The New York Public Service Commission (PSC) has authorized the New York State Energy Research and Development Authority (NYSERDA) to begin issuing 20-year contracts for renewable energy projects, increasing the term from a previous limit of 10 years. Additionally, the PSC directed NYSERDA to issue one main-tier solicitation this year and at least one additional solicitation in 2015.
According to the PSC, the change was made to encourage more renewable energy developers to develop utility-scale renewable projects, such as wind and solar, to help reach New York's 30% by 2015 renewable portfolio standard (RPS). Approximately 10 million MWh are needed to reach New York's 2015 RPS target date.
The RPS process works through renewable energy certificates (RECs), which are awarded to developers through NYSERDA, which administers the RPS program. Because New York is a deregulated market, developers can either sell their power to utilities via a power purchase agreement or on the wholesale electricity market with the RECs added on.
To date, NYSERDA has conducted eight main-tier solicitations resulting in contracts for the annual production of approximately 4.6 million MWh of renewable energy.
In making the change, the PSC says that it has responded to the needs of developers, which have consistently stated a preference for stable, longer-term contracts to hedge risk. Providing developers of large renewable energy projects with longer-term contracts provides greater certainty of future revenues and reduces the risks related to financing the project, notes the PSC.