The eagerly-awaited next round of offshore wind lease area sales in the New York Bight region may not take place until 2022, despite pressure for faster action from project developers and the state, federal regulators told Recharge.
President Joe Biden’s administration “strongly supports growing the offshore wind industry as a key component of tackling the climate crisis. This includes reaching a decision on what areas in the New York Bight may be appropriate for wind leasing,” said a Bureau of Ocean Energy Management (BOEM) spokesperson.
After their identification, “a lease sale could occur within a year”, potentially pushing into 2022 a process that was originally due to happen last year.
The White House has identified additional lease area sales along the Atlantic coast and initial ones off California as critical to its effort to jump-start the US commercial offshore wind sector and open a potential $50bn or more development opportunity this decade.
In a statement to Recharge, the New York State Energy Research and Development Authority (Nyserda) which oversees offshore wind development there, said the state is “eager to proceed to leasing as quickly as possible and stands ready to support that process in any way.”
That includes re-engagement through the BOEM convened Intergovernmental Renewable Energy Task Force for the New York Bight to “immediately identify additional Wind Energy Areas (WEAs) that can be finalised and leased expeditiously.”
Strong developer appetite
The New York Bight is a triangular geographical area between Long Island’s south shore and New Jersey’s coast. The generally shallow waters and gently sloping outer continental shelf facilitate use of fixed-bottom foundations.
The first and only lease sale there was in late 2016 when Equinor, then Statoil, paid $42.4m for development rights to an estimated 2.1GW capacity zone located an average 32km (20 miles) south of the Rockaways on Long Island. All but 24MW of capacity has been contracted by Nyserda on behalf of state electricity ratepayers.
BOEM in late 2017 identified four draft WEAs totaling about 7,021 sq km (2,711 sq miles) in the New York Bight that it named Fairways North and South and Hudson North – all located south of Long Island – and Hudson South east of New Jersey.
In April 2018, BOEM’s issued a request for expressions of commercial development interest for those areas that drew a strong response from global offshore wind companies with eight qualified by the agency.
In response to comments from stakeholders, the agency “winnowed” swaths of subsea federal lands from all four WEAs and labeled the balance as its primary and secondary recommendations for development totaling 3,212 sq km with capacity for about 9.6GW of wind power (primary ones have 3.8GW capacity).
This new arrangement remained unsatisfactory for the Department of Defense and fishing groups among others. Given the level of stakeholder concerns voiced at the last New York Bight task force held in November 2018, BOEM’s Road Ahead timetable leading to an early 2020 lease sale had no chance of being met.
Trump disinterest
Biden’s predecessor Donald Trump and his senior advisors, meanwhile, showed little apparent interest in reconciling stakeholder differences to enable lease sales, despite the likelihood of hundreds of millions of dollars in revenue for the deficit-ridden federal treasury.
Nyserda made various recommendations to the task force that included removing the Fairways North and South draft areas from consideration, a move endorsed by many in the industry since their shrunken sizes limited future potential development and economies of scale. Fairways North, for example, was reduced to having 160W in its primary zone, and Fairways South even less at 112MW.
When the task force met, New York had a 2.4GW offshore wind target by 2030 but now it is a nation-leading 9GW by 2035. The truncated areas BOEM is proposing probably can’t accommodate that capacity much less greater ambitions the state is eyeing later this decade.
Nyserda made other recommendations then that included conversion of both primary and secondary tracts identified by BOEM as the Hudson North and South WEAs for lease, and to begin stakeholder discussion of other areas in the New York Bight for potential development.
The agency urged BOEM to ensure that all areas for lease should make the best use of space, maximise competition, minimise development costs and consider transit for fishing and other maritime users prior to leasing.
Nyserda tells Recharge that it continues to support its 2018 recommendations, noting the state has invested more than $15m in scientific research, environmental surveys, and extensive public outreach to better understand the physical and biological conditions in the New York Bight, and prepare potential lease bidders about the region.
Whatever lease areas are put out for auction, Nyserda wants to unlock their maximum potential and “expeditiously advance” the state’s growing offshore wind pipeline that will support its goal for a carbon-free electric grid by 2040, the agency said.
