New York Finalizes Offshore Wind Contracts

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The New York State Energy Research and Development Authority (NYSERDA) has finalized offshore wind contracts with Equinor Wind US LLC for its 816 MW Empire Wind Project and Sunrise Wind LLC – a joint venture of Ørsted A/S and Eversource Energy – for its 880 MW Sunrise Wind Project. Meanwhile, NYSERDA has also released a report detailing the projects and their expected benefits for the state.

Representing the largest procurement for offshore wind in the nation’s history, the projects advance New York Gov. Andrew M. Cuomo’s Green New Deal goal to develop 9 GW of offshore wind by 2035. Combined, the offshore wind farms are expected to produce enough power for more than 1 million New York homes. The projects were selected in July through the state’s first comprehensive offshore wind solicitation.

“New Yorkers know all too well the devastating impacts of climate change and the catastrophic consequences if we do not act urgently,” says Cuomo. “By finalizing the contract awards for the nation’s largest offshore wind procurement, we are realizing the positive impacts these projects will have on the environment while diversifying our economy and bringing significant economic benefits to the Empire State.”

“Today, Equinor is excited to join Governor Cuomo and NYSERDA in securing our commitment to delivering renewable offshore wind energy to New York and meeting New York State’s ambitious renewable energy goals,” says Christer Geijerstam, president of Equinor Wind US. “Equinor’s Empire Wind project is a key part of the state’s new offshore wind industry, bringing not only homegrown renewable energy, but also new jobs and substantial economic development.”

“Thanks to the leadership of Governor Cuomo, NYSERDA and New York, Sunrise Wind is helping secure the state’s role as a leader in the North American green energy transformation,” adds Thomas Brostrøm, CEO of Ørsted U.S. Offshore Wind and president of Ørsted North America. “Ørsted and Eversource will help ensure that New Yorkers not only benefit from green, renewable power, but that they reap the rewards of being an early player in this growing industry.”

NYSERDA also concurrently submitted a comprehensive filing, “Launching New York’s Offshore Wind Industry: Phase 1 Report,” to the New York State Department of Public Service (DPS). The report documents the successful results of New York’s offshore wind solicitation and provides details about these highest-scoring projects.

As detailed in the report submitted to DPS, the state’s first large-scale offshore wind solicitation resulted in offshore wind renewable energy certificate (OREC) prices approximately 40% less than was projected in NYSERDA’s 2018 analysis, signaling that the costs to deploy offshore wind are rapidly declining. An OREC represents the environmental benefits associated with one megawatt-hour of electricity generated from offshore wind resources and consumed by retail customers in New York State. By compensating offshore wind generators for these investments, ORECs provide financial support to lay the groundwork for the industry to take root, which will yield growing dividends for New Yorkers as the industry matures, says NYSERDA.

Other key findings from the report include as follows:

  • Intense competition: Four developers submitted a total of 18 proposals.
  • Cost-effectiveness: The Empire Wind and Sunrise Wind projects have an average all-in development cost of $83.36 per megawatt-hour (2018 dollars) with an expected average OREC cost of $25.14 per megawatt-hour. The average bill impact for residential customers will be less than a dollar per month per customer – approximately $0.73.
  • Innovative Contracting Structure: The contracts use an index OREC contracting structure, which provides protection for ratepayers.
  • Environmental, Fishing and Ocean Use Priorities: The award group demonstrated a strong commitment to actively address the interests of ocean users and also ensure that coastal communities will be fully engaged and informed.
  • Protecting New York Families: Additionally, projects will provide approximately $700 million of avoided health impact benefits in the form of avoided hospitalization and premature death associated with asthma and respiratory and cardiovascular diseases.
  • Kick-starting a Powerhouse Clean Energy Industry in New York: The awarded projects will spur New York’s clean energy industry with $3.2 billion in combined economic impacts to upstate, downstate and Long Island; more than $85 million investments in long-term port facilities and technologies; and over 1,600 new jobs in project development, component manufacturing, installation, and operations and maintenance. Efforts to best capitalize on the private investments in long-term port facilities and technologies should be considered in tandem with Cuomo’s $200 million state funding to unlock private capital in supporting critical port infrastructure, the report says.

“By every measure, New York’s first offshore wind procurement was a resounding success, and the execution of contracts today signifies a major milestone in our nation-leading pursuit to deliver clean, locally produced power to millions of New York homes and businesses,” says Alicia Barton, president and CEO of NYSERDA. “These projects, which represent the largest-ever renewable energy procurement made by a state in U.S. history, will deliver tremendous economic benefits and provide jobs to thousands of New Yorkers.”

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