New York launches renewable energy auctions to backfill likely cancelled projects

Tenders follow state rejection of pricing relief petitions that left over 13GW of offshore wind and land-based development in limbo

The New York harbor and the Jersey City and Manhattan downtown skylines . The Statue of Liberty with a view of both New York and New Jersey.
The New York harbor and the Jersey City and Manhattan downtown skylines . The Statue of Liberty with a view of both New York and New Jersey.Foto: Shutterstock

New York announced its round 4 solicitation for offshore wind and a further procurement for land-based renewable energy to claw back capacity that faces cancellation following failed contract renegotiations.

The procurements are part of governor Kathy Hochul’s 10-point action plan to ensure that the state remains on track to meet its mandates of 70% clean power generation by 2030 and 9GW of offshore wind by 2035.

“These expedited solicitations will continue to build upon our momentum toward achieving a zero-emissions electric grid,” said Doreen Harris, president of the New York State Energy Research & Development Authority (Nyserda).

Nyserda oversees renewable energy development in the state.

New York will need to more than triple installed renewable capacity to meet its climate goals, a report by the state comptroller released last summer noted. As of 2022, 29% of electricity generated by the state came from renewable sources, about three-quarters of this power from legacy hydro capacity.

The state will have to add 20GW of renewable capacity versus 6.5GW in place last year.

Nyserda invited project developers, including “those that previously petitioned the New York State Public Service Commission (PSC) for financial relief and new market entrants,” to compete in the solicitation process.

Joint venture (JV) partners Equinor-BP had sought hikes exceeding 50% for its 3.3GW of offshore wind projects, while the Orsted-Eversource partnership had sought a 27% increase for its 920MW Sunrise Wind array.

Both JVs said that surging inflation and interest rates and ongoing supply chain turmoil had rendered their projects unviable and indicated that they were prepared to walk away, putting the state at risk of not meeting its goals.

A consortium of 7.5GW of land-based renewables developers and a 1.7GW transmission project guided by the Alliance for Clean Energy New York (Ace-NY) had likewise sought contract hikes exceeding 70%, which were likewise rejected by PSC.

“The renewable energy industry is encouraged by New York’s speedy issuance of solicitations for renewable energy projects, both offshore wind power and land-based wind and solar power, knowing that companies are looking forward to competing for these contracts,” said Ace-NY executive director Anne Reynolds.

New York recently announced awards in its round 3 tender for 4GW of new capacity as well as 2.4GW of land-based projects for a total of 6.4GW.
Nyserda confirmed to Recharge that the offshore wind solicitation would max out at 4.2GW due to grid constraints in New York City and Long Island.
No specific quantity is targeted for the land-based procurement “given the dynamic status of the portfolio and the potential for a subset of active contracts awarded under previous solicitations to be terminated”, a Nyserda representative told Recharge.

Critically for the renewables industry, the new solicitations include provisions for inflation indexing.

“Nyserda's issuance today of a major solicitation, providing market-based offtake opportunities for both early and advanced stage offshore wind projects, offers crucial and timely support for New York's rapidly developing clean energy economy,” said New York Offshore Wind Alliance director Fred Zalcman.

Offshore wind bids are due to 25 January next year, with Nyserda expecting to select projects in February.

Land-based renewables solicitation will be bid in two steps, with eligibility requirements due 21 December 21 and final proposals on 31 January. 2024.

Award announcements are expected by the end of April 2024.

Nyserda has previously stated that eligibility in the new rounds includes termination of any existing contracts.

A spokesperson for Orsted-Eversource JV told Recharge: “While we review the RFP and determine our next steps, we know that ready-to-build projects like Sunrise Wind are the only offshore wind farms that can be delivered within the next several years, a timeline that would be critical to meeting the state’s 2030 clean energy targets.”
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Published 30 November 2023, 21:16Updated 1 December 2023, 21:20
AmericasNew YorkNYSERDAKathy HochulDoreen Harris