In a move that further bolsters the state of New York’s status as a trailblazer in America’s energy transformation, on July 21, New York Governor Andrew Cuomo announced the largest combined renewable energy solicitations in U.S. history. New York is seeking up to 4,000 megawatts (MW) of offshore wind and onshore renewable energy capacity to help meet the resource goals established under its 2016 Clean Energy Standard and its 2019 Climate Leadership and Community Protection Act (CLCPA). The solicitations also contemplate a combined $400 million in public and private funding to upgrade the state’s port infrastructure in order to accommodate the development of the new offshore wind facilities. New York’s solicitations not only present an unprecedented market opportunity for offshore wind and other renewable developers, but also for businesses seeking to provide key construction and operations and maintenance products and services to the offshore wind industry.
A. Offshore Wind RFP
Gov. Cuomo’s announcement formally opened New York’s second offshore wind solicitation, ORECRFP20-1 (OREC RFP), which is administered by the New York State Energy Research and Development Authority (NYSERDA) and seeks projects totaling up to 2,500 MW of capacity. Projects selected in the OREC-RFP will earn indexed-based performance payments for their Offshore Wind Renewable Energy Certificates (OREC) representing the environmental attributes associated with one megawatt-hour (MWh) of electricity generated from offshore wind resources and consumed by retail customers in New York State. In October 2019, NYSERDA finalized New York’s first two OREC contracts with Equinor US Holdings, Inc., for the 800-MW Empire Wind Project, and with Sunrise Wind LLC, a joint venture of Ørsted A/S and Eversource Energy, for the 880-MW Sunrise Wind Project. NYSERDA expects the average OREC price under those contracts to be $25.14 per MWh, approximately one-third of the all-in development costs for the respective projects.
As part of their proposals, OCREC-RFP requires offshore wind developers to submit a Port Infrastructure Investment Plan (PIIP) that includes at least one of the 11 prequalified New York ports to stage, construct, and manufacture key components, or coordinate operations and maintenance activities associated with the project. Developers’ proposals must include a description of the proposed long-term use of the port facilities, including how it will compete with other facilities both regionally and globally. The state will provide up to $100 million in either reimbursable grant funding and up to $100 million in secured financing to assist developers of chosen projects with implementation of their respective PIIPs. The deadline for developers to submit notices of intent to submit a proposal for the OREC-RFP is September 23, 2020, and the proposal deadline is October 20, 2020. If fully awarded, New York will have obtained contractual commitments for approximately half of the 9,000 MW of offshore wind capacity it is required to obtain by 2035 under the Clean Energy Standard.
B. Land-Based Renewables RFPs
Gov. Cuomo also announced the opening of two solicitations for land-based renewable energy projects by NYSERDA and the New York Power Authority (NYPA), respectively. NYERDA’s solicitation, RECRFP20-1 (REC-RFP) seeks onshore, technologically-established renewable projects (such as solar photovoltaic facilities), which may be paired with energy storage, capable of producing a combined 1.6 million MWh or more. Selected projects will receive index-based or fixed-priced payments for their Renewable Energy Certificates (REC), similar to the payments to be made to project developers under the OREC-RFP. The deadline for submitting an eligibility application under REC-RFP is August 27, 2020, and the deadline for proposals is October 21, 2020.
NYPA’s solicitation seeks utility-scale renewable projects that will produce an annual output of up to 2 million MWh or more. Developers of selected projects will enter into contracts to sell RECs, energy and/or capacity to NYPA or a designated entity, and are required to have a nameplate generation capacity that is 20-25 MW or 100 MW or greater. Submissions in response to NYPA’s solicitation are due September 14, 2020.
Combined, the REC-RFP and the NYPA solicitation seek to procure sufficient renewable energy capacity to power nearly 500,000 homes. Together with the OREC-RFP, these solicitations are a significant endeavor by the state of New York to further progress towards the goal established by the CLCPA of meeting 70% of its electricity needs from renewable resources by 2030.