In what feels like a New York minute, the Empire State has emerged not only as a rival to California and Texas as the country’s most exciting renewables hotspot, but among the world’s most fascinating laboratories for energy policy.

Established last year, New York state’s 50% renewables mandate for 2030 is set to unleash a wave of onshore wind investment in the state’s economically ailing gusty northern and western regions, while its nation-leading offshore wind target of 2.4GW by 2030 will help kick-start the industrialisation of the US sector.

At the same time, Tesla is busy building the Western hemisphere’s largest PV module factory in Buffalo, where it can tap low-cost hydropower from the Niagara River. And grinding away in the background is New York’s Reforming the Energy Vision (REV) initiative, which includes a massively complex attempt to modernise the traditional power-utility business model.

“New York is doing the hard work, and other states are going to follow,” Mark Goodwin, chief executive of leading US wind developer Apex Clean Energy, tells Recharge.

Onshore wind/solar

New York — which has an economy the size of Russia’s — already generates 25% of its electricity from renewables, mostly hydropower, with only 3% of in-state generation coming from onshore wind. But in the short term, at least, much of the new capacity will come from onshore wind, which is expected to win the lion’s share of the forthcoming technology-agnostic renewables tenders.

“The 50% target is ambitious, that’s for sure,” says Anne Reynolds, executive director of the Alliance for Clean Energy New York, an industry advocacy group. “It’s definitely going to unlock land-based wind development in New York.”

Over the past decade the New York State Energy Research and Development Authority (Nyserda) has held several solicitations to keep pace with the state’s renewables portfolio standard, resulting in about 1.8GW of onshore wind today, putting New York in 13th place nationally.

But since New York officially adopted the 50% target in late 2016, Nyserda has made several important changes to its renewables solicitations, the first being scale.

As an opening salvo, this summer, Nyserda and the New York Power Authority, a separate entity that supplies electricity to state buildings, announced they will sign contracts for 2,500GWh of annual renewable power, with the winning projects to be announced in November.

It’s the largest-ever single renewables solicitation in a country where central power procurements are rare, and will drive 600MW-1.6GW of capacity depending on which technologies prevail, Reynolds says. And it’s only a small fraction of what’s needed, with the state estimating it will require 33,700GWh of renewables to meet the 50% target.

Critically, Nyserda has also committed to holding regular tender rounds. Developers can plant roots in the state “with the knowledge that we’ll be there every year with a procurement — at least once a year”, Doreen Harris, Nyserda’s director for large-scale renewables, tells Recharge.

Many of North America’s leading wind developers are already established in New York, including EDP Renewables, Avangrid and NextEra Energy. Others are moving in, with EDF and RES recently announcing their first projects in the state.

Apex has never built a wind farm in New York, but it has three advanced projects and hopes to have more than 500MW installed by 2020, Goodwin says. That includes a 110MW project on Galloo Island, set six miles (9.7km) off the coast of Lake Ontario, which he describes as “one of the windiest [project sites] in the northeast”.

New York also appears on the cusp of its first utility-scale solar boom, with roughly 50 projects now in the grid-connection queue. In Nyserda’s most recent technology-agnostic solicitation, concluded earlier this year, a 50MW project developed by Hecate Energy came away a winner — the first time a solar project had prevailed.

“I think that woke the industry up a bit,” Gabriel Wapner, Hecate’s director of development, tells Recharge. “We’re quite bullish on the state given the 50% mandate.”

Yet for all of New York’s clean-energy ambitions, building big onshore projects here will never be easy. Permits are more expensive and time-consuming to come by than in many other states, and even in relatively rural areas siting can be a challenge, developers say.

Another obstacle to the 50% target is the lack of power lines connecting upstate — with its wealth of onshore wind and hydro resources — to the densely populated downstate region.

New York is far from alone in facing challenges bringing remotely generated renewables to its crowded coastal cities, of course, but its challenges are especially severe.

New York City still has nearly 10GW of in-city fossil-fuelled generation capacity to help meet demand on hot summer afternoons, mostly gas peakers sited along the waterfront in less-desirable neighbourhoods. Households in the city pay around $0.20/kWh for their electricity, or 50% more than the national average.

A number of major transmission projects are in the works in the state, including Blackstone’s 1GW Champlain Hudson Express, which would bring Canadian hydropower from the border to New York City via an underwater high-voltage line running down the Hudson River.

Still, New York’s transmission bottlenecks seem likely to worsen before they get better. Perhaps it’s unsurprising, then, that state officials have recently become fixated on the immense energy resource blowing off the coastline.

Offshore wind

Across Long Island this summer, state officials went on a roadshow to explain New York’s new 2.4GW offshore target to a curious public. They faced a few prickly questions about the potential impact on the fishing industry and Europe’s dominance of the offshore wind supply chain.

On the whole, however, most attendees were open to the idea. The biggest applause one evening came when a middle-aged woman with butterfly glasses and a heavy Long Island accent took the mic and boomed: “I think this is long overdue and we need to catch up with Europe.”

Even by the standards of the fast-moving renewables market, New York’s embrace of offshore wind has been sensationally quick.

Just a few years ago, almost no-one in the state seemed to take it seriously. Things began changing rapidly in 2015-16, as Governor Andrew Cuomo — a centrist Democrat seen as a possible presidential candidate in 2020 — threw his weight behind the 50% target; Deepwater Wind started putting steel in the water at Block Island; and the cost reductions being delivered in Europe began to sink in on this side of the Atlantic.

A trickle of announcements quickly became a flood. In late 2016, Norway’s Statoil paid a record $42.5m for a 1GW development zone south of Long Island. In January this year, Cuomo unveiled the state’s 2.4GW offshore goal and publicly called on the Long Island Power Authority to award Deepwater a contract for its 90MW South Fork project 30 miles (48km) off the coast of Montauk — which it did two weeks later.

These days offshore wind is increasingly seen as a central plank of New York’s renewables strategy, and some believe it could ultimately contribute more towards the 50% target than onshore wind.

“Northeastern states like New York would be wise to double down on offshore wind,” says Mike O’Boyle, who analyses the US power-sector transformation at think-tank Energy Innovation. “It’s a really promising technology for a region where land constraints are dramatic.”

At Nyserda’s public meetings this summer, Harris described offshore wind as a “perfect resource” for the downstate region. Asked later to explained the shift in mindset, she said: “There’s been a sea change, really, with regard to the cost reductions we’ve seen for offshore wind. I think everyone in the US is paying attention.”

Two or three years ago, offshore wind was something of a “curiosity” in the US, says Christer af Geijerstam, project manager at Statoil. But no longer. “People are now seeing that it’s very competitive,” he says. “When that happens, they start seeing opportunities — and then it gets interesting.”

For all the excitement about the state’s offshore plans, gaping questions remain — about the future supply chain, the cost of the electricity, where additional development zones will be sited and when the US Department of the Interior will put them to tender.

More clarity on all these issues will come when Nyserda publishes the state’s offshore wind “master plan” later this year. The most keenly watched detail, developers say, will be Nyserda’s recommendation on the contracting mechanism New York should employ for procuring offshore wind power.

Electricity market redesign

Renewables developers may be focused on New York’s 50% target, but of more interest to the broader electricity industry are the complex regulatory reforms at the heart of the landmark REV initiative.

In a nutshell, New York wants to transform today’s centralised electricity market into a platform where distributed resources like rooftop PV, energy storage and demand-response are able to compete on level ground with large power plants.

States like California are working on many of the same ideas, but New York is unique in the US in attempting to tackle it all in one package, says Lisa Frantzis, senior vice-president for the 21st century electricity system at Advanced Energy Economy.

Announced in 2014 to great fanfare, REV is moving slower than many had expected, and Frantzis says it may still be several years before its impact is widely felt. However, the basic plot has already taken shape, and it’s now down to fighting over the details.

REV contains tough medicine for everyone. Rooftop solar owners, for example, will be shifted off the net-metering model, and instead paid only what their power is worth, according to complex calculations based on the specific time and place on the grid.

Meanwhile, New York’s big utilities — among them Consolidated Edison and National Grid — will operate this new multi-directional energy platform, but they will lose control over some aspects of the market and see their century-old business model totally disrupted.

“Change is a hard thing for some folks when they’re not clear on what the ultimate outcome is going to be,” Frantzis tells Recharge.

“Will the utilities be making as much in revenue as they did before? They might not. But maybe their profitability will be better. We don’t know yet.”

The utilities were sceptical of REV at first, but seem to have come around. Among the potential upsides for them is access to (and perhaps ownership of) a vast new trove of data about the ways consumers produce and use power.

ConEd, an investor-owned utility serving power to New York City, was hit with an analyst downgrade shortly after REV was announced, but three years later its stock has bounced back to an all-time high.

“In our first interactions with REV, I think most utility folks thought, ‘hang on a second’,” says Robert Schimmenti, ConEd’s senior vice-president for electric operations. “There were lots of concerns.

“But we’re way past that. We see a lot of potential in this transformation.”

Wapner believes New York’s utilities should be thankful for REV. “New York has provided the utilities with a great opportunity to evolve within a framework.

“REV is a gift to utilities, whether they realise it yet or not.”