New York’s Offshore Wind Strategy

The state of New York has recently released the much anticipate offshore wind strategy. The strategy is entitled, “Offshore Wind Master Plan” is designed to enable the state to develop offshore wind capacity of 2.4 GW by 2030. The state is considering the following seven procurement options in accordance with the Offshore Wind Master Plan:

  1. Bundled Power Purchase Agreement (PPA): A utility competitively procures offshore wind projects and makes an all-in, fully-hedged revenue stream for commodity value and RECs available to winning projects.
  2. Utility-Owned Generation (UOG):Offshore wind developers would develop, design, build, and potentially operate offshore wind facilities; and once completed, project ownership would be transferred to the utility or utilities.
  3. Split PPA: NYSERDA fixed-price REC procurement is paired with fixed-price commodity energy and capacity procurement by a utility.
  4. Index OREC: NYSERDA provides a premium payment to projects under an OREC contract based on the net difference, from time to time, between the project’s winning bid price (expressed as an all-in revenue amount) and the average commodity market price as expressed in a market index or composite of indices, whether the project sold its commodities into the regulated wholesale markets or not.
  5. Forward OREC: Payment is given to winning projects that would adjust every two years, allowing for both upward and downward adjustment of payments—the OREC premium level of each two-year period would be calculated prior to the beginning of the tranche according to two-year energy and capacity price forecasts or forward indices and would remain fixed for the duration of the tranche.

New York took two years to develop the Offshore Wind Master Plan based on research and industry stakeholder input. According to the master plan, the state will continue outreach and public engagement about offshore wind development and convene technical working groups focused on fishing, maritime commerce, the environment, jobs, and the supply chain.

In my opinion, New York is showing leadership in the development of offshore wind in the United States. Similar leadership is being shown in the states of New Jersey, Rhode Island, Massachusetts and Ohio. The offshore northeastern region of the United States has strong and consistent wind resources. However, the strongest and most consistent winds in the United States are offshore Oregon and northern California. Oregon, why are our state legislators pursuing offshore wind energy? Oregon is rich in renewable energy resources like wind energy, hydroelectric and geothermal. Oregon should be proactive in moving away from fossil fuels (coal, oil and natural gas) and to renewable energy.

 

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