New York seeks feedback on new offshore wind tender this year as early projects waver
Sector-leading state seems to have thrown in towel on existing contracted capacity as new round would require projects be cancelled
New York seems to have thrown in the towel on existing contracted capacity as it seeks comment on a new offshore wind tender as early as next month that would require bidders to cancel existing offtake awards.
New York State Energy Research and Development Authority (Nyserda), the agency charged with overseeing the state’s energy transition on Thursday issued a request for information (RfI) seeking feedback on a proposal for a new offshore wind solicitation as early as “late November or early December 2023”, with awards possibly in late January of next year.
Nyserda added a second option for a less compressed timeframe of late January or early February 2024, with awards “made by late Q2 (second quarter) 2024”.
To be eligible in the round, projects “would not be permitted to have an active contract with Nyserda or another OREC [offshore renewable energy credit] offtaker”, the agency said.
“Accordingly, any project with such a contract would be required to terminate the contract,” it said.
New York procures offshore wind power through ORECs, which represent “the environmental attributes associated with one MWh of electricity generated from offshore wind resources,” according to Nyserda.
The developers had sought an average 48% increase to their OREC contracts amid cost inflation, high financing costs, and supply chain turmoil.
Both developers responded by stating that they were assessing their options and held out the possibility of walking away.
Equinor revealed today (Friday) that its New York projects contributed to a $300m impairment charge for the Norwegian state energy firm.
Newly awarded projects include TotalEnergies-led 1.4GW Attentive Energy, RWE-National Grid’s 1.3GW Community Offshore, and Copenhagen Infrastructure Partners' 1.3GW Excelsior Wind.
New York mandates 9GW of offshore wind capacity operational by 2035 towards reaching 70% clean grid by 2030 and net-zero emissions by 2040.
Nyserda is also seeking feedback on new onshore renewable tenders.
Equinor and BP have backed more than $250m in supply chain and port infrastructure investments in New York for their 2.1GW Empire Wind 1 & 2 and 1.2GW Beacon Wind projects.
The JV had sought up to 55% increases to its contracts.
Pressed on what this means, Reitan said Equinor has made clear that it needs to see a “real unlevered return in the region of 6-8%.”
Orsted and Eversource have likewise sparked major investments for their 920MW Sunrise Wind array and are already in offshore installation for their 132MW South Fork project.
South Fork was not included in the petition for offtake renegotiation.
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