Two major offshore wind farms slated for New York’s waters are back on track after a brutal 2023 threatened to derail the projects — and the emerging industry’s prospects in the U.S.
On Thursday, New York Gov. Kathy Hochul (D) said the state had selected the 924-megawatt Sunrise Wind project and the 810-megawatt Empire Wind 1 project in its fourth competitive auction for offshore wind contracts. Developers of both projects had secured long-term agreements to deliver clean electricity to the state in 2019. But they opted to replace those contracts and rebid their offshore wind projects in order to secure more favorable terms amid dramatically different economic conditions.
“Offshore wind is foundational to our fight against climate change,” Hochul said in a statement. “These awards demonstrate our national leadership to advance a zero-emissions electric grid at the best value to New Yorkers.”
New York is aiming to build 9,000 megawatts (9 gigawatts) of offshore wind capacity by 2035 — the most ambitious near-term goal in the country, and enough to meet about 30 percent of the state’s total electricity needs. The plan is key to the state’s goal of achieving a carbon-free grid by 2040. Nationwide, the Biden administration has set a goal of installing 30 GW of offshore wind by the end of this decade.
Hi jaagu - thanks for sharing that
This re-negotiation / re-bidding is happening across several high potential offshore wind sites, and it’s good to see NYSERDA has also decided to come to the table with a way forward from the prevailing lose-lose scenario
Unfortunately, many of the dealbreakers that have plagued US offshore wind in 2023 are still ominously present - high costs, interest rates, Jones Act restrictions, lack of local expertise/ infrastructure, tortuous permitting… - with little hope of respite any time soon
The previous contracts were apparently negotiated based on rather unrealistic assumptions about many of these issues, and I hope the new ones have built in sufficient margins of safety - at least for these known unknowns
The good news is that Orsted already has a visible US track record in its Rhode Island and Long Island wind farms, and has bitten the bullet in terms of restructuring and refocusing on a more realistic portfolio of projects
" State officials said that, for the two winning projects, the weighted average all-in development cost is $150.15 per megawatt-hour over the life of the contracts. That’s significantly higher than the projects’ all-in development cost of $83.36 per MWh announced in October 2019, when NYSERDA finalized the first contracts for Empire Wind and Sunrise Wind."
150.15/83.36 ==> 80% increase
“The average bill impact for residential customers is now expected to be about $2.09per month, up from 73 cents per month under the original agreements.”
Its hard to image use of US crews for shipping will be a deal breaker. Yes, use of international flag vessels and crews will save money but is that significant.
They tell us ships equipped to move the very large turbine blades are in short supply. A few more projects might approve additional ship building. Spreading the service life over a few decades should do much to reduce costs.
The Jones Act is a major bottleneck for any offshore wind projects because the US currently doesn’t even have a single vessel capable of either handling the gigantic (and still increasing) turbine sizes, or installing them.
Only one is under construction currently - the WTIV (Wind Turbine Installation Vessel) Charybdis - already a year behind schedule and almost $100 million over budget.
I’m sure you can imagine what that is doing to all the offshore wind vendors vying to get their hands on it, and the prices they will be forced to pay
