New York on Tuesday issued its much-anticipated request for proposals for up to 2.5 gigawatts of offshore wind capacity, setting up the U.S. market to add at least one more big project — and perhaps several — to its pipeline by the end of the year.
New York also put out a solicitation for 1.5 gigawatts of onshore renewables; put together, the two procurements represent the largest clean-energy solicitation in U.S. history, state officials said.
In a twist, offshore developers will be required to partner with a local port to help build any winning projects; New York is competing aggressively with New Jersey, Connecticut and other states to attract offshore wind jobs and manufacturing facilities.
The state is offering $200 million in public funding to upgrade its port infrastructure for the coming East Coast offshore wind boom, to be paired with the same amount of private funding. Last year 11 ports were prequalified for the funding, ranging from smaller sites on Long Island that would serve as hubs for operating projects to larger facilities in Brooklyn and along the Hudson River that could potentially host factories.
Last month New Jersey announced a plan to build an offshore wind port on an artificial island near a PSEG nuclear plant along the Delaware River, which could potentially grow to cover 150 acres and draw in $400 million of investment. No major offshore wind factories have yet been announced in the U.S., though many industry participants are confident that they will materialize eventually.
New York concluded its first competitive offshore wind solicitation one year ago, awarding 1.7 gigawatts of capacity to two huge projects backed by Denmark’s Ørsted and Norway’s Equinor. In addition, Ørsted and its utility partner Eversource have a contract to sell power from the 135-megawatt South Fork project onto the eastern tip of Long Island.
New York is targeting 70 percent renewable electricity by 2030 and 9 gigawatts of offshore wind by 2035 — the highest offshore target in the country. The entire U.S. market has just 42 megawatts of installed offshore wind capacity today but is on track to add 25 gigawatts by the end of the decade, Wood Mackenzie forecasts.
New York’s second offshore wind solicitation appeared likely to experience a delay due to the coronavirus pandemic, but in the end, officials released the solicitation sooner than many were expecting, framing it as a way to help revive the battered economy.
“During one of the most challenging years New York has ever faced, we remain laser-focused on implementing our nation-leading climate plan and growing our clean energy economy,” Gov. Andrew Cuomo said in a statement.
In the solicitation, New York is seeking at least 1 gigawatt of offshore capacity and as much as 2.5 gigawatts. Individual project bids can range from 400 megawatts to the full 2.5 gigawatts. Larger projects have generally outperformed smaller ones in the handful of competitive U.S. offshore wind solicitations held so far.
Bids are due in October, and the winning projects will be announced in the fourth quarter of 2020.
The list of projects that could conceivably bid into New York’s solicitation is fairly short, potentially giving Ørsted, Equinor or Vineyard Wind (owned by Avangrid and Copenhagen Infrastructure Partners) another big contract. New York and New Jersey are anxiously awaiting further lease sales in the “New York Bight” area south of Long Island that would lead to more projects and increased competition for future contracts.
After a setback last year when Vineyard Wind’s 800-megawatt project off Massachusetts ran into permitting delays, the incipient U.S. offshore wind market now seems to be recovering its footing. Federal regulators at the Bureau of Ocean Energy Management recently completed their “supplemental” environmental study of Vineyard’s project and its cumulative impacts, with no major surprises. Vineyard is hoping to have its final federal permits in hand by the end of the year, with major construction to start in 2021.
Also on Tuesday, the New York State Energy Research and Development Authority and the New York Power Authority issued a joint solicitation for 1.5 gigawatts of onshore solar and wind, in the fourth installment of the regular onshore procurements the state has held since 2018.
While onshore wind farms dominated the earlier rounds, solar took home the lion’s share in the third installment, reflecting a broader shift in the U.S. onshore renewables market.