• Offshore Wind
  • Wind Power
  • US Wind Generation
  • New York State

Who Will Win 800 MW of New York State Offshore Wind?

Jesse Broehl
Dec 11, 2018

Wind Energy 4

New York State has launched its initial salvo into sourcing 50% of its electricity from renewables by 2030, including 2.4 GW of offshore wind capacity. New York has launched a request for proposals (RFP) for at least 800 MW of offshore wind capacity.

Developers are directed to propose at least one proposal at around 400 MW of capacity and New York State Energy Research and Development Authority (NYSERDA) will award projects ranging from 200 MW to 800 MW. The deadline for intent to propose is December 20, 2018. Formal proposals are due February 14, 2019 and are required to be valid and firm for 180 days after that date (RFP details here). NYSERDA expects to announce the related winners in April 2019. Winners will receive 25-year offshore wind renewable energy certificates.

Who Is Bidding?

A few prominent developers are well positioned to submit a bid. Upward of 16.9 GW of offshore wind site leases in federal waters along the eastern seaboard have already been awarded for projects in various stages of early development. Most are waiting for a power contract, such as this RFP in New York.

One company especially well-poised to submit a bid is Norway-based Equinor (formerly Statoil). In early 2017, the US subsidiary of Equinor won the rights to develop an offshore wind farm south of Long Island through the federal lease auction process (see the figure below). Its winning bid offered to pay the US Department of the Interior (DOI) $42.5 million for the lease rights to develop. This was more than twice the total of winning bids in 11 other previous offshore wind power auction sites combined and reportedly more than twice the value of offshore oil & gas permits in auction under the DOI in the Gulf of Mexico at the time.

New York Offshore Wind Lease Areas

New York Offshore Wind Lease Areas

(Source: RTO Insider)

Note: DONG Energy sites reference Orsted, Statoil references Equinor, and OffshoreMW references Vineyard Wind, an Avangrid subsidiary

Why Bid?

Equinor was willing to make such a large financial commitment because its winning lease area is located 14-30 miles offshore, spans 79,350 acres and covers water depths of 65 feet-131 feet (20 m-40 m). The area, now named by Empire Wind by Equinor, could accommodate more than 1 GW of wind capacity. This is the closest location to New York City awarded a site lease. The proximity to the high priced electricity market is a clear advantage.

Other developers are likely to submit bids; however, their transmission costs will inevitably be higher since their development sites are farther away. These are Denmark-based Orsted, US Wind (subsidiary of Italy based Renexia S.p.A.), and Vineyard Wind (subsidiary of Avangrid).

Other Notable Moves

Orsted has made waves in the US offshore sector lately by recently acquiring US-based developer Deepwater wind. Orsted’s acquisition of Deepwater Wind provides it access to the offshore wind lease site area, named South Fork, that Deepwater won between Long Island and Massachusetts. Deepwater previously secured a 90 MW power purchase agreement for that project to feed into Long Island. The island is effectively limited to little more than the initial 90 MW. However, the site location could be built out significantly in a second stage if connected to the mainland with a longer transmission line. There are already cost efficiencies to have a 90 MW stage contracted.

Orsted also has a federal lease site off the coast of New Jersey and Massachusetts. These areas would also require longer and costlier transmission lines to bid into New York’s RFP. Likewise, Vineyard Wind (Avangrid) and US Wind will also likely submit bids despite also having longer transmission challenges. April 2019 will reveal which company is on track to build another large US offshore wind project.