Posted January 14, 2019
Only one of five developers who intend to vie for a New York State contract for off-shore wind energy is proposing its project off Long Island waters. The rest would be off Massachusetts/Rhode Island or the New Jersey coast, according to recent state filings.
The New York State Energy Research and Development Authority, or NYSERDA, which is overseeing the bids and will award contracts for upward of 800 megawatts of offshore wind energy this year, said the five notices of intent to participate in the state bid represented the strongest response to any state solicitation to date. One megawatt of offshore wind powers around 360 homes. Formal bids are due Feb. 14.
The project located in the New York wind-energy area is off Long Island’s South Shore in waters previously identified by the federal agency responsible for leasing water rights. Another possible developer has offered a project off the New Jersey coast. A state official said all projects would get careful review, and downplayed the notion of their distance from New York.
“I think you have to look beyond the geography,” said Doreen Harris, director of large-scale renewables for NYSERDA, noting that all projects will be reviewed based on their proposed price of energy but also their benefits to the New York economy. She also noted that studies have shown a greater wind-energy resource from the Massachusetts/Rhode Island offshore area and other factors which could offset the potential higher cost to transmit power from the distant turbines.
New York wants to become a major East Coast hub for the wind-energy industry, and even the bids for projects more than 50 miles from Long Island are expected to include ways to involve the state in wind-energy employment, development, manufacturing and maintenance.
The closest proposal for the waters off Long Island is by Norwegian energy giant Equinor called Empire Wind off the coast of Long Beach. Equinor, formerly known as Statoil, in 2016 won an auction for 80,000 acres of offshore wind water rights to erect a wind farm it expects to produce up to 2,000 megawatts, enough to power 1 million homes, at a cost of some $6 billion.
The former Deepwater Wind, the Rhode Island-based company recently acquired by Danish energy company Orsted, already has a contract for 90 megawatts of wind energy it expects to deliver to Long Island Power Authority by the end of 2022, and is bidding in another project in the area in a joint venture with Eversource Energy called Bay State Wind. The company also won authorization by LIPA to increase the size of the project to 130 megawatts.
Two other potential bidders in the Massachusetts area are Vineyard Wind and Mayflower Wind Energy. Atlantic Shores Offshore Wind has proposed the project off New Jersey.
Harris explained that the major reason the projects were based in the Massachusetts/Rhode Island area was that the U.S. Bureau of Ocean Energy Management, or BOEM, had not completed a lease auction for the other areas in the waters off New York, and may not until this year’s end or next year.
The current New York bid solicitation required that developers currently hold lease rights to their proposed projects.
And while it’s not an ideal situation for those proposing New York projects to have operations more than 50 miles away, Harris said NYSERDA was keeping an open mind about the projects. She said the state viewed all the projects as “regional.”
“I had to rethink my view of these large areas of being beholden to one particular state,” she said. “They’re really regional projects.”
Some of the developers have filed applications to bring their energy to the state using a variety of connections, from the LIPA grid to interconnections owned by Con Edison. Some may even connect to grids using the nearby New England grid system, Harris said, and transport energy over interstate transmission lines to New York. Others could enter through the Mid-Atlantic grid known as PJM.
One other complication about using New York as a hub of operations is the limitations caused by bridges, particularly the Verrazano Bridge linking Brooklyn and Staten Island. Harris noted there were “air-draft constraints” for getting particularly tall wind-farm parts to and from Brooklyn ports because of the bridge height limitation, but noted that New York wasn’t the only state dealing with such issues.
And she said companies were looking for ways to creatively deal with it, including shipping tall parts horizontally rather than vertically and considering certain ports that didn’t have air-draft constraints.
In the end, she said, the cost of energy from a project will be the major deciding factor in awarding a contract. Around 70 percent will be based on the price of energy in the company’s offer. Twenty percent will be factored for economic benefits for the New York economy, and 10 percent project viability, Harris said, quoting a Public Service Commission order.