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Researched by Industrial Info Resources (Sugar Land, Texas)--Late last week, the New York Public Service Commission (PSC) rejected a request from energy companies BP (NYSE:BP) (London, England), Equinor (NYSE:EQNR) (Stavanger, Norway), Orsted (Fredericia, Denmark) and other renewable energy developers for an increase in subsidies to help fund the construction of four offshore wind power projects and 86 land-based renewable energy projects. The developers have warned that the lack of additional funding threatens the viability of the projects, particularly the offshore wind projects.
At the heart of the decision is not only New York's rejection of a cost increase to ratepayers, but also the gumption to stick by its original contracts. PSC Chair Rory Christian told news media, "By rejecting this relief, we signal to every vendor that our contracts, our commitments are worth the paper they are written on. We signal that ratepayer funds are not an unlimited piggy bank for anyone's disposal." The PSC estimated the bill increases would be as high as 6.7% for residential customers and 10.5% for commercial customers.
The decision also highlights the state's drive to maintain a competitive power sector. "The relief sought is inconsistent with commission policy favoring competition in electric generation procurement to ensure just and reasonable rates," Marco Padula, the director of markets and innovation at New York's Department of Public Service, told the PSC before the vote on the order. Developers countered that the original contracts didn't account for the inflation and higher interest rates that have developed in recent years.
Among the offshore wind projects that developers had targeted for increased funding was the planned Sunrise facility off the coast of Long Island. The project was expected to begin construction next year, putting it on track for completion in 2027, when it would provide approximately 880 megawatts (MW) of power. But a lack of additional funding could jeopardize the project. "Sunrise Wind's viability and therefore ability to be constructed are extremely challenged without this adjustment," Orsted Americas chief executive David Hardy told Reuters in an email. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can click here for more details on the project.
BP and Equinor requested additional subsidies for three joint offshore projects: Empire Wind 1 and 2, and Beacon Wind. The Empire projects are planned for an approximately 80,000-acre site 15 miles south of Long Island. As originally envisioned, the initial Empire 1 facility would use 54 turbines, each rated at 15 MW, to achieve nameplate generation of 810 MW. The project was expected to be completed in 2026, following which construction on the Empire 2 offshore windfarm would begin. This addition would be even larger than the original windfarm, using approximately 80 15-MW turbines to add another 1,200 MW of nameplate generation capacity. This portion of the project was expected to begin operations in 2029. Subscribers can learn more by viewing the project reports on Empire 1 and Empire 2.
Another Equinor-BP project that could be affected by the New York decision is the Beacon Wind project, planned for waters about 20 miles south of Nantucket, Massachusetts, but that will supply locations throughout the U.S. Northeast. The first phase of the Beacon project calls for the construction of 123 turbines, each rated at 10 MW, to provide more than 1,200 MW of power. The project was expected to go into operation in 2027. The 128,000-acre site leaves room for expansion, and the two companies are in the early planning stage of adding 117 10-MW turbines to the windfarm to provide another 1,170 of generation. Subscribers can learn more by viewing the project reports on the original windfarm and planned addition.
In addition to the companies involved in offshore projects, an "inflation adjustment" was sought by the Alliance for Clean Energy New York on behalf of other renewable energy companies, including NextEra Energy Incorporated (NYSE:NEE) (Juno Beach, Florida) and EDF Renewables North America (Houston, Texas), which together account for more than $5 billion worth of active renewable energy projects in New York. Among the companies' planned onshore projects in the state is NextEra's 300-MW Declaration solar farm near Romulus (see project report) and EDF's planned 350-MW Columbia solar farm near Ilion (see project report), among many others.
New York's decision puts at stake not only national offshore wind goals, but also the state's own renewable energy goals. The Biden administration has set the lofty goal of having 30 gigawatts (GW) of offshore wind power in place in the U.S. by 2030, and the affected offshore projects could potentially account for more than 15% of this. New York itself has some of the loftiest renewable energy goals of any U.S. state, aiming to have 70% of its electric load served by renewables by 2030 and 9,000 MW of offshore wind by 2035.
Following the PSC's decision, the administration of New York Governor Kathy Hochul (D) said it would launch an accelerated procurement process for both onshore and offshore renewable energy projects "to backfill any contracted projects which are terminated."
Subscribers to Industrial Info's GMI Power Database can click here to view reports for all of the projects discussed in this article and click here to view the related plant profiles.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).
At the heart of the decision is not only New York's rejection of a cost increase to ratepayers, but also the gumption to stick by its original contracts. PSC Chair Rory Christian told news media, "By rejecting this relief, we signal to every vendor that our contracts, our commitments are worth the paper they are written on. We signal that ratepayer funds are not an unlimited piggy bank for anyone's disposal." The PSC estimated the bill increases would be as high as 6.7% for residential customers and 10.5% for commercial customers.
The decision also highlights the state's drive to maintain a competitive power sector. "The relief sought is inconsistent with commission policy favoring competition in electric generation procurement to ensure just and reasonable rates," Marco Padula, the director of markets and innovation at New York's Department of Public Service, told the PSC before the vote on the order. Developers countered that the original contracts didn't account for the inflation and higher interest rates that have developed in recent years.
Among the offshore wind projects that developers had targeted for increased funding was the planned Sunrise facility off the coast of Long Island. The project was expected to begin construction next year, putting it on track for completion in 2027, when it would provide approximately 880 megawatts (MW) of power. But a lack of additional funding could jeopardize the project. "Sunrise Wind's viability and therefore ability to be constructed are extremely challenged without this adjustment," Orsted Americas chief executive David Hardy told Reuters in an email. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can click here for more details on the project.
BP and Equinor requested additional subsidies for three joint offshore projects: Empire Wind 1 and 2, and Beacon Wind. The Empire projects are planned for an approximately 80,000-acre site 15 miles south of Long Island. As originally envisioned, the initial Empire 1 facility would use 54 turbines, each rated at 15 MW, to achieve nameplate generation of 810 MW. The project was expected to be completed in 2026, following which construction on the Empire 2 offshore windfarm would begin. This addition would be even larger than the original windfarm, using approximately 80 15-MW turbines to add another 1,200 MW of nameplate generation capacity. This portion of the project was expected to begin operations in 2029. Subscribers can learn more by viewing the project reports on Empire 1 and Empire 2.
Another Equinor-BP project that could be affected by the New York decision is the Beacon Wind project, planned for waters about 20 miles south of Nantucket, Massachusetts, but that will supply locations throughout the U.S. Northeast. The first phase of the Beacon project calls for the construction of 123 turbines, each rated at 10 MW, to provide more than 1,200 MW of power. The project was expected to go into operation in 2027. The 128,000-acre site leaves room for expansion, and the two companies are in the early planning stage of adding 117 10-MW turbines to the windfarm to provide another 1,170 of generation. Subscribers can learn more by viewing the project reports on the original windfarm and planned addition.
In addition to the companies involved in offshore projects, an "inflation adjustment" was sought by the Alliance for Clean Energy New York on behalf of other renewable energy companies, including NextEra Energy Incorporated (NYSE:NEE) (Juno Beach, Florida) and EDF Renewables North America (Houston, Texas), which together account for more than $5 billion worth of active renewable energy projects in New York. Among the companies' planned onshore projects in the state is NextEra's 300-MW Declaration solar farm near Romulus (see project report) and EDF's planned 350-MW Columbia solar farm near Ilion (see project report), among many others.
New York's decision puts at stake not only national offshore wind goals, but also the state's own renewable energy goals. The Biden administration has set the lofty goal of having 30 gigawatts (GW) of offshore wind power in place in the U.S. by 2030, and the affected offshore projects could potentially account for more than 15% of this. New York itself has some of the loftiest renewable energy goals of any U.S. state, aiming to have 70% of its electric load served by renewables by 2030 and 9,000 MW of offshore wind by 2035.
Following the PSC's decision, the administration of New York Governor Kathy Hochul (D) said it would launch an accelerated procurement process for both onshore and offshore renewable energy projects "to backfill any contracted projects which are terminated."
Subscribers to Industrial Info's GMI Power Database can click here to view reports for all of the projects discussed in this article and click here to view the related plant profiles.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).
