New York State released a master plan for offshore wind development on Monday, as it looks to develop 2.4GW of capacity in the sector by 2030.
Andrew Cuomo, New York’s governor, has said the state will solicit 800MW in offshore wind power over the next two years. The aim is to generate half the state’s energy from renewable sources by 2030.
“The development of offshore wind resources would provide energy where the state’s energy system is most strained – New York City and Long Island [in southeast New York State],” the master plan states. The strategy identified two areas south of Long Island as prime locations for offshore wind, with each capable of supporting upwards of 800MW in capacity.
A policy paper released alongside the master plan evaluated various procurement methods for future offshore wind development. Past large-scale renewables auctions have been procured under a fixed renewable energy credit system, under which winning projects received a fixed REC price throughout the life of the contract. This leaves them without a hedge against changes in commodity electricity prices, the paper warned.
“The risks and rewards of fluctuations in the energy and capacity markets remain with the project developer,” the paper stated. “This elevated risk to the developer leads to increased cost of capital and thus higher projected programme costs than those expected under other procurement options with more far-reaching hedging benefits.”
Other options explored in the policy paper included a bundled power-purchase agreement; utility-owned generation; a split PPA; and several offshore wind renewable energy credit programmes.
The offshore wind market in the US has lagged that of Europe. The country’s first offshore wind project, the 30MW Block Island Wind Farm off Rhode Island, launched operations in December 2016. A handful of additional projects are planned along the East Coast, including one off the eastern tip of Long Island. Statoil, a Norwegian firm, has also leased an 80,000-acre site off Long Island’s southern coast for the planned Empire Wind project.