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New York picks two projects for 1.7 GW of offshore wind; climate bill signed

Highlights

880-MW Sunrise Wind and 816-MW Empire Wind selected

New York targets 9 GW of offshore wind by 2035

New York — New York Governor Andrew Cuomo Thursday signed the state's landmark Green New Deal that calls for a carbon-free power system by 2040, which includes 9,000 MW of offshore wind by 2035, with projects for 1,700 MW being awarded to developers Orsted, Eversource, and Equinor.

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"With this agreement, New York will lead the way in developing the largest source of offshore wind power in the nation, and today I will sign the most aggressive climate law in the United States of America," Cuomo said at an event in New York City.

The legislation, officially called the Climate Leadership and Community Protection Act, codifies the goal of achieving net-zero greenhouse gas emissions by 2050 through steep power emissions cuts and 100% emissions-free power by 2040.

Offshore wind will play a considerable role in reaching the aggressive targets, described by Cuomo and former US Vice President Al Gore, who joined him at the signing event, as the most ambitious in the country.

The 880-MW Sunrise Wind project, a joint venture of Denmark's Orsted and US-based Eversource Energy, will be 30 miles east of Long Island's Montauk Point. The transmission component will be built by Con Edison Transmission, a subsidiary of the investor-owned utility, and state-owned New York Power Authority.

Norway's Equinor was selected to construct the 816-MW Empire Wind project, which will be 15 to 30 miles southeast of Long Island, with the power supplying New York City, according to Cuomo.

The "base case" for the transmission component is to connect into Con Edison's Gowanus substation in Brooklyn, Christer Geijerstam, president of Equinor US, said in a phone call.

Equinor will "enter negotiations with New York State contractors and trade labor organizations on a Project Labor Agreement to cover construction activities," which are expected to cost around $3 billion, according to an emailed statement.

Both projects, which were selected as part of a competitive solicitation, will need to have negotiated long-term contracts with the New York State Energy Research and Development Authority for offshore wind renewable energy certificates, or ORECs.

The project awards remain subject to execution of the OREC purchase and sale agreements with NYSERDA.

Although the legislation signed Thursday would effectively push natural gas out of New York's power sector by 2040, environmental advocates are concerned the Green New Deal does not go far enough and want legislation that would prohibit construction of any new fossil fuel infrastructure.

"Building fossil fuel projects in the midst of this climate crisis is investing in projects that are doomed to go offline as we transition to renewable energy as the CLPA mandates," Laura Shindell, an organizer with Food and Water Watch, said outside the event where protesters were gathered.

"Governor Cuomo cannot call himself an environmental champion until he rejects all the fossil fuel project proposals in New York," Shindell said.

However, natural gas producers and merchant power generators are concerned about reliability and potential negative economic impacts associated with rapidly turning away from gas.

"This law could have ramifications far beyond what its authors intended, and elected officials need to be realistic about the results of this law long term -- which could put upward pressure on utility bills and home heating costs, and lead to natural gas moratoriums that could devastate local economies, as we're seeing play out right now in Westchester County," said Karen Moreau, executive director of American Petroleum Institute New York, a trade and lobbying group.

The law has wide-ranging implications that extend to the transport and building sectors where considerable investment will be required if the emissions reduction goals are to be reached on time.

"Reaching the State's ambitious goals will require unprecedented levels of investment in the electric system and near-complete electrification of the transportation, residential and commercial sectors," said Gavin Donohue, president and CEO of trade group Independent Power Producers of New York.

"Given that it will be illegal for any fossil-emitting generator to operate beyond 2040, but that flexible gas generation will be needed to balance the variability of renewables, investors must be able to recover their long-term costs by 2040," Donohue told Platts in June when the legislation was passed.

-- Jared Anderson, jared.anderson@spglobal.com

-- Edited by Gail Roberts, newsdesk@spglobal.com