New York issues 800 MW offshore wind solicitation as tax credits wind down

Source: By Iulia Gheorghiu, Utility Dive • Posted: Tuesday, November 13, 2018

  • New York Gov. Andrew Cuomo issued a solicitation on Thursday for 800 MW or more of offshore wind projects in the state.
  • The New York State Energy Research and Development Authority (NYSERDA) will require each proposer to submit an approximately 400 MW project, along with the option to submit other proposals between 200 MW and 800 MW. The awards for 25-year contracts are expected in the spring.
  • The solicitation has been anticipated all year, following the announcement of Cuomo’s goal to develop 2,400 MW, as part of a 50% renewable energy mandate by 2030. The bids are due in February.

The state’s offshore wind plan was expected to lead with solicitations of at least 800 MW in 2018 and 2019, allowing developers to take advantage of fading tax credits.

The Production Tax Credit and Investment Tax Credit will expire for new projects after 2019, meaning offshore wind developers need to move quickly to attract investors.

​”The requirement of a 400 MW bid for all Proposers is to provide NYSERDA with the opportunity to compare bids across a common set of project capacities,” NYSERDA spokesperson Kate Muller told Utility Dive via email.

States across the Northeast have announced large-scale offshore wind solicitations to help spur the renewable resource. In September, New Jersey opened the biggest offshore wind solicitation at 1,100 MW, aiming to act on applications by July 2019. That would allow developers to cover 12% of the total project price tag with tax credits, according to Board of Public Utilities.

The only offshore wind farm currently in operation in the U.S. is the 30 MW Block Island facility off the coast of Rhode Island.

While more large-scale solicitations are popping up, U.S. prices for offshore wind developments continue to be higher than European levels, where the increasing deployments helped establish economies of scale and a supply chain.

It could take as few as a couple of 100 MW projects to help establish that in the United States, Marlene Motyka, a U.S. and Global Renewable Energy principal at Deloitte Transactions and Business Analytics, told Utility Dive in September.

The New York Power Authority (NYPA) announced the launch of a study in August in collaboration with the New York ISO, NYSERDA and utilities in the area to examine offshore wind models currently used in Europe to inform the state’s development plans.