New York holds off on plans to solicit offshore wind energy bids

On April 23, 2020, the New York State Public Service Commission issued a 2020 Offshore Wind Order, authorising the New York State Energy Research and Development Authority (NYSERDA) to procure at least 1,000 MW of offshore wind capacity, which was also part of the announcement included in Governor Cuomo’s 2020 State address. While NYSERDA fully supports and is poised to execute on this authorisation, the authority stated in a letter to stakeholders that issuing a near term solicitation would not be responsible nor advisable given the current circumstances. Thus, NYSERDA is considering options to issue the State’s second offshore wind solicitation, in coordination with a $200 million solicitation to upgrade New York’s ports, at a date that is sensitive to the significant and difficult challenges currently facing private industries and New Yorkers. Given the dynamic nature of the situation caused by COVID-19, NYSERDA is monitoring the prevailing circumstances closely and stands ready to launch the solicitation when the associated activities can responsibly begin.

New York has an ambitious renewable target, with its Climate Leadership and Community Protection Act requiring that 70 per cent of New York’s electricity should come from renewable sources by 2030 and 9,000 MW of offshore wind energy capacity by 2035. This is the highest target for offshore wind compared to other states and is crucial for New York’s climate change and carbon-neutral economy strategy. In October 2018, NYSERDA issued its first solicitation for offshore wind to stimulate the development of the domestic offshore wind industry and contracted more than 1.6 GW offshore wind for two projects.

According to GWEC Market Intelligence, the delay of the second offshore wind solicitation in New York caused by the COVID-19 disruption is unlikely to impact offshore wind installations in the US for 2020. As the first offshore wind project in New York will not be online until 2022 following the construction and operation plan (COP), and only the 12 MW Dominion Virginia demo project developed by Ørsted and Dominion Energy is scheduled to be built in 2020. In fact, the construction schedule for this small pilot project located in Virginia remains the same despite challenges brought by the COVID-19 crisis to the US wind industry. The two units of SGRE 6.0MW DD turbine and foundations for this project have arrived in the Port of Halifax in Nova Scotia, Canada this week.

However, last week the world’s largest offshore wind operator Ørsted postponed the commission date of its 120 MW Skipjack offshore wind project located in Maryland from 2022 to 2023 due to the delays in federal permitting procedure. In addition, combining with the effects of COVID-19 pandemic on the US offshore wind power sector, Ørsted expects that their 130 MW South Fork project is very likely to be delayed to beyond 2022, as well as increased risk of delays on three more large offshore wind farm projects; Ocean Wind (704 MW), Revolution Wind (1,100 MW) and Sunrise Wind farm (880 MW). In response to this announcement, GWEC Market Intelligence downgraded its US offshore wind turbines installation forecast for 2022 from 283MW to 163MW, but decided to keep the forecast for the remaining years unchanged until the final decision is made.