In a breakthrough year of “firsts” for offshore wind in the United States, New York State is poised to add another to the list. The State’s clean energy agency, NYSERDA, plans to play a pioneering role in the early development of our region’s first federal offshore wind energy area, an 80,000-acre parcel located twelve miles south of Long Beach and the Rockaways, off Long Island.
NYSERDA will participate in the federal government’s offshore wind leasing rights auction next week, on December 15th. Thirteen offshore wind developers have also qualified as bidders, although it is not clear how many will actually participate in the auction. And as part of that process, New York will become the first state to bid in a federal offshore wind auction, with the aim of winning the leasing rights. Here’s why that’s a smart move for clean energy, economic development, and the environment.
If it wins the auction, NYSERDA will take the early steps needed to prepare the site for development, and then, through a competitive process, will select a private offshore wind developer to build the project. NYSERDA’s innovative strategy, if successful, would reduce the costs of offshore wind development off New York’s coast, provide certainty to developers, and allow NYSERDA to take the lead in ensuring that development is consistent with protecting marine ecosystems and wildlife.
So let’s hope New York State is in it to win it!
Offshore Wind Has Many Benefits for the Empire State
Responsibly developing the vast offshore wind resources off New York’s coast is crucial to meeting New York’s ambitious clean energy goal of generating 50 percent of the state's electricity from renewables by 2030.
And, as NYSERDA CEO John B. Rhodes noted earlier this year, offshore wind will also “bring clean energy and economic development to New York’s coastal communities, growing the state’s economy and supporting Governor Cuomo’s commitment to protecting the environment.” He couldn’t be more right: Researchers at SUNY Stonybrook report that building a single, 250-megawatt offshore wind power project off the Long Island coast could create more than 2,800 jobs and generate $645 million in local economic output, while a companion study finds that an offshore Long Island wind project could be built with “essentially no impact” on consumers’ electric rates. Nationwide, scaling up offshore wind power could create as many at 160,000 jobs.
Why New York’s Innovative Approach Makes Sense
NYSERDA’s smart strategy is aimed at keeping costs down for consumers by shepherding and streamlining the development process. If it wins the auction, NYSERDA will not only select a project developer through a competitive bidding process, but also guarantee the project developer has a market for its electricity, through a financeable offtake mechanism, which could take the form of a power purchase agreement.
Siting and developing an offshore wind power project can be complex because often—and this will be the case in the New York wind energy area—state and federal agencies are both are involved in the process. The federal government regulates activities in marine waters more than three miles from the coast, but demand for clean energy is largely dictated by state policy. If the federal government awards an offshore wind lease to a developer, there is no guarantee at the state level that there will be a guaranteed market for its electricity. And if a single developer wins a federal lease for an entire wind energy area, there might be no competition for a state-administered power purchase agreement, potentially leading to higher costs.
NYSERDA’s approach makes a lot of sense because it avoids both of these dilemmas. As NYSERDA explains, its “strategy minimizes project risks and provides developers certainty to secure financing, maximizing competition and ultimately lowering project costs for consumers.” Bundling a lease with a revenue stream is a successful strategy that has reduced the costs of offshore wind in Europe. Indeed, the cost of offshore wind there is plummeting.
New York’s Strategy Will Help Protect Marine Ecosystems and Minimize Conflict
New York is committed to being a good environmental steward as it moves forward with offshore wind power. The State just completed the first portions of the world’s largest aerial survey of offshore wildlife off Long Island, which will help provide a baseline for examining the potential environmental impacts of developing offshore wind power there.
New York is also committed to extensive stakeholder outreach, including to Long Island coastal communities and fishermen. This is important because some fishing interests have just filed a lawsuit related to the offshore wind area. But there is no need for such a struggle now. Once an actual project is proposed and designed, which will be some years from now, any stakeholder concerns and issues can and will be addressed during the related environmental review process. NYSERDA’s participation in the process will ensure that New York State can help balance and address stakeholder interests. Rhodes has explained that if NYSERDA wins the lease, the state “will ensure that offshore wind in New York is developed responsibly in a way that balances the needs of all constituents, including coastal communities and the fishing and maritime industries.”
It’s Up to You, New York, New York!
If New York’s strategy succeeds, we could see offshore wind power scale up more quickly, at lower cost, and with reduced stakeholder conflict. By pioneering a smart, cost-effective approach to launching and scaling up offshore wind power, New York State can help jumpstart a new U.S. clean energy industry and build our state’s economy.
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