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Politics : Rat's Nest - Chronicles of Collapse

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From: Eric7/19/2019 11:51:01 AM
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Wind

New York Awards 1.7GW of Offshore Wind as Cuomo Signs State’s Green New Deal

Offshore wind developers Ørsted and Equinor will build huge projects to supply power for Long Island and New York City, in what the state calls the largest U.S. renewables procurement in history.

Karl-Erik Stromsta

July 18, 2019



Former Vice President Al Gore joined Cuomo for the signing in New York City.

New York Governor Andrew Cuomo on Thursday announced 1.7 gigawatts of offshore wind deals with two development groups, as he signed into law the state’s ambitious Green New Deal.

Not only is it the largest offshore wind procurement to date in the U.S., topping New Jersey's recent 1.1-gigawatt solicitation, but state officials said it was the single largest renewables procurement in the country's history.

The 880-megawatt Sunrise Wind project will be built by Denmark’s Ørsted and its utility partner Eversource Energy, feeding power onto densely populated Long Island.

"Long Island needs that power, and it needs it today," Cuomo said in front of a packed audience in Manhattan.

Meanwhile, Norway’s Equinor will build the 816-megawatt Empire Wind project, delivering electricity into New York City.

The developers can now begin negotiating long-term contracts with New York for offshore wind renewable energy certificates. Both projects are due for completion in 2024.

Two other development groups were not chosen in the solicitation: Vineyard Wind, a joint venture of Avangrid and Copenhagen Infrastructure Partners; and Atlantic Shores, a joint venture of EDF Renewables and Shell New Energies.

Flanked by former U.S. Vice President Al Gore, Cuomo also signed into law the Climate Leadership and Community Protection Act, commonly referred to as New York’s Green New Deal.

"The most aggressive climate law in the United States of America," as Cuomo called it, requires 70 percent renewables by 2030, a complete decarbonization of the state’s electricity system by 2040, and the near-elimination of carbon from New York's entire economy by 2050.

New York's Green New Deal passed through New York's Democrat-controlled legislature last month, and Cuomo had been expected to sign it.

Cuomo said his actions Thursday will likely prove “the most consequential of my administration.”

The Ørsted show rolls on

Anthony Logan, senior analyst at Wood Mackenzie Power & Renewables, noted that Ørsted now has a remarkable 3 gigawatts of awarded projects in U.S. waters, from Massachusetts down to a demonstration project with Dominion Energy off Virginia, giving it a big influence over the emerging supply chain.

Separately on Thursday, Siemens Gamesa Renewable Energy announced a 1.7-gigawatt offshore wind turbine order from Ørsted, covering Sunrise Wind as well two other contracted projects in Ørsted's portfolio.

It’s by far the largest offshore wind turbine order in the U.S. market, which has just 30 megawatts of installed capacity to date. MHI Vestas is supplying turbines for Vineyard Wind's 800-megawatt project for Massachusetts.

"Ørsted is now the undisputable center of the US offshore wind market," Logan said. "Given the currently expected solicitation schedules of other states, no other developer could likely amass a similar portfolio until at least 2022."

Equinor's win brings a new developer with a committed project to the table in the fast-evolving U.S. offshore market. Equinor's floating offshore wind experience in Europe could prove vital to the U.S. as the market moves toward California's deeper waters in the mid-2020s, Logan said.

While pricing details were not immediately available for the winning projects, Max Cohen, associate director for North American power at IHS Markit, said Vineyard Wind's Massachusetts project will likely continue to have the lowest starting price of any of the contracted U.S. projects.

"With an online date of 2024, these New York projects won’t be able to benefit from the investment tax credit, or production tax credit as the case may be, in the same way that Vineyard Wind can, which makes it hard to match Vineyard Wind on price," Cohen said.

"That said, I’m sure the four bidders were competing to gain market share in New York and build a portfolio of projects that will make future projects even more cost-effective," he added.

"So if there is a surprise on price, it will probably be because bidders were willing to take a narrow return on a first New York project to build momentum for future development."

The supply chain starts to move

New York has big ambitions for solar energy, storage, and — in upstate regions — onshore wind, all addressed in its Green New Deal. But by linking Thursday's project awards to the signing of the bill, Cuomo made clear that offshore wind will lie near the heart of the state's power decarbonization plans.

New York has a 9-gigawatt offshore wind target for 2035, and most of that power will flow to Long Island and New York City, two massive load centers with limited options for large-scale renewables generation.

Thursday's announcement will further intensify the competition between East Coast states for jobs and supply chain investment in offshore wind, expected to be one of the fastest growing renewables markets in the U.S. and globally in the coming decade.

Cuomo confirmed New York will spend nearly $300 million building and upgrading port facilities across a variety of sites, including Long Island, Brooklyn, Staten Island and the region south of Albany along the Hudson River. The port upgrades will begin next year.

Equinor said it will take advantage of infrastructure and supply-chain opportunities at the Port of Coeymans, along the Hudson River in New York's Capital Region, as well as in South Brooklyn.

"Supply chain localization announcements continue to focus on foundation fabrication, which is the most obvious choice for domestic siting despite recent talk of blade and even possible nacelle fabrication in the US," WoodMac's Logan said.

Ørsted, which recently won the entirety of New Jersey's first offshore wind procurement, has committed to helping German foundation manufacturer EEW establish a production facility in that state.

"When the details of the developer's bids become public, we will learn much more about the commitments Ørsted and Equinor have made to New York," said Stephanie McClellan, a director at the Renewables Consulting Group and the author of a recent report on the U.S. offshore wind supply chain.

"But New York state's market size, large projects out of the gate, and investing in workers and facilities all point to [it] becoming the real epicenter of East Coast offshore wind," McClellan told GTM.

greentechmedia.com
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