On July 27, New York Governor Kathy Hochul announced the release of the state’s third competitive offshore wind solicitation (RFP), seeking to procure a minimum of 2,000 megawatts (MW) of new offshore wind generation capacity, as well as significant capital investment in New York’s bourgeoning offshore wind energy supply chain. New York’s Climate Leadership and Community Protection Act of 2019 established the goal of developing 9,000 MW of offshore wind capacity, the largest statutory goal to-date of any state in the country, by 2035. Combined with the 4,300 MW of offshore wind generation capacity procured through its prior two solicitations, the RFP will put the state more than two-thirds of the way towards reaching that target.
As with the prior two solicitations, the New York State Energy Research and Development Authority (NYSERDA) will administer the RFP, and will be the counterparty to agreements entered into with the developers of selected proposals. NYSERDA will enter into agreements to purchase offshore wind renewable energy certificates (ORECs) generated by the selected projects, based on either a fixed or index price proposed by the developer. Each developer must include a proposal with at least a 25-year term for the contract to sell ORECs to NYSERDA. Developers will retain the right to sell the electric energy, capacity, and ancillary services associated with the ORECs.
The RFP is limited to developers that have obtained a wind energy lease (executed or provisional) from the U.S. Bureau of Ocean Energy Management, and each proposal must demonstrate delivery of electricity into New York. Each offshore wind generation facility included in a proposal (which may not include more than three facilities) must have a minimum nameplate capacity of either (a) 1,000 MW or (b) the maximum capacity available from the facility’s lease area, which must be located in U.S. ocean waters, if such capacity is less than 1,000 MW. A proposal may include capacity that is an upgrade to an existing facility if the upgrade does not require a separate export cable from the existing facility.
Due to the reduced footprint in transmitting energy from offshore wind projects to shore, high voltage direct current (HVDC) technology will be required for all projects where cables will be installed in areas of grid constraint. If HVDC is used, projects must be “meshed ready,” or designed with the capability to interconnect to offshore power substations that bring electricity from multiple offshore wind generation facilities onshore. This requirement is intended to strengthen the reliability of the power delivered by the generators, and to also provide flexibility for future offshore wind projects.
Each developer submitting a proposal must also include a Supply Chain Investment Plan (SCIP). The proposed financing of the SCIP may include up to $300 million in New York state funding if local manufacturing of nacelles or blades is included, or up to $150 million in such funding if not included. Proposals must include at least $2.00 of non-state funding for development and construction costs for every $1.00 of state funding for such costs. Proposers are also encouraged to seek NY Green Bank financing (which would qualify as non-state funding) in connection with their SCIP. NYSERDA’s proposal guidance states that the NY Green Bank is generally able to make competitively-priced, market-based debt financing ranging from $25 million to $100 million per project for offshore wind supply chain projects in New York.
NYSERDA’s evaluation of proposals will be based upon an ultimate weighting of 70% price considerations, 20% economic benefits to New Yorkers, and 10% project viability. NYSERDA will host a conference for proposers via webinar on August 23, 2022 at 10:00 a.m. EST to address key elements from the RFP, including eligibility criteria, submission requirements, the proposal evaluation process, contract commitments, and the post-award process and agreement. Interested parties may register here. Proposers must submit a notice of intent to propose to NYSERDA by December 1, and the final proposal by December 21.