New York’s ambitious offshore wind projects, designed to instill confidence in the industry, have been unexpectedly abandoned. This setback deals a significant blow to both the state and the nation’s renewable energy sector.
New York’s hopes of reaching its goal of achieving 70 percent renewable energy by 2030 and becoming a major player in the emerging offshore wind industry have suffered another blow with this decision. Furthermore, President Joe Biden’s ambitious target of 30 gigawatts of offshore wind by 2030 is likely to face even greater challenges.
NYSERDA, the state authority responsible for the agreements, stated on Friday that it was unable to finalize deals with the three projects that were granted provisional awards in October 2023. These bids were associated with significant supply chain investments by General Electric and a larger turbine intended to enhance the region’s renewable energy portfolio.
In an announcement, NYSERDA explained that the provisional awardees and their partners encountered technical and commercial complexities due to material modifications made to projects bid into New York’s third offshore wind solicitation. As a result, they were unable to come to terms.
According to a report from POLITICO’s E&E News in February, GE decided not to proceed with an 18 megawatt turbine. NYSERDA has confirmed that this was the primary reason why no final awards were given. The decision not to pursue the larger turbine size would have required more individual turbine locations to generate the same amount of power, resulting in higher costs for the project.
NYSERDA has tentatively granted $300 million to GE Vernova and LM Wind Power for their investments in nacelle and blade manufacturing. These investments will be made in new facilities located along the Hudson River near Albany. The authority has announced that the funds will be made available through a new competitive solicitation.
“NYSERDA is still dedicated to driving the growth of New York’s offshore wind industry as part of its efforts to achieve the state’s Climate Act objectives,” stated Kate Muller, a spokesperson for NYSERDA. She also mentioned that they will be unveiling their next steps soon.
The authority was already planning to commence another round of offshore wind bids and could potentially expedite those efforts. NYSERDA had set a timeframe for the offshore wind projects, with the intention of executing contracts by the end of the previous month. GE has not yet responded to a request for comment.
While this setback does not mark the complete end of offshore wind in New York, it does represent a significant hurdle. However, it’s important to note that there are still several projects in the pipeline off the coast of Long Island and New Jersey, with one already up and running.
The projects currently in contract negotiations include the Attentive Energy One project, which has a capacity of 1,404 MW and is being developed by TotalEnergies, Rise Light and Power, and Corio Generation. Another project is the Community Offshore Wind project, with a capacity of 1,314 MW, developed by RWE Offshore Renewables and National Grid Ventures. Lastly, there is the Excelsior Wind project, developed by Vineyard Offshore and backed by Copenhagen Infrastructure Partners, with a capacity of 1,314 MW.
But now, developers would have to depend on smaller 15.5 MW turbines. This implies that they would need to purchase more turbines and install larger underwater foundations to support each turbine. Consequently, these changes would lead to increased time and labor costs for each project.
The solar industry in the U.S. has faced several setbacks in the past year, which have led to unsuccessful solicitation attempts. These challenges highlight the significant costs and regulatory obstacles that each project must overcome. Additionally, there is a growing concern about the potential burden on utility customers who may have to bear higher bills to support these initiatives.
New York has granted the three projects after the state Public Service Commission rejected a request from other developers for higher prices last fall. The PSC set a firm boundary that likely limited NYSERDA’s bargaining power: no price increases for projects awarded through competitive means.
Several other early projects followed suit and backed out of their deals following the decision. This trend has also disrupted initiatives in various other states.
The state’s utility regulator, with the support of Governor Kathy Hochul’s administration, maintains its stance on limiting rate increases for consumers. This commitment remains steadfast, despite the financial uncertainty surrounding a transmission line that supplies New York City and supports the 2030 target.
Environmental advocates are expressing concern about the challenges that the industry is currently facing. Offshore wind plays a crucial role in achieving New York’s target of sourcing 70 percent of its energy from renewable sources by 2030, as well as other long-term goals. However, there is increasing evidence suggesting that meeting this mandate will be a formidable task.
Adrienne Esposito, the executive director of the Citizens Campaign for the Environment, expressed deep concern about the failure to meet climate goals. In anticipation of NYSERDA’s announcement, she emphasized the urgent need for a clear plan of action. “All three of these initiatives are currently at a standstill, and we cannot afford to be directionless,” she stated.
However, there was a sense of optimism among certain environmental groups that NYSERDA would be able to maintain its progress.
According to Julie Tighe, the president of the New York League of Conservation Voters, she believes that the current situation will not cause a significant delay in terms of time. She remains optimistic that more projects will be completed and operational by 2030.
Some of the project developers may shift their focus to winning awards in New Jersey, as another solicitation is anticipated later this year.
New York has two pending contracts that are still being finalized for the two early projects, which were reawarded at significantly higher costs for ratepayers. One of the projects is the Empire Wind 1, developed by Equinor, with a capacity of 810 MW. It is located south of New York City. The other project is Sunrise Wind, developed by Orsted and Eversource, with a capacity of 924 MW. It is situated off the northeast tip of Long Island.
NYSERDA aims to finalize those contracts by the end of June, with expectations of having them online by late 2026.
