Written by
Nick Blenkey
Picture: BOEM
On the finish of the day, electrical energy generated from offshore wind needs to be paid for from shoppers’ electrical energy payments. When these charges aren’t excessive sufficient to justify the massive funding required to get an offshore wind farm up and operating, builders stroll away as underscored by BOEM’s failed Texas offshore wind lease public sale and the U.Ok.’s failed contracts for distinction public sale. These have been auctions for brand new wind farms. Now, following a New York State Public Service Fee ruling, some present U.S. tasks might stall.
The fee yesterday denied petitions submitted by Empire Offshore Wind LLC, Beacon Wind LLC, Dawn Wind LLC, and the Alliance for Clear Vitality New York, Inc. (ACENY).
Trying to tackle current inflationary pressures impacting challenge economics, the petitions have been in search of adjustment to Renewable Vitality Credit score (REC) and Offshore Wind REC (OREC) buy and gross sales agreements entered with NYSERDA.
The fee says that it discovered that the contract amendments sought “weren’t in the perfect curiosity of the state’s ratepayers” and that, on a month-to-month invoice foundation, granting the request might have resulted in as excessive as 6.7% will increase for residential clients and as excessive as 10.5% for business or industrial clients on month-to-month payments.
You possibly can learn extra on the fee’s reasoning right here.
Empire Offshore Wind and Beacon Wind are joint ventures between Equinor and BP and Dawn Wind is a three way partnership between Ørsted and Eversource.
DEEPLY DISAPPOINTING
The Alliance for Clear Vitality New York, which filed its petition on behalf of the 86 upstate New York wind and photo voltaic tasks, says the fee’s choice impacts 81 utility-scale solar energy tasks and 5 land-based wind energy tasks, totaling 7.5 GW of energy era, and 4 offshore wind tasks, totaling 4.2 GW.
“The renewable power business is deeply upset with the fee’s unlucky ruling denying aid for renewable power tasks coping with unprecedented inflation within the wake of the COVID-19 pandemic,” mentioned Anne Reynolds, govt director of the Alliance for Clear Vitality New York. “The choice is short-sighted. We have been hoping the fee would act strategically on behalf of ratepayers and the atmosphere; as an alternative, their choice will lead to elevated prices and greenhouse fuel emissions.”
“At this time’s PSC choice denying aid to the portfolio of contracted offshore wind tasks places these tasks in severe jeopardy and offers a probably deadly blow to the progress these tasks have made to localize clear power manufacturing, reinvigorate New York’s ports and harbors, prepare and deploy New York’s expert union employees, and revitalize environmental justice communities,” mentioned New York Offshore Wind Alliance director Fred Zalcman. “These 4 tasks characterize almost half the offshore wind capability New York has dedicated to develop by 2035, and will they be allowed to fail, the state should redouble its efforts to make up this shortfall and honor its dedication to local weather progress.”
POTENTIAL RE-BID?
“Throughout the fee assembly, the Division of Public Companies spokesperson ‘notes the potential to carry a re-bid,’ however didn’t present every other element,” mentioned Reynolds. “We’ll watch re-bid developments intently however observe that New York is already six months late in issuing the 2023 solicitation beneath the Clear Vitality Normal for Tier 1. New York additionally has but to problem awards within the pending offshore wind solicitation and hasn’t introduced awards ensuing from the Tier 1 solicitation from 2022. Some large-scale tasks going through huge milestone funds want better certainty than afforded by right this moment’s choice, and sadly will possible cancel tasks and withdraw from the New York market. Different tasks could have the flexibility to re-bid, and we do anticipate that many will re-bid. We additionally anticipate that collectively, lots of of hundreds of thousands of {dollars} that have been invested as contract deposits will probably be misplaced; the bid costs will probably be larger primarily based on the identical inflation pressures we described in our petition; the 2024 building season will probably be missed; and numerous grid interconnection deadlines will probably be missed.”
Not all observers of the business imagine that Reynolds’ direst predictions will come true, however clearly quite a lot of rethinking and restrategizing is happening at main clear power builders and provide chain partnert=s who’ve already dedicated hundreds of thousands to New York State offshore wind.
