnergies, Rise Light and Power and Corio Generation; the 1,314 MW Community Offshore Wind project developed by RWE Offshore Renewables and National Grid Ventures; and the 1,314 MW Excelsior Wind developed by Vineyard Offshore with backing from Copenhagen Infrastructure Partners.
But those would now need to rely on smaller 15.5 MW turbines — which means the developers would have needed to buy more and install more massive underwater foundations to put each turbine atop. As a result, it adds time and labor costs to each project.
The unsuccessful solicitation comes after several blows to the industry in the U.S. in the past year, indicating the high costs and regulatory hurdles each project faces — along with the concern over socking utility customers with higher bills to pay for them.
New York awarded the three projects after the state Public Service Commission last fall rejected a request for higher prices from other developers. The PSC drew a line in the sand that likely constrained NYSERDA’s negotiations: no price increases for competitively awarded projects.
Other early projects canceled their deals after the decision, and similar moves have upended efforts in other states.
The state’s utility regulator — publicly backed by Gov. Kathy Hochul’s administration — has held firm on its policy of limiting rate increases on consumers, even as a transmission line running into New York City that supports the 2030 target faces financial uncertainty.
Environmental advocates are alarmed by the challenges facing the industry. Offshore wind is key to reaching New York’s goal of 70 percent renewable energy sources by 2030, along with other longer-term targets. But there is growing evidence that the mandate will be hard to reach.
“We are very concerned about not meeting the climate goals,” Adrienne Esposito, executive director of the Citizens Campaign for the Environment, said before NYSERDA’s announcement. “All three of these are in a holding pattern and we need a flight plan.”
But some environmental groups were optimistic that NYSERDA would be able to stay on track.
“I don’t think it’s going to create a big setback as far as time goes,” said Julie Tighe, the president of the New York League of Conservation Voters. “I remain hopeful that we’ll be able to get some more projects online by 2030.”
It is possible that some of the project developers might turn their attention to winning awards in New Jersey, where another solicitation is expected later this year.
New York also has pending contracts still in the works for the two early projects that were reawarded at significantly higher costs for ratepayers. The two projects are the 810 MW Empire Wind 1 developed by Equinor that is south of New York City and the 924 MW Sunrise Wind developed by Orsted and Eversource off the northeast tip of Long Island.
NYSERDA’s schedule calls for those contracts to be finalized by the end of June. Those are expected to be online by late 2026.
CORRECTION: An earlier version of this report misstated the locations of two projects by Equinor, Orsted and Eversource.