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Bids submitted in Massachusetts as Cuomo outlines plan for 800 MW in New York

Thu 11 Jan 2018

Bids submitted in Massachusetts as Cuomo outlines plan for 800 MW in New York
Governor Cuomo: “New York State plans to procure at least 800 MW of offshore wind power”

New York state governor Andrew Cuomo used his 8th State of the State Address to outline plans for two solicitations for offshore wind energy in 2018 and 2019 as developers submitted bids for 800 MW offshore windfarms in the state of Massachusetts


Unveiling a far-reaching agenda to build on what he described as seven years of progressive policy, the governor of the state of New York said he wanted to position New York as the leading offshore wind market in the US, drive competition, reduce costs and create jobs in what he called “this emerging industry”.

Governor Cuomo called for the state to procure at least 800 MW of offshore wind power via two solicitations, to be issued in 2018 and 2019, resulting in enough clean, renewable energy to power 400,000 New York households.

The governor is directing the New York State Energy Research & Development Authority (NYSERDA) to invest US$15M in clean energy workforce development and infrastructure advancement to train workers for jobs in this industry, including offshore wind construction, installation, operation, maintenance, design and associated infrastructure.

To attract private investment in port infrastructure and supply chain activities, governor Cuomo is also directing NYSERDA to work with Empire State Development and other state agencies to determine the most promising public and private offshore wind port infrastructure investments.

Shortly before governor Cuomo made his statement, developers submitted bids for projects for up to 800 MW of offshore wind energy in the state of Massachusetts. The bidders are understood to include: a partnership between Ørsted in Denmark and Eversource; Deepwater Wind, developer of the first US offshore windfarm, Block Island; Revolution Wind, with National Grid and FirstLight Power; and  Vineyard Wind, a joint venture between Avangrid Renewables and Copenhagen Infrastructure Partners.

Recent weeks have seen a lot of attention paid to the potential of offshore wind energy off the northeast coast of the US, but there is also potential aplenty on the country’s east coast.

A report from the Green Economy Programme at the Center for Labor Research and Education at the University of California, Berkeley, suggests that floating offshore wind energy could play a leading role as a source of green energy and employment.

Robert Collier, a research and policy specialist in the Labor Center’s Green Economy Program, suggests that, as California accelerates its transition to a low-carbon future, one of its challenges is to choose ‘high-road’ policies that not only cut emissions but spur broad-based growth, create quality jobs and benefit communities and notes that state and federal governments have recently launched a planning process for one emerging clean energy source with significant high-road potential: offshore wind.

Mr Collier’s report analyses the policy actions needed for offshore wind power to become an important component of California’s energy mix and an economic catalyst. He acknowledges that these steps would entail an unusual degree of long-term co-ordination and commitment by government and industry. Yet such an effort appears to merit serious consideration because of the sector’s potential to create high-wage employment and help balance the state’s power grid at electricity rates competitive with those of similar sources.

California state agencies already provide direct and indirect subsidies to other technologies such as battery storage and advanced biofuels. By placing strategic bets on competing clean energy alternatives, these subsidies stimulate what Mr Collier called a “multi-sided development race” that will strengthen the state’s climate policy options in the years to come.

“Offshore wind carries the same inherent risk as the other technologies in this race – the lack of certainty that they will cut their currently high costs enough to become fully competitive,” he writes, “but offshore wind also has a unique vulnerability that doubles as economic potential – its physical scale and logistical complexity.”

Deep water off the coast of California would probably preclude the use of fixed-bottom foundations and require the use of floating platforms of the type that are being developed in Europe and elsewhere.

As Mr Collier notes, any offshore windfarm requires an extensive supply chain. Ensuring this supply chain takes root in California rather than Asia or Europe would require major upgrades to California’s infrastructure for ports, transportation and transmission. The payoff would be creation of a new economic sector that – to a greater or lesser extent, depending on policy decisions – could provide significant job creation.

A necessary factor in developing this supply chain is investor confidence, and as Mr Collier noted, in-state production of the full range of windfarm components is possible if state and federal planners send clear signals to wind developers that, if they build this manufacturing capacity in California, their investments will find steady markets through a long-term series of offshore projects. Without such signals, it is likely that much of the supply chain would be outsourced, with fewer economic benefits for Californians.

“Californian offshore wind is a case study of the challenges and opportunities inherent in a 21st century industrial policy for the clean energy transition,” he said.

“An entirely new industry is being envisioned, potentially involving major infrastructure requirements and long-term power resource planning. Success will depend on policy decisions and market signals that are only just now beginning to be evaluated by government and non-government stakeholders.”

A central finding of his report is that California’s offshore wind planning efforts will soon need to broaden their scope. Since early 2016, the state and federal governments have commissioned research, conducted stakeholder outreach and mapped out the labyrinth of state, federal and local permitting. This is important groundwork, much of which involves potential environmental concerns that are outside the purview of this report. But because there are so few US precedents for high-road economic planning, additional attention will be needed to identify and design the appropriate policy tools.

The report’s findings include that offshore wind would bridge the daily late-afternoon gap between fast-vanishing solar output and rising residential electricity consumption, thus reducing the state’s need to import wind power from Wyoming or other out-of-state sources. In doing so, it could allow California to develop additional solar power without destabilising the grid. As an in-state energy source rather than an out-of-state import, offshore wind would be under the purview of the state’s own regulators as well as federal agencies, thus allowing California policy makers to ensure compliance with state policies and interests.

Until only a year or two ago, offshore wind seemed far too expensive to ever be able to compete with California’s other sources of renewable power, but recent technological innovations have sent offshore wind costs plummeting, suggesting that, by the mid-2020s, floating windfarms will be close enough to price parity with land-based renewables.

An April 2016 analysis by the National Renewable Energy Laboratory of development scenarios for California offshore wind concluded that an economically feasible build-out of 16 GW would create steadily increasing employment totalling an annual average of 13,620 full-time jobs in construction, installation and manufacturing by 2040–2050 and 4,330 full-time long-term jobs in operations and maintenance, plus thousands more service-sector jobs in the broader economy.

California’s first offshore wind projects are likely to be executed with imported turbines and other parts, but if state policy makers send clear signals that a multi-year sequence of many contracts is in the offing, private manufacturers and investors are more likely to build factories and other facilities in California for turbines, blades, towers and foundations. This, in turn, could lower costs and make the electricity produced more competitive with other power sources.

A full supply chain also presupposes the availability of suitable port facilities for manufacturing and assembly, and two alternatives appear potentially viable: either a multi-site approach, with different functions carried out at a variety of ports, or a single multi-use hub at Eureka, where the Port of Humboldt Bay has vast expanses of vacant industrial land at a deepwater harbour (although it also has major challenges for highway, rail transport and grid interconnection).

Mr Collier suggests that California’s initial offshore windfarms are likely to be either in waters near the Diablo Canyon nuclear plant, whose reactors are slated to close in 2024 and 2025, or offshore Humboldt and Del Norte Counties, near a long-closed nuclear plant that is currently undergoing its decommissioning process. In either case, the result could be retraining and re-employment for some of the nuclear plant workers.

For offshore wind energy to achieve a leading role as a provider of clean energy and jobs, he suggests, co-ordinated industrial planning that has been rare in US states in recent decades would be required, but if California is to transition to renewable energy, policy makers and stakeholders should give serious consideration to it.

Perry pumps millions into offshore wind research

Late 2017 also saw US secretary of energy Rick Perry announced US$18.5M in new Department of Energy (DOE) funding for research and development that will focus on a US-specific cost reduction in offshore wind energy.

The consortium will be a co-operative private-public ‘innovation hub’ addressing topics including wind technology advancement, resource and physical site characterisation, installation, operations and maintenance, and supply chain technology solutions.

“As the former governor of one of the largest wind-producing states, I know the value of wind power in our energy portfolio,” said secretary Perry. “This work will further DOE’s goal to accelerate the development of offshore wind technologies by supporting fundamental research to reduce the costs of offshore wind energy to successfully compete in regional energy markets.”

The DOE said the US hopes to capitalise on momentum in the nascent offshore wind market in the US, with the nation’s first commercial offshore wind project, the Block Island Wind Farm, and additional projects proposed along America’s coastlines.

However, said the DOE, the US has several specific challenges that require industry-wide collaboration to reduce costs. These include deep water requiring floating foundations, the need for models predicting how Atlantic hurricanes will impact offshore turbines, and supply chain and operations and maintenance solutions to address the challenges of building and maintaining turbines at sea.

The DOE intends to select an administrator to co-ordinate the collaborative R&D activities conducted by the consortium, which will include members of the offshore wind industry, who will contribute funds and use the research findings to further advance technology.

In addition to the US$18.5M funding opportunity, US$2M will also be allocated to research at DOE’s national laboratories to support consortium R&D activities.

It’s not just states on the northeast coast of the US that stand to benefit from offshore wind – California could too.

Former Brayton Point power station could be repurposed for offshore wind

Commercial Development Company (CDC), a North American commercial real estate and brownfield redevelopment company, has announced plans to acquire the site of the Brayton Point power station and use it for offshore wind energy.

CDC said it plans to acquire the site from Dynegy Inc. As part of the transaction, CDC will assume responsibility for legacy environmental liabilities associated with it. CDC and Dynegy are currently under contract to transfer ownership of the site, following a final due diligence period with closing anticipated by mid-December.

CDC plans to invest in the 125-hectare site and develop a market-ready plan to transform it for post-coal utilisation.

The company said the site “represents a unique opportunity to advance the offshore wind energy sector” due to its pre-existing access to the regional transmission grid. The site is also close to proposed development areas for offshore wind, has potential as a deepwater port and access to a highly skilled workforce in the New England area.

The Massachusetts Clean Energy Center recently identified Brayton Point as a potential site for the development of an industrial wind port to support the wind energy diversification legislation. The development of offshore wind will require sites capable of component manufacturing, staging, operations and maintenance.

“Multiple factors attracted us to this site. Of greatest interest was the potential for renewable energy development. Today the site is non-operational. We are confident that, once it is repositioned, the unique attributes will attract investors from multiple sectors,” said CDC.


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