Offshore wind heavyweights target latest New York tender
Offshore wind heavyweights target latest New York tender | Windpower Monthly
New York’s fourth offshore wind tender has closed, with bidders including RWE and National Grid Ventures, and Equinor and Ørsted resubmitting projects.
RWE and National Grids bid for a contract for their planned 1.3GW Community Offshore Wind project in the tender – which was launched to recover capacity left in limbo. New York had rejected prior bids involving Equinor’s Empire Wind 1 and Ørsted’s Sunrise projects when the developers asked for higher contract prices.
Equinor confirmed it had resubmitted the planned 816MW Empire Wind 1 project alongside announcing it had parted ways with BP and divided their shared US offshore wind portfolio.
The Empire Wind 1 bid has a competitive price level that will restore profitability, though at the lower end of the company’s guided real base project return rate for renewables of 4-8%, Pal Eitrheim, Equinor’s head of renewables, told Reuters.
Ørsted also recently confirmed it will take full control of the resubmitted Sunrise project if it wins in the solicitation, by buying out 50:50 joint venture partner Eversouce.
The New York State Energy Research and Development Authority (Nyserda) expects to notify winners in February and execute contracts in the second quarter. Contracts will include inflation protection.
Related Knowledge Center: Offshore wind energy
Over the next decade, U.S. offshore wind power is expected to grow from a single 30-megawatt wind farm off Rhode Island to more than 2,000 MW of capacity along the Atlantic Seaboard. There are contracts for wind power off the coasts of Massachusetts, Connecticut, New York, Maryland, New Jersey, Rhode Island, and Virginia.
The National Renewable Energy Laboratory has estimated the United States has over 4,000 gigawatts (GW) of offshore wind potential, enough to power the country four times over.
The growth in part being spurred by state solicitations, including in New York, where then-Gov. Andrew Cuomo (D) set a commitment of 9,000 MW of offshore wind by 2035, and in Connecticut, where in June 2021, Gov. Ned Lamont (D) signed legislation authorizing the construction of 2,000 MW of offshore wind by 2030.
The offshore development is also being driven by an investment tax credit set to end in December 2019 and is equal to 12 percent of expenditures. U.S. Sens. Susan Collins (R-Maine) and Tom Carper (D-Del.) have introduced a bill to extend the tax credit for up to eight years.
The Interior Department has held eight competitive lease sales that resulted in 15 offshore wind leases over 1.7 million acres that has the potential for 21 GW of capacity. In February 2022, the Bureau of Ocean Energy Management completed a bidding process that realized $4.37 billion for 488,000 acres across six lease areas in federal waters off New York and New Jersey.
Projects have also been proposed off the Southeast coast, off California and Hawaii, and for the Great Lakes.