In 2016, New York approved clean energy standard, mandating 50% of its electricity from renewables by 2030. It was deemed as the most ambitious clean energy mandate in the state’s history to fight pollution and climate change. Taking a step closer towards its 2030 goal, the New York State Energy Research and Development Authority (NYSERDA) has announced a new solicitation for 1.5 million megawatt hours of renewable electricity, to be delivered by 2022. This specific solicitation expects to contract with 20 projects to supply this volume of electricity.
By the end of 2018, NYSERDA will be receiving bids for the first 800 MW of offshore wind power. The winners will be announced in the second quarter of 2019. The process will be carried out in collaboration with New York Power Authority and Long Island Power Authority.
Offshore wind power has massive potential in North-Eastern states of America
In 2017, the U.S. states of New York, Massachusetts and Rhode Island released reports that described the great potential Northeastern states hold for offshore wind power. The report indicated offshore wind deployment of between 4,000 to 8,000 megawatts by 2030 and creation of up to 36,000 jobs.
What efforts will be made by NYSERDA to complement the growth of the wind power sector?
According to the US Department of Energy, owing to improved costs and performance of wind power technologies, wind energy sector has shown a rapid growth in New York and other states. To complement the growth of this industry, NYSERDA plans to make the following efforts:
- It plans to invest $15 million for workforce training in this sector and upgrading local infrastructure for the offshore wind industry.
- Lead the National Offshore Wind Research and Development Consortium, created with a public-private partnership.
- Administer $18.5 million grant given by the US Department of Energy.
What are the expected returns?
Bloomberg New Energy Finance has predicted that the U.S. will have a total installed offshore wind capacity of between 3-4 GW by 2030. Building and maintaining this capacity would have the following benefits:
- According to US Job Creation in Offshore Wind, building and maintaining offshore wind of this capacity would lead to the creation of at least 16,000 jobs.
- The obvious benefit will be the generation of low-cost electricity with zero greenhouse gas emissions. Offshore wind power will be enough to generate electricity for 1.2 million New York households.
- This would also prompt investment in US factories and vessels needed to comply with the Jones Act that prohibits foreign ships from transporting cargo to or from US ports.
Benefits for both developers and utility companies
The offshore wind power project will have double benefits for both developers and utility companies.
- The wind power developers will be collecting Offshore Wind Renewable Energy Certificates (OREC). ORECs would bring extra income for the developers beyond electricity sales.
- The utility companies would be purchasing ORECs. It would be beneficial for them as instead of developing the entire renewable power generation capacity by themselves, they would be only paying for ORECs.
The price of ORECs will be negotiated on a 20-25 year term with the contract winners.
There will be both fixed-price scheme and variable indexed scheme. Fixed price on OREC sales would generate stable income for project developers. The variable price, on the other hand, would lead to extra income for developers, if the index increases.
Once this goal is put into action, New York will become one of the leading states in the US, in terms of renewable energy production. It would not just contribute to lower electricity prices but would also create clean energy at a scale that would reduce pollution and emissions, meeting the region’s goals for addressing climate change issues from the energy sector.