Wind

Priciest US offshore wind plot in spotlight as RWE and National Grid scope $1bn site

ANALYSIS | Developers of US' most expensive sector lease so far begin high-tech, all-weather assessment to lower costs and speed path to operations

The project team will work with local scallop fisheries.
The project team will work with local scallop fisheries.Foto: Getty/Boston Globe via Getty Images
  • Tim Ferry
Less than a year after purchasing the US’ most expensive ever lease for wind at sea, partners RWE and National Grid have started site assessments on their 3GW Community Offshore Wind project with the onset of geophysical survey activities they say will be crucial in helping shave cost off the power generated there.
The joint venture (JV) between the German utility and UK network operator paid $1.1bn for a 126,000-acre parcel in the record-setting New York Bight offshore wind tender last February, with enough capacity to power over 1 million homes, according to the developers.
Fuelled by high demand from the states of New York and New Jersey with a combined target of 20GW, the federal auction in the New York Bight saw six leases across 488,000-acres holding at least 5.6GW – and likely far more – sell for $4.37bn.
Virginia Limmiatis, Community Offshore Wind project spokesperson, told Recharge that the geophysical survey work “will satisfy BOEM [Bureau of Ocean Energy Management] guidance and regulations and support the development of project plans” for Community Offshore.

BOEM is the lead regulator of energy development in federal waters.

“The start of the site survey is an important milestone for the project,” said Doug Perkins, president and project director for Community Offshore. “The technical data collected will help us develop a more responsible and cost-effective project design.”

Community Offshore has contracted Dutch marine geotechnical services firm Fugro for the geophysical survey to study seabed conditions within the lease area and potential export cable corridors, which will help inform “safe and responsible project design and engineering, identifying potential geohazards and obstructions, as well as benthic habitats and archaeological resources”.

Fugro will deploy two advanced survey vessels that will be able to work throughout the stormy winter of the North Atlantic coastline, with completion expected this summer.

The geotechnical firm said its advanced, all-weather approach will enable an “accelerated project schedule [which] will help Community Offshore Wind reduce the levelised cost of energy [LCOE]”.

Danish offshore wind consultancy Aegir Insights estimates that high lease prices paid in the New York Bight add $10 to the LCOE, raising it to $68/MWh on average.

The New York Bight is adjacent to the lucrative grounds of a $750m scallop fishery, and to stave off opposition, the developer will have each survey vessel field a liaison “to manage communication and coordinate with fishing fleets”, Community Offshore said.

Community Offshore has “engaged directly with commercial and recreational fishermen [to] promote coordination and successful outcomes and minimise disruption to fishing activities,” said Limmiatis.

State demand driving Bight prices

The New York Bight auction remains an outlier in the US sector, with subsequent tenders in the Carolina Long Bay and off California failing to reach its stratospheric rates.
Prices were driven by strong demand in nearby states, with New York investing $500m into its offshore wind-ready supply chain and port infrastructure to support its 9GW by 2035 goal. The state already has 4.2GW under contract, including the nation’s second industrial-scale project to go into construction, the 132MW South Fork Wind, and is seeking at least 2GW in its Round 3 tender.

The deadline for bid submission into the auction is 26 January, with winners announced later this year.

New Jersey has taken an even larger industry stake, having raised its mandate to 11GW by 2040 and committed $460m to its New Jersey Wind Port, as well as its $1bn grid transmission programme – another first for the state – that will see 6GW of capacity share a single point of interconnection.
The state has 3.2GW under contract and is seeking another 4GW in its Round 3 slated for later this year.

Community Offshore is “keeping its options open” regarding the upcoming auctions, according to Molly Gilson, communications representative for National Grid, while aiming for a 2030 commercial operations date.

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Published 10 January 2023, 14:25Updated 11 January 2023, 15:10
AmericasUSFugroNational GridRWE