New NYSERDA contracts put two NY offshore wind projects back on track

New York Gov. Kathy Hochul: “ “Offshore wind is foundational to our fight against climate change.”

New York Gov. Kathy Hochul looks to have notched up two more successes in her efforts to get New York State offshore wind back on track. Today she announced that the state has conditionally awarded two offshore wind projects from its fourth offshore wind solicitation: Empire Wind 1, (developed by Equinor) and Sunrise Wind (developed by Ørsted and Eversource).

“I promised to make New York a place for the renewable energy industry to do business, and we are delivering on that promise,” Governor Hochul said. “Offshore wind is foundational to our fight against climate change, and these awards demonstrate our national leadership to advance a zero-emissions electric grid at the best value to New Yorkers.”

Both those projects had previously been awarded contracts by NYSERDA (New York State Energy Research and Development Authority) in 2019, but had been put in doubt when, last October, the New York State Public Service Commission denied petitions that sought to address inflationary pressures on project economics through adjustment to Renewable Energy Credit (REC) and Offshore Wind REC (OREC) purchase and sales agreements entered with NYSERDA.

Under the new contracts, says Gov. Hochul’s office, the projects will be held to new contract provisions that bring additional benefits to the state, including:

• New economic benefit commitments above what was originally contracted, including $32 million committed to community-focused investments in New York’s disadvantaged communities and $16.5 million towards wildlife and fisheries monitoring.
• Commitments to purchasing a minimum of $188 million of U.S. iron and steel, supporting U.S. manufacturing and the New York Buy American Act.
• Requirements for Labor Peace Agreements for operations and maintenance services.
• The average bill impact for customers over the life of these projects under these awards will be approximately two percent, or about $2.09 per month. The weighted average all-in development cost of the awarded offshore wind projects over the life of the contracts is $150.15 per megawatt-hour which is on-par with the latest market prices.
• Following successful contract execution, NYSERDA payments under these awards will only begin once projects have obtained all required permits and approvals, have been completed and begin delivering clean energy to New York.

As mature projects, Empire Wind I, located 15 miles off New York’s shore, and Sunrise Wind, located more than 30 miles east of the eastern point of Long Island, have already completed most federal and state permitting milestones, including Empire Wind I receiving final approval of their Construction and Operations plan from the Bureau of Ocean Energy Management (BOEM) last week. Both projects are expected to ramp up construction activity this year.

That $150.15 per megawatt-hour seems to have made the developers happy enough,

“Governor Hochul and NYSERDA have once again shown their commitment to offshore wind and we are grateful that Empire Wind has been selected to help lead the way,” said Equinor Renewables Americas president Molly Morris. “This is an advanced project that will soon deliver reliable renewable power to hundreds of thousands of New Yorkers, with environmental and economic benefits that begin at the local level and will extend across the state. We thank Governor Hochul and NYSERDA for executing on this expedited process and look forward to continued community engagement as we move toward a groundbreaking at the South Brooklyn Marine Terminal this spring.”

Ørsted Group EVP and CEO Americas David Hardy said, “With these provisional awards in New York’s fourth offshore wind solicitation, we can see all the pieces of the state’s offshore wind economy coming together, and we’re incredibly proud of the role Sunrise Wind will play in this new American clean energy industry. We thank Governor Hochul and her administration for driving this industry forward at a critical moment to the benefit of current and future New Yorkers. Sunrise Wind is on a path to adding nearly a gigawatt of clean energy capacity to New York’s grid by the end of 2026, while creating jobs and new career paths, investing in local communities, diversifying the regional energy mix, and propelling the state toward its clean energy targets.”